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Claiming compensation for nervous shock as a non-passenger following an aircraft crash

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The question of whether a person, whether that be a passenger or a family member of a passenger, can recover damages for nervous shock from an air crash has been an area of considerable legal debate in Australia and overseas since the creation of the Warsaw Convention in 1929 and the Montreal Convention in 1999.

In Australia, ‘nervous shock’ is a legal term for a recognised psychiatric disorder, injury or illness that a person acquires as a result of actions or omissions (either negligent or intentional) by another person or party. An example of this definition is where a person observes or witnesses an accident or air crash and suffers a recognised psychiatric illness such as Post-Traumatic Stress Disorder.

The Civil Aviation (Carrier’s Liability) Act 1959 (Cth) (‘the Act’), whether through the Act itself or through various State acts, is the legislation through which claims are brought for compensation for loss or damage. Section 38 of the Act states that the Act is the exclusive means of accessing compensation for loss or damage through a dependency claim and not through the common law or by other means.

In respect of a passenger, the Montreal Convention through the Act limits a passenger’s ability to claim for nervous shock unless it arises out of a physical injury suffered during or as a result of the air crash under section 9E of the Act.

For example, Post-Traumatic Stress Disorder arising from a head injury would be compensable but Post Traumatic Stress Disorder on its own would not be compensable.

This is reflected in the case law on this subject in international jurisdictions such as the House of Lords’ decisions of Sidhu v British Airways [1996] UKHL 5 and Morris v KLM Royal Dutch Airlines, King v Bristow Helicopters Ltd [2002] UKPC 43.

However, in respect of a non-passenger whose family member is a passenger, recent developments in case law in Australia have provided a legal basis for a non-passenger whose family member was killed in an air crash to bring a claim under common law for damages for nervous shock.

The Federal Court case of South Pacific Air Motive Pty Ltd v Magnus [1998] FCA 1107 concluded that the Act was not intended to prevent claims for damages by non-passengers for nervous shock, and instead, the Act related to claims for dependency rather than nervous shock.

This line of argument was confirmed in the Western Australian District Court case of Cousins v Nimvale Pty Ltd [2013] WADC 175 where the Court confirmed that a common law claim for damages arising from nervous shock was permissible provided that it was brought independently of a claim under the Act or through a State Act for damages relating to a dependency claim.

This creates a curious two-system approach for compensation for nervous shock whereby passengers cannot claim unless the nervous shock arises from a physical injury however a non-passenger whose family member is a passenger, is able to claim for nervous shock.

This article should not be read as legal advice, and the application of the legal principles and case law as noted above in this article will differ according to each situation. For further legal advice that is applicable to your individual situation, please contact the Shine Lawyers Aviation Law team.

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