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Malaysian Air Geopolitic Victims on Hard Road to Recovery

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A man walks by flowers left by parents of an Australian victim of the crash on a piece of the Malaysia Airlines plane MH17 near the village of Hrabove in the Donetsk region. Photographer: Bulent Kilik/AFP via Getty Images

Aug. 1 (Bloomberg) -- The families of victims aboard a Malaysian Airlines jet downed over eastern Ukraine can be fairly certain of a couple of things: They should get as much as $173,000 in compensation and will have to fight for anything more with scant chance of success.

Malaysian Airline System Bhd, in financial difficulty after the March 8 disappearance of Flight MH370 over the Indian Ocean, is governed by the 1999 Montreal Convention which limits claims against an airline, unless negligence can be proven.

Families seeking higher payouts have few options with fewer prospects of success. Investigators seeking evidence in the disaster have been hampered by fighting in the area. Russia, blamed by the U.S. and Ukraine for supplying rebels with missiles that destroyed the plane, has deflected responsibility. And most surviving relatives are limited to suing the airline, potentially for negligence, in the Netherlands, where the flight originated, or Malaysia, the final destination.

Those are “two crummy choices” for jurisdictions, said Gerald Sterns, an air crash liability lawyer in Oakland, California. Dutch courts limit liability with offsets including life insurance or inheritances triggered by a death while Malaysia has “essentially a dysfunctional government,” he said.

The Malaysian flight MH17 with 298 people on board was shot down July 17 while cruising at 33,000 feet (10,000 meters), probably by Russian-backed Ukrainian separatists using a BUK surface-to-air missile, according to U.S. and Ukrainian officials. The high-powered missile, with a range of up to 15 miles, was supplied to the separatists from Russia, U.S. and Ukrainian officials said.

Dutch Nationals

Dutch nationals accounted for the majority of the victims, while about 44, including 15 crew, were from Malaysia, according to the airline.

Malaysian Airlines may be susceptible to a claim that its pilots shouldn’t have flown over a combat zone, said Robert Clifford, a Chicago-based air crash liability lawyer. Under the Montreal Convention, carriers are required to handle their passengers with the best possible care, he said.

“You and I can’t run red lights. They can’t run yellow lights.” Clifford said. “I believe that it’s not going to be a really high bar to reach to establish that Malaysia Airlines did not take all necessary measures.”

“It’s totally premature to suggest pointing the finger at somebody like Malaysian Air,” said Dennis O’Hara, a plane crash liability defense lawyer in the south Florida law firm Wicker Smith O’Hara McCoy & Ford PA. He was counsel for ValuJet after one of its planes crashed in 1996 and represented ComAir Inc. and Delta Air Lines after a Lexington, Kentucky, crash 10 years later.’’

‘Recognized Route’

“My understanding is that they were flying a recognized route” used by other aircraft that same day, O’Hara said. “To suggest they should anticipate a thing like this, that’s just not reasonable.”

The flight route was declared safe by the International Civil Aviation Organization and wasn’t subject to restrictions, Malaysian Air said in a July 18 statement.

Families of each passenger are eligible for $5,000 in assistance and that money won’t be used to offset any legal rights or final compensation, the airline said.

Russian President Vladimir Putin blamed Ukraine for starting an offensive against the separatists and causing the plane crash.

Putin’s Claims

“One can say with certainty that if the fighting hadn’t been resumed on June 28 in eastern Ukraine, this tragedy for sure wouldn’t have happened,” Putin said.

Still, some see Russia as the victims’ families best chance for additional compensation.

“I wouldn’t discount the idea of Russia being led to pay,” said Justin T. Green of Kreindler & Kreindler LLP in New York, who specializes in air-crash cases. “I think it’s the right thing to do.”

There is precedent for the imposition of national responsibility in the downing of civilian aircraft.

Green compared the destruction of Flight MH17 to the U.S. Navy shooting down an Iranian passenger jet in 1988 over the Persian Gulf and the Libyan-sponsored bombing of a Pan American World Airways flight over Lockerbie, Scotland, later the same year.

Eight years after the Iranian plane was downed, the U.S. agreed to pay $131.8 million, $61.8 million of which was allocated to families of the 248 victims, to settle a lawsuit filed in the International Court of Justice in The Hague, according to court records.

It’s a route Malaysian Air victims’ families could follow, according to Patrick Hofstroessler, a lawyer at Eubelius BV, Belgium’s biggest independent law firm.

Blame Russia

“The claim could be directed to Russia,” he said, if it could be proven the outcome was predictable when the weapons were provided to the Ukrainian separatists.

The Dutch government has said the process of using international courts is too complicated and it expects prosecutions at national levels.

That won’t be easy either, said Alan Tan, a law professor who teaches aviation and criminal law at the National University of Singapore.

Identify Wrongdoers

“There is the problem of hauling the responsible party before the courts,” Tan said. “This is if the responsible party, whether pro-Russian separatists, state organs or some other state-sponsored wrongdoer, can be identified.”

Geert-Jan Knoops, a lawyer at Knoops Advocaten in Amsterdam who specializes in international criminal law, agreed saying: “It becomes tricky to get those possible suspects to The Hague or anywhere else, as you just can’t simply pick them up.”

The regime of the now-dead Libyan leader Colonel Muammar Qaddafi agreed in 2004, 16 years after the PanAm bombing, to pay $10 million for each of the 270 people who died.

The former Soviet Union hadn’t shown the same inclination to compensate victims.

After the 1983 downing of Korean Air Lines Flight 007, which strayed into Soviet airspace near the Kamchatka Peninsula, the country first denied any role in the crash.

The U.S. released classified intelligence showing the Boeing 747 was brought down by a missile fired from a Soviet Sukhoi SU-15 interceptor. Soviet officials responded with claims the Korean plane purposefully strayed from its flight path to spy on its air defenses.

No Responsibility

“The Soviet Union never accepted responsibility for that tragedy,” Tan said. Families of the 246 passengers and 23 crew on board weren’t compensated.

McCue & Partners, a London law firm, said in a statement it’s working with partners in the U.S. and Ukraine on “potential legal actions that can be brought against those responsible directly and/or indirectly” for the destruction of flight MH17. The firm declined requests for interviews.

Kreindler & Kreindler is also investigating potential theories of liability, Green said in an e-mail, adding it will take “an international legal and political effort” to bring about recompense for victims’ families.

As the case involving Libya and the downing of the PanAm flight has shown, attitudes can change over time.

“We don’t know where Russia’s going to be in 20 years. We don’t even know where they’re going to be in five years,” said Jeffrey Mankoff, a professor at Georgetown University’s School of Foreign Service and deputy director of the Russia and Eurasia Program at the Center for Strategic & International Studies.

“Could something change down the road? Sure,” he said. “I just don’t see that happening in the short term.”

To contact the reporter on this story: Andrew Harris in federal court in Chicago at aharris16@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Joe Schneider, David E. Rovella

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