Spotlight: key liability issues for the aviation sector in Israel

All questions

Legal framework for liability

i International carriage

Israel is party to several international aviation-related conventions governing the liability of air carriers in international carriage, including the Warsaw Convention 1929, the Guadalajara Convention 1961 and the Montreal Convention 1999, as well as their respective protocols. These conventions have been given effect in Israeli domestic law by the Air Transport Law 1980 (ATL). Section 3B of the ATL provