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If your luggage is worth more to you than 1,134.71 euros, you might want to think twice or make special arrangements before checking it in on an European airline. The EU Court of Justice recently confirmed that the liability of European Union air carriers for loss of baggage is limited to EUR 1,134.71, for both material and non-material damage, in Case C-63/09, Axel Walz v Clickair SA.

This case arose from an action filed by Axel Walz against the airline Clickair, in Commercial Court No 4 of Barcelona, in which he claimed damages for luggage lost on a flight from Barcelona, Spain, to Oporto, Portugal. He sought the amount of EUR 3200: EUR 2700 for the value of the lost baggage and EUR 500 for non-material damage suffered as a result of losing something that was irreplaceable. The Spanish court referred the case to the ECJ for clarification of the pertinent portion of the Montreal Convention which governs the liability of EU air carriers regarding passengers and their baggage. The issued posed to the ECJ was whether the term “damage”, which underpins the ceiling on liability for lost baggage, must be interpreted as including both material and non-material damage.

The ECJ first found that the Montreal Convention does not contain any definition of the term “damage”. However, the court opined that a uniform and autonomous definition is needed because the signatory states give different meanings to the term, and the convention is aimed at unifying the rules for international air carriage. The Court found further that because the Convention establishes strict liability (i.e. liability without proof of negligence) for airlines, an equitable balance of interests requires that there be a clear cap on compensation per passenger, regardless of the actual nature of the damage caused to each passenger. The court underscored that this limitation has the two-fold advantage of enabling easy and swift compensation to the passengers and preventing an unduly heavy burden on the carriers, which could undermine and even paralyze their economic activities.

This may seem like a departure for the ECJ from its usual passenger-friendly jurisprudence. However, the Court pointed out that the Convention allows a passenger to make a special declaration of interest at the time of check-in and pay a supplementary sum in order to raise the compensation ceiling. And, maybe, this time, the Court is showing some sympathy to the airlines who are already tottering on thin economic ice as a result of the double whammy of the global financial crisis and the volcanic ash airspace shutdown.