Introduction

A drone came within approximately 200 feet of a Lufthansa Airbus A380 as it approached Los Angeles International Airport on March 19 2016. That incident, together with a surge of reports of close encounters between drones and manned aircraft, puts the issue of rogue drone flights in the spotlight.

In November 2014 a European Commission study(1) observed that:

"due to low barriers to entry in the RPAS (remotely piloted air systems) sector, there is a risk that (in contrast to the manned aviation sector) there could be a significant number of uninsured and illegal operations. If the RPAS sector grows as projected, there could be a need for considerably increased action by national authorities to enforce the existing insurance rules, as well as other regulatory requirements."

The comment about "low barriers to entry" reflects the fact that most civilian drones are small, light and low cost, which makes them attractive to hobbyists as well as businesses. Drones come in a variety of formats, but there are two broad categories:

  • fixed wing; and
  • rotary wing.

Most light drones are of the rotary-wing type, with four, six or eight sets of rotors. A common format is the quadcopter, a helicopter that is lifted and propelled by four rotors. The quadcopter is normally used to carry a camera, possibly with a wireless data link to the ground, enabling real-time surveillance to be carried out at minimum cost.(2)

Some drone pilots undoubtedly fail to comply with existing rules of the air, but few serious accidents have been reported.(3) Fortunately, the Lufthansa incident in Los Angeles did not entail any damage to people or property. No evasive action was taken by the A380 pilot and minutes later the aircraft made a safe landing. Had the outcome of the incident been different, it would have highlighted dramatically the need to enforce the existing rules, including those on liability.

Identification of the drone operator

In the event of a serious drone accident, an important first step towards claiming compensation would be the identification of the drone operator. This may not always be possible. Drones do not always carry registration details. Even if they do, it may still be difficult to identify the operator if the drone is completely destroyed in the accident – for example, if the drone is sucked into the jet engine of a commercial aircraft.

Once the operator is identified, it could face liability for damages. The legal basis for a compensation claim is usually found in national law.

Rome Convention

Some argue that the 1952 Rome Convention(4) applies to accidents involving drones. According to the convention, liability for compensation for damage caused to third parties belongs to the operator of the aircraft, even without proof of the operator's intent or negligence. Pursuant to Article 1 of the convention, "any person who suffers damage on the surface shall, upon proof only that the damage was caused by an aircraft in flight[…] be entitled to compensation".

The convention was drafted before widespread use of drones was envisaged. As it does not give a definition of the term 'aircraft', it may be presumed that the original definition of the Chicago Convention(5) is applicable: "Aircraft is any machine that can derive support in the atmosphere from the reactions of the air."(6) This definition should encompass drones, which are generally understood to be aircraft operated or designed to be operated without a pilot onboard.(7)

Similar to treaties governing liability in respect of passenger injury, the convention provides for maximum amounts of operator liability.(8) If the victim proves that the damage was "caused by a deliberate act or omission of the operator", his or her liability is unlimited.(9)

The convention also addresses damage caused by mid-air collisions. While it does not apply to damage caused to the colliding aircraft, or to the persons or goods onboard such aircraft,(10) Article 7 provides that:

"when two or more aircraft have collided… in flight and damage for which a right to compensation as contemplated in Article 1 results… each of the aircraft concerned shall be considered to have caused the damage and the operator of each aircraft shall be liable."

On this basis, the operator of a drone may be exposed to liability for compensation of the surface damage resulting from a mid-air collision between a drone and a manned aircraft, even if the drone operator is not guilty of causing the collision. The drone operator's liability for surface damage may be unlimited if he or she caused the collision willfully or negligently.

The scope of the Rome Convention is essentially limited to certain international flights, since it governs only ground damage "caused in the territory of a Contracting State by an aircraft registered in the territory of another Contracting State".(11) When damage has been caused by an aircraft registered in the state where the damage occurred, national law applies. If, as is often the case with drones, the aircraft which has caused the damage is not registered, national law also applies. It follows that damage caused by a drone in most cases does not fall within the remit of the convention, since the operation of drones is normally a domestic matter rather than an international one.

The 1978 Montreal Protocol(12) updated the liability limits and widened the Rome Convention's scope by providing that it also applies if the damage is:

"caused in the territory of a Contracting State or by an aircraft, whatever its registration may be, the operator of which has his principal place of business or, if he has not such place of business, his permanent residence in another Contracting State."(13)

Even under these premises, only a few drone operations fall within the remit of the Rome Convention.

