Liability of air carriers for loss of baggage is limited to €1134.71 which amount includes both: material and non-material damage.
Mr Walz lost his baggage on his way from Barcelona (Spain) to Oporto (Portugal) while using Clickair airlines. He claimed that his damage was worth in total €3200 of which: €2700 for the value of the lost baggage and €500 for non-material damage resulting from this loss.
Clickair airlines wanted to use the limit for compensation as established in the Montreal Convention - Article 22(2):
‘In the carriage of baggage, the liability of the carrier in the case of destruction, loss, damage or delay is limited to 1 000 Special Drawing Rights [SDR] for each passenger unless the passenger has made, at the time when the checked baggage was handed over to the carrier, a special declaration of interest in delivery at destination and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless it proves that the sum is greater than the passenger’s actual interest in delivery at destination.'
The ECJ was confronted with a question whether the limit set in the Montreal Convention applies to both material and non-material damage. The Montreal Convention itself does not define the term 'damage'. (Par. 21) The ECJ decided that the Montreal Convention uses the term 'damage' in its ordinary meaning, which means it should encompass both the material and non-material damages. (Par. 27-29) The limitation of the liability of the air carrier is a result of application of the strict liability doctrine:
'a carrier is presumed liable for that damage, ‘upon condition only that the event which caused the destruction, loss or damage took place on board the aircraft or during any period within which the checked baggage was in the charge of the carrier’.
A system of strict liability of that kind implies, however, as is apparent, moreover, from the fifth recital in the preamble to the Montreal Convention, that an ‘equitable balance of interests’ be maintained, in particular as regards the interests of air carriers and of passengers.' (Par. 32-33)
The idea behind that provision was therefore that the passenger would be compensated swiftly and easily, without having to prove the fault of the air carrier in losing the baggage.
What to do if you know you are traveling with the baggage that is worth much more?
Fill in a special declaration about the value of your baggage, making sure that the air carrier takes liability for its full value. That air carrier may charge you with extra costs for transporting the baggage but it might be worth the money.
In addition, Article 22(2) of the Montreal Convention provides that a passenger may make a special declaration of interest at the time when the checked baggage is handed over to the carrier. That possibility confirms that the limit of an air carrier’s liability for the damage resulting from the loss of baggage, laid down in that article, is, in the absence of any declaration, an absolute limit which includes both non‑material and material damage. (Par. 38)