Tuesday, November 27, 2012
The Court of Justice for the European Union has ruled that the Montreal Convention requires airlines to compensate passengers for lost items even if those items were stored in baggage checked in another passenger's name. The primary effect of this ruling will be to increase the number of passengers that can claim damages for one lost bag. This is significant because the Montreal Convention caps damages at 1000 Special Drawing Rights (SDRs) per passenger. In the case in question Iberia lost two suitcases belonging to a Spanish family of four. The CJEU's decision allows the family to recover for lost property belonging to the two children, increasing the family's total potential recovery to 4000 SDRs rather than the 2000 SDRs they would have been limited to had the CJEU only required Iberia to compensate the two parents in whose names the suitcases were checked.