In any event, the convention has not achieved widespread acceptance – with 49 ratifications, the convention is applicable in relatively few countries, including Belgium, Italy, Luxembourg and Spain.(14) The 1978 Montreal Protocol has achieved even less acceptance, having been ratified by only 12 countries, none of which are European countries.(15) Within Europe, the convention is normally irrelevant for third-party liability claims against the drone's operator.

Liability regime in Switzerland

Switzerland has not ratified the Rome Convention or the 1978 Montreal Protocol. Thus, national Swiss law governs the issue of third-party liability for damage caused by drones.

Surface damage

Where, due to the operation of an aircraft in flight, a person on the ground is killed, suffers bodily injury or health impairment, or where surface property is damaged, Article 64 of the Aviation Act obliges the aircraft operator to compensate the victim.(16) The Aviation Act applies to both manned and unmanned aircraft. The aircraft operator is obliged to compensate the victim, even without proof of the operator's intent or negligence. The operator's liability is unlimited.(17) On that basis, a drone operator is strictly liable for all surface damage caused by his or her drone.

Where surface damage results from a mid-air collision between two aircraft, Article 66 of the Aviation Act provides that the operators of the two aircraft are jointly and severally liable to the victims on the ground, regardless of the two operators' intent or negligence. Again, liability is unlimited. In the event of a mid-air collision between a drone and a manned aircraft, both the drone operator and the manned aircraft operator are jointly and severally liable for all resulting damage to persons and property on the ground.

Damage caused to colliding aircraft or persons or goods onboard

While the Aviation Act does not address compensation claims for damage caused to the colliding aircraft, or to the persons or goods onboard such aircraft, such claims may be based on general tort law. Article 41 of the Code of Obligations(18) provides that whoever unlawfully causes damage to another individual, whether wilfully or negligently, is liable in damages. It follows that the operator of a drone may be exposed to unlimited liability towards the owner of the colliding aircraft, its crew and passengers, as well as cargo shippers. To establish liability of the drone operator, a claimant must show that:

  • he or she has suffered damage;
  • the drone operator's act that caused the damage was unlawful;
  • there is a link of proximate causation between the wrongful act and the damage;
  • the drone operator was at fault (ie, he or she acted wilfully or negligently).

Depending on the circumstances, the Ordinance on Special Category Aircraft(19) may be of particular importance to establish liability of the drone operator. Some of the ordinance provisions seek to prevent collisions between drones and manned aircraft. For example, the ordinance provides that a pilot of a drone weighing up to 30 kilograms (kg)(20) must maintain direct visual contact with the drone.(21) The drone pilot must monitor the drone's flight path in relation to other aircraft for the purpose of avoiding a collision.

If the drone pilot wishes to use video glasses to operate the drone beyond the visual line of sight, he or she can do so only if the Federal Office of Civil Aviation (FOCA) issues a special permit, which FOCA is generally reluctant to do. Only five permits for flights beyond the visual line of sight have been granted as of February 2016 (one permit has been awarded to the Swiss Post to test their parcel drones).(22)

In practice, FOCA allows the use of video glasses without a permit if a second pilot can always see the drone with the naked eye. The second pilot must remain close to the pilot using video glasses and be ready to take control of the flight at any time.

The ordinance further prohibits flights of drones weighing between 0.5kg and 30kg within five kilometres (km) of runways of any civil or military airport. Within the control zone of an airport, a drone must not fly at an altitude higher than 150 metres above the ground, even if the distance is more than 5km from the runway.(23)

Drone operators which do not comply with the ordinance requirements act unlawfully and are likely to be deemed at fault in the event of a mid-air collision with manned aircraft.

Insurance requirements

While the European Union has thus far abstained from regulating third-party drone operator liability, it has defined insurance requirements for aircraft operators in Europe. Since Switzerland adopted EU Regulation 785/2004 by virtue of the 1999 EU-Switzerland Agreement on Air Transport,(24) the European Union's insurance requirements apply to Swiss aircraft operators as well, including to operators of drones with a maximum take-off mass (MTOM) of 20kg or more.

In respect of liability to third parties, the regulation(25) establishes minimum insurance cover per accident, depending on the MTOM of the aircraft, from 0.75 million special drawing rights for aircraft with an MTOM of less than 500kg, to 700 million special drawing rights for aircraft with an MTOM of 500,000kg or more.(26)

The regulation does not mention drones and drone-specific issues were not taken into consideration when the regulation was prepared. The language of the regulation suggests that the insurance requirements in respect of liability for third parties apply to "each and every aircraft" within the European Union, including drones. However, since the regulation does not apply to model aircraft with an MTOM of less than 20kg, it could be assumed that the regulation does not apply to drones with an MTOM of less than 20kg either.(27) On the other hand, drones with an MTOM of 20kg or more would fall within the remit of the regulation, requiring insurance cover of at least 0.75 million special drawing rights or approximately €930,000.

