Relación de temperatura y efecto de frenado

As we have outlined the basic features of the Warsaw Convention system, we will now build simple models applicable to evaluating the efficiency of liability rules governing passenger damage. It is important to recall that the carrier is in market relationship with his passengers which means that he offers on the market various carriage by air products for which passengers are paying on their own choice (producer-consumer).^'^ We will first identify the factors that may affect expected accident losses and then examine their effect on the parties' behaviour and on the choice o f an optimal legal rule.

2.1 Factors Bearing on Expected Accident Losses

2.1.1 The carrier's and passenger's care; Assuming first that passengers cannot affect expected accident losses, only the carrier's care will determine expected lo s s e s .N o w , assuming that passengers can also affect expected losses by taking care or purchasing a proper amount o f travel insurance, their level of care will depend on their information

about expected losses. This is because passengers' information will affect their

willingness to pay for carriage by air products. In other words, passengers will purchase a carriage product only if they reckon that the utility of the product to them exceeds or at least equals its full price, i.e. air fares carriers actually charge on the market plus expected accident losses passengers perceive.

2.1.2 The carrier's and passenger's activity level: In the carriage by air market as in those of other products, there will be no carriage unless the carrier and the passenger both agree. This means that a carrier's output (as measured by e.g. total miles flown by his fleet) depends on the passenger's willingness to pay for his products. From the long-term perspective, either the carrier's output or the passenger's consumption level alone will have little effect on expected losses, whether passengers are perfectly or imperfectly informed about risks. For the carrier's activity level itself does not, from the long-term perspective, very much affect his accident probability or the average magnitude of losses, provided that his care level is kept constant. Whether he operates 100 or 100,000 flights, his accident frequency or average magnitude o f losses will not change very much from the stochastic standpoint. We will thus not include the carrier's activity level as an independent factor affecting expected losses.

A gratuitous carriage can be seen as a product offered free o f charge. Sec 1.2 above. 55. See Shavell, 5 \ & ! ! / / .

5^. Sec 2.3.3 below. 57 Shavell, 52.

2.2 Passengers' Perfect Information

If the passenger has perfect information about expected losses, every rule will lead to the efficient outcome with respect to both the carrier's care and his activity level for the following reasons. Under strict liability, since the carrier will be liable to the passenger for his losses whenever losses occur, air fares will exactly reflect full accident costs. Consequently, the passenger will be forced to buy the efficient number o f flights. Under negligence, since the carrier will not be liable as long as he takes due care, air fares generally will not exactly reflect true costs o f carriage by air. Nevertheless, since the passenger has perfect information about expected accident losses, he will correctly take into account the true costs of air travel and will purchase the efficient amount o f carriage by air products. Again, if the passenger can also affect expected losses by taking care, he will be motivated to take optimal care because he knows that otherwise he would be made to bear his own losses. Thus, the negligence rule is also efficient with regard to the care exercised by the parties. Therefore, where the carrier and the passenger are risk neutral and the passenger has perfect information about risk, the choice o f a liability rule is irrelevant to efficiency. In fact, the assumption of passengers' perfect information is equivalent to that o f zero transaction costs in the Coase Theorem.

2.3 Passengers* Imperfect Information

The assumption o f the passenger's perfect information may be unrealistic, since infrequent passengers may not keep up with updated information on the safety record o f individual airlines (consider e.g. terrorists' threat to passenger safety which the airline was reluctant to make public in advance and which subsequently materialised).^^ Imperfect competition on some routes also affects passengers' access to information and their choice o f an airline when they buy carriage by air products. Now, if the types o f service (e.g. fares, connecting service and flight duration) are similar, the passenger's information about risk will depend on different classes of customers.^® Frequently-flying business travellers will act in a more calculated way and may well value in their scale o f preferences safety record as highly as the convenience o f flight schedules, aircraft type and seating comfort, load factors, in-flight service quality or efficient reservation system.^^ Leaving aside safety-conscious commercial customers, certain infrequent passengers such as tourists or casual trippers

In fact, this result is a tautology o f the main premise o f the economic analysis o f law because every rational individual with perfect information will act in no other way but in a wealth-maximising way. which w ill always lead to the efficient outcome. Ch 1; 3.1 above.

J E Assimotos, To Warn or Not to Warn _ the Airline's Duty to Disclose Terrorist Threats to Passengers, 56 JALC (1991) 1095.

60. Shavell. 54-55.

may for budget-saving purposes prefer charter flights with a lower safety record to scheduled services. Now, we will examine the effect of the passenger's imperfect information on the choice o f an optimal liability rule.

Example 2.1 Suppose an airline has registered a certain accident rate in the course of his activity over a period of time and that he faces three choices in relation to its safety record: to take high level of care (e.g. by installing all the safety devices available and by maintaining aircraft and training its flight crews more frequently than required by the law), take medium care, or to take low care and simply risk an accident. As Table 2.1 shows, both the negligence rule and strict liability create adequate incentives for the injurer-carrier to take medium care so that he can maximise total benefits net of total costs or minimise the sum o f accidents plus their avoidance costs. Here, the term 'strict' liability will be used interchangeably with that of 'absolute' liability, since under either regime, fault is not

required in order to hold the wrongdoer l i a b l e . ^ ^

Table 2.1

Aviation Accident Example: Carrier's Care Affects Expected Losses

Behaviour o f Cost of Accident Losses to Expected Full Cost of

the Carrier Production Probability Each Victim Accident Production

(Level of per 100,000 (Fatal if Accident Losses per 100,000

Care) kms Accidents kms (£) (including per cost o f care) 100,000 kms flown) low 500 0.0020 100,000 200 700 medium 600 0.0008 100,000 80 680 high 700 0.0005 100,000 50 750

Cheng. A Reply to Charges, at 9-11. The difference is that although strict liability requires causal link bet\\een the person strictly liable and the damage caused, there is no such requirement under absolute liabilit>'. In French law, while the term 'objective' liability {responsabilité objective) generally denotes no­ fault liabilit>', it is also used to mean not only strict but absolute liability. 'Objective' liability in French law does not necessarily exclude defences available under strict or absolute liabilit}'.

2.3.1 Risk neutrality; Assuming that under the negligence rule the carrier will be induced to take medium care and will not be liable for accident losses, the carrier in Table 2.1 will be willing to sell his 100,000-km carriage product for £600. However, since passengers have imperfect information, they will misperceive and generally underestimate risk and will not add £80 to the air fare to account for expected losses. Consequently, they

may be motivated to buy too much of the carriage products. In this situation, the

important question is whether the rational passenger, if fully informed of the possibility of uncompensated losses when optimal care is taken, would still be prepared to buy the same amount of travel. If he were not prepared to do so, as is believed, the negligence rule can produce the efficient result.

The efficiency of strict liability is not affected by passengers' information, however. Under strict liability the carrier will be liable for whatever passenger losses that may be caused in the course of his activity. Given the full costs o f production per 100,000 kms in Table 2.1, the carrier will obviously take medium care^"^ and be willing to sell his 100,000- km carriage product for £680 per passenger. Passengers will then be forced to buy the efficient quantity o f carriage products, because the price correctly reflects the full cost o f the product. Thus, assuming the passenger's imperfect information and underestimation o f risk under parties' risk neutrality, strict liability will have advantage over the negligence rule in achieving the efficient outcome with regard to both the carrier's care and passengers' purchase decisions.

2.3.2 Risk aversion: Although the choice of a liability rule under parties' risk aversion will also affect their incentive to take care, discussion here will focus on risk allocation issues. This is because it will generally increase aggregate utilities to shift risk from the more to the less risk-averse and from the risk-averse to risk-neutral party.^^ Assuming that both incomplete liability and first-party insurance are available because o f the moral hazard problem, the carrier will bear some risk under strict liability, whereas passengers will bear some risk under the negligence rule. Given both imperfect liability and first-party insurance, the optimal choice between strict liability and the negligence rule depends on the relative risk aversion of the parties. Thus, under passengers' imperfect information and parties' risk aversion, strict liability would be preferred to the negligence rule to the extent that passengers are more risk averse than carriers or that passengers are risk averse and carriers are risk neutral. The negligence rule would be desirable if the reverse is true.

Polinsk}-, 98: Shavell, 33-54. On the other hand, if the consumer overestimates the risk, he will buy too less o f carriage products, since he will add more than 50 pounds to the price of air fare.

The carrier will choose to take medium care, because compared to other levels o f care, it would make his fare competitive and give him comparative advantage over his competitors' fares.

A risk-averse party prefers a certain to uncertain wealth and is willing to pay more than the expected value o f losses. Ch 1: 6.1 above.

2.3.3 Passengers' care: In most of accident situations in carriage by air, passengers cannot affect expected losses. Nevertheless, in certain cases they can do reduce and minimise the risk of his own injury at minimal costs. This is the case with a situation where passengers have only to comply with the pilot's instructions during the flight, e.g. wearing seat belts in accordance with the "Fasten Seat Belt" sign. In this apparent case of what constitutes efficient behaviour, not much costs will be incurred for passengers to wear their seat belts. Nor will much information be needed or much costs be incurred for the court to assess the correct level of due care applicable to each p a sse n g e r.T h e carrier's

defence of contributory negligence^'^ can also be justified in view o f a tendency of

passengers to misperceive and underestimate risk and not to take adequate precautions.^* This is so under the negligence rule, but is especially the case under strict liability, since under the latter passengers are effectively insured and compensated under strict liability by the carrier and they may not have an adequate incentives to take care.^^

It may be arguable that if a man's basic instinct for self-preservation or self-interest does not deter him from indulging in a dangerous or risk-increasing conduct, it is unlikely that tort law incentives will and can do.^° Although this may generally be the case, the problem is that not all people always act rationally to minimise the probability and magnitude o f his own injury. Some may risk the future occurrence o f a low-probability accident in favour of the enjoyment of the present pleasure. This accords with a press report that business travellers are ignoring in-flight safety demonstrations and instructions which are vital to their safety in the event o f an accident."^* Here, some legal compulsion will be needed to correct an inefficient outcome. A strict liability without the defence o f contributory negligence is less efficient than the negligence rule with a contributory negligence

s t a n d a r d .’^2 such, some version of the defence of contributory negligence is always

66. See Shavell, 57-58.

6^. Contributory negligence is defined in s 463 o f the R estatem ent (Second) o f Torts as "...conduct on the part o f the plaintiff which falls below the standard to which he should conform for his own protection, and which is a legally contributing cause co-operating with the negligence o f the defendant in bringing about the plaintiffs harm". In fact, one o f the original rationales o f the rule was that the negligent victim is in effect a joint tortfeasor with the injurers. See W Shofield, D avis v. Mann: Theory o f Contributory Negligence, 3 Harv LR (1890) 263, 267 & 269.

6*. If the passenger overestimates expected losses, he will buy too little o f carriage products (when he is risk-neutral) or too much first-party insurance (when he is risk-averse).

6^. See Polinsky, 102; G Calabresi, Optimal Deterrence and Accidents: To Fleming James, Jr., 84 Yale LJ (1975) 656, 662-63; Posner. 123-24; id. Strict Liability: A Comment, 2 J Leg Stud (1973) 205, 207-09; id. A Theory of Negligence, 1 J Leg Stud (1972) 29. 40.

See James, Accident Liabilit)' Reconsidered, 549-50; Cane (1993) 368-69. 71. TT, 14 April 1994, p.21.

72. R A Posner, Strict Liabilit) : A Comment, n.69 above. 221. One author, however, questions the role of contributory negligence under strict liability'. See S Shavell, Strict Liability versus Negligence, 9 J Leg Stud (1980) 1, 19 & 21.

needed, whether under the negligence rule or strict liability, to deter the victim and produce the efficient result.

2.3.4 Passengers' care under the Warsa\i> Convention text and case; The unamended

Convention adopting a negligence rule provides for total or partial exoneration of the carrier's liability upon proof o f the passenger's contributory n eg lig en ce,w h ich is the

efficient result as already explained above. The Guatemala Protocol 1971 adopting a strict

liability regime with the unbreakable limits has amended this provision so that the victim's contributory negligence will exempt or reduce the carrier's liability to the extent that such negligence caused or contributed to the damage.^"* This is the efficient outcome, as already

explained above. In Goldman v. Thai Airways International Ltd.^'^^ the court held that it

was not contributorily negligent for a passenger not to wear his seat belt during the flight in the absence of the 'Fasten Seat Belt' sign. This is a correct decision, because the carrier, or the pilot to be exact in this context, has superior information about wake turbulence in a particular airspace and can minimise injury of passengers by lighting the sign. It is another, totally different matter to hold a passenger contributorily negligent when he failed to comply with the pilot's instructions.

2.4 Passengers' Imperfect Information and the Requirement of Adequate Notice

On the basis o f the above analysis, we can now assess the efficiency of liability rules under the Warsaw> Convention. The unamended (amended) Convention requires the carrier to deliver passenger tickets containing, among others, a 'statement' ('notice') to the effect that in the event of an accident, the carrier's liability for a passenger's wounding, death and other bodily injury will be subject to a certain specified maximum established by the C onvention.T his provision has turned out a prime source of controversy, together with the liability limitation p ro v isio n .W e will now examine the efficiency o f the requirement under the passenger's imperfect information and also proper sanction against any failure. It is assumed here that not only the carrier's but the passenger's care affect expected losses, that passengers have imperfect information about risk and that administrative costs of informing passenger o f the risk by printing it on the passenger ticket are negligible.

73. Art 21.

Art VII. To the similar effect, see the C arnage by A ir A c t 1961, s 6 & sch 1, art 21; Civil Liability (Contribution) A c t 1978 (c 47). ss 1, 2 & 6; Law Reform (Contributory Negligence) A ct 1945. s 1(1); Clerk & Lindsell, on Torts, paras \-7>9ff\ Miller, 70-71.

73. 125 Sol J (1981) 413 (High Ct); 6 Air L (1981) 187, revs'd on other grounds, [1983] 3 All ER 693, [1983] 1 WLR 1186 (CA); Secs 3.2.4 & 4.2.3 below. See to the contrary, Bradfield v. TWA, 152 Cal Rptr 172 (Cal CA 1979); Arraluce v. Air-France (Paris CA, 18 Dec. 1987), 41 RFDA (1987) 465, affd on other grounds (cass 29 Nov. 1989).

76. Arts 3 & 17.