Accidents caused to an aircraft while it is on ground (ground/ramp accidents) are very common in the aviation industry. Ground accidents occur during ground operations i.e. as personnel of ground handling companies, maintenance organisations and other airport service providers are servicing the aircraft. The outcome of ground accidents is rarely fatal, but very expensive for the industry. IATA records a total of US$5.7 billion in 2021.
Each ground accident results in direct repair costs and consequential losses for the airline such as loss of revenue, cost of flight diversions and passenger compensation claims due to cancellations and delay. The bill to the airline is US$250K on average for each accident and recovery attempts often result in complex legal disputes between carriers, airport service providers and their insurers.
A myriad of factors contribute to the high frequency of ground accidents. Weather conditions, human errors and the operational pressure of turnaround demand on ramps of busy airports. Ground accidents and their ensuing legal battles are inevitable in a country such as Turkey, since two of its airports are in the world’s top ten for passenger traffic.
Legal framework of the contractual relationship between an airline and ground handling company is predominantly the IATA Standard Ground Handling Agreement (SGHA) which is also the legal standard in Turkey. Its renowned Article 8 governs the contractual liability of the parties for the damages caused on ground and grants a liability protection to the handling company which is often criticised of being “anti-airline”. The controversial article sets out two types of limitation: First, it limits the ground handlers liability for consequential losses only to damages which are caused through intentional or reckless acts and excludes negligence. Secondly it activates a financial cap to the amount payable for physical loss or aircraft damage through negligence.
The effectiveness of this “handling company friendly” limitation of liability is open to legal debates. Some courts in China and Italy have taken broad interpretation of the elements of contractual liability under Article 8.1 (“intent to cause damage/loss or recklessness with knowing that damage/loss would probably result”) thus stretching the ground handlers liability to cover its high degree negligence. This allows some airlines to recover their consequential losses from ground handling companies. For some other jurisdictions the key question is whether such limitation of liability is indeed valid under that legal system.
Under Turkish law, an agreement made in advance to limit the liability for damages arising from unlawful intent or gross negligence is universally void. The same rule applies to agreements aimed to relieve an expert service provider which is acting under a professional or official licence from their liability even for minor negligence.
In Turkey ground handlers are expert aviation companies carrying out their ground operations under an official licence granted to them by the Turkish CAA. Hence, in our opinion the limitation of liability in Article 8 of IATA’s SGHA is void under Turkish law. Turkish ground handling companies are without any contractual immunity liable from the direct and consequential damages of losses of a ground accident if the choice of law in the SGHA is the Turkish law.
References
IATA Ground Operations & Audits/Joseph Suidan Massimo Cicetti Paul Fleming, https://www.icao.int/SAM/Documents/2021-RLA06901-GHANDLING/S8-SAMGH2021Presentation%20for%20ICAO_V2.pdf
Analyzing human error in aircraft ground damage incidents, Caren A. Wenner, Colin G. Drury, https://www.faa.gov/about/initiatives/maintenance_hf/library/documents/media/human_factors_maintenance/analyzing_human_error_in_aircraft_ground_damage_incidents.pdf
Why do ground handling incidents/accidents cost our industry over $5b per year? Could we/you be doing more to reduce the numbers and costs? Andy Turner,https://www.linkedin.com/pulse/why-do-ground-handling-incidentsaccidents-cost-our-industry-turner/
Understanding airport ground handling risks, Salla Lind-Kohvakka,https://www.if-insurance.com/large-enterprises/insight/risk-consulting-magazine/risk-consulting-2021-3/understanding-airport-ground-handling-risks
Ground Accident Prevention (GAP) /Flight Safety Foundation, https://flightsafety.org/toolkits-resources/past-safety-initiatives/ground-accident-prevention-gap/
Corporate aviation operators and ground handling losses, John Burgoyne,, https://www.wtwco.com/en-US/Insights/2021/07/corporate-aviation-operators-and-ground-handling-losses
2021 Safety Report/ Flight Safety Foundation, https://flightsafety.org/wp-content/uploads/2022/02/FSF-2021-Safety-Report_rev5.pdf
The Tug of War Between International Ground Service Liability Concerns, Mario Pierobon, https://www.aviationpros.com/tools-equipment/insurance-finance/article/12247301/the-tug-of-war-between-international-ground-service-liability-concerns
SGHA cannot protect ground handling companies as before, Yu-Lai Jin, https://www.lexology.com/commentary/aviation/china/shanghai-kai-rong-law-firm/sgha-cannot-protect-ground-handling-companies-as-before
UK: Airport Service Providers Beware – The Changing Ground Handling Regime, Peter Coles, https://www.mondaq.com/uk/corporatecommercial-law/28751/airport-service-providers-beware-the-changing-ground-handling-regime
Supreme Court ruling on airport handling liability, Laura Pierallini, https://www.lexology.com/commentary/aviation/italy/studio-pierallini/supreme-court-ruling-on-airport-handling-liability
The Professional Negligence Law Review: Switzerland, Philipp Kanzig and Jonas Stussi, https://thelawreviews.co.uk/title/the-professional-negligence-law-review/switzerland
This article expresses the opinion of the writer and should not be construed as legal advice.