Nationality Of Victims Means Asiana Airlines Will Likely Save Big Bucks

August 6, 2013 | Charles Bowen

2a65ba09c163bd3a46f8ba161c9379d9It may come as a surprise just how important the nationality of the victims in the recent Asiana Airlines crash may be in determining the ultimate size of the eventual financial settlement. Legal experts familiar with airline crashes say Asiana will likely rely on a series of international treaties to force foreign passengers to bring lawsuits in their home countries, avoiding the costly and plaintiff-friendly American court system.

The crash of Asiana Flight 214 at San Francisco International Airport opened up the South Korean carrier to enormous financial liability. The crash killed three teenagers from China and injured 182 of the 307 other passengers on board. Of those on the plane, 142 passengers were Chinese, 77 were South Korean and 61 were Americans. Though the geographic breakdown may seem beside the point, attorneys say it will end up figuring prominently into Asiana’s settlement negotiations.

Aeronautical experts say they expect Asiana to rely heavily on the 1999 Montreal Convention, a critical piece of international airline law upon which Asiana Airlines is expected to heavily rely. One of the things that the Montreal Convention prevents people from doing is filing a lawsuit in the United States if their "final" destination was outside of the country. Asiana will likely argue that because Chinese and South Korean passengers’ ultimate destinations were overseas (given that most everyone had round-trip tickets), that is the proper forum where their legal claims should be filed.

You may wonder why it matters whether a claim is filed in the U.S. or in South Korea. After all, a lawsuit is a lawsuit, right? Wrong. The airline industry understands perfectly well that America has a history of large verdicts after airline disasters. In the most recent U.S. plane crash prior to Flight 214--the crash of Colgan Flight 3407--fifty passengers and crew and one person on the ground died. Families of the victims sued the airline for more than $900 million. Experts say that even passengers who escaped unharmed could see seven-figure settlements from Asiana and its insurance carriers because of claims alleging severe emotional distress, such as posttraumatic stress disorder. In the 2009“Miracle on the Hudson” crash landing, passengers walked away with hefty cash settlements from U.S. Airways despite the fact that not one passenger ever filed suit against the airline.

Further, California courts have absolutely no cap on the amount of non-economic damages that can be awarded in wrongful death cases. The Chinese and South Korean legal systems are substantially stingier and victims could easily walk away with very little recovery should those countries ultimately be ruled the proper forum for the litigation. Though no one can say for sure how much each individual injury case (or at least each American injury case) will ultimately cost the airline, most experts believe they will fall somewhere in the seven-figure range. Given the hundreds of non-American passengers, should the airline be successful in avoiding American justice, Asiana could very well save hundreds of millions of dollars.