It is unclear to what extent drone operators comply with these insurance requirements. The commission study found that victims of drone accidents may not be adequately compensated because drone operators might not be insured: "It is impossible to quantify the scale of the uninsured operations at present but there is a risk that it could be a significant proportion of all RPAS operations."

In addition, the Ordinance on Special Category Aircraft provides that liability claims made by parties on the ground against operators of drones weighing up to 30kg must be covered by an insurance policy with guaranteed cover of at least Sfr1 million. Only drones weighing less than 0.5kg do not require third-party liability insurance.

FOCA believes that Swiss insurance requirements are adequate for the time being.(28)

For further information on this topic please contact Andreas Fankhauser at Baumgartner Mächler by telephone (+41 44 215 4477) or email (afa@bmlaw.ch). The Baumgartner Mächler website can be accessed at www.bmlaw.ch.

Endnotes

(1) Steer Davies Gleave, "Study on the Third-Party Liability and Insurance Requirements of Remotely Piloted Aircraft Systems", Final Report November 2014.

(2) Flightglobal, December 10 2014, "Analysis: unmanned aerial vehicle studies warns of risks as industry burgeons".

(3) This update does not address liability for damage resulting from acts of unlawful interference involving drones.

(4) Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface, Rome, October 7 1952.

(5) Convention on International Civil Aviation, Chicago, December 7 1944.

(6) On November 6 1967 the International Civil Aviation Organisation issued a new definition: "Aircraft is any machine than can derive support in the atmosphere from the reactions of the air other than the reactions of the air against the earth's surface."

(7) European Aviation Safety Agency, Technical Opinion, Introduction of a Regulatory Framework for the Operation of Unmanned aircraft, December 18 2015.

(8) Article 11 of the Rome Convention.

(9) Article 12 of the Rome Convention.

(10) Article 24 of the Rome Convention.

(11) Article 23 of the Rome Convention.

(12) Protocol to Amend the Convention on Damage Caused by Foreign Aircraft to Third Parties on the Surface (Rome, 1952) signed at Montreal, September 23 1978.

(13) Article XII of the 1978 Montreal Protocol.

(14) The Rome Convention is effective for Algeria, Angola, Argentina, Azerbaijan, Bahrain, Belgium, Benin, Bolivia, Brazil, Cameroon, Cuba, Ecuador, Egypt, El Salvador, Gabon, Gambia, Guatemala, Guinea, Haiti, Honduras, Iraq, Italy, Kenya, Kuwait, Lebanon, Luxembourg, Madagascar, Maldives, Mali, Mauritania, Moldova, Morocco, Niger, Oman, Pakistan, Papua New Guinea, Paraguay, Russia, Rwanda, Seychelles, Spain, Sri Lanka, Suriname, Togo, Tunisia, United Arab Emirates, Uruguay, Vanuatu and Yemen.

(15) The 1978 Montreal Protocol is effective for Azerbaijan, Benin, Brazil, Burkina Faso, El Salvador, Guatemala, Kenya, Lebanon, Madagascar, Morocco, Niger and Suriname.

(16) Federal Law on Aviation (Aviation Act), December 21 1948 (September 1 2014).

(17) Except in the event that the aircraft was used by another person without the operator's consent (unlawful user).

(18) Federal Law March 30 1911 on the ammendment of the Civil Code (Part 5 of the Code of Obligations; Stand 1, January 2016).

(19) Regulation of the Federal Department of Environment, Transport, Energy and Communications on Aircraft of Special Categories (VLK), November 24 1994 (July 15 2015).

(20) For drones heavier than 30kg authorisation is necessary. FOCA specifies the requirements for authorisation and the operating conditions on a case-by-case basis.

(21) Article 17, VLK.

(22) Federal Office of Civil Aviation, Civil Drones in Switzerland, February 7 2016.

(23) Article 17 VLK.

(24) Agreement between the Swiss Confederation and the European Community on Air Transport, June 21 1999.

(25) Regulation 785/2004 of the European Parliament and Council on Insurance Requirements for Air Carriers and Aircraft Operators, April 21 2004.

(26) Article 7 of Regulation 785/2004.

(27) Article 2 of Regulation 785/2004.

(28) Federal Office of Civil Aviation, Civil Drones in Switzerland, February 7 2016.

This article first appeared in IAM. For further information please visit www.iam-media.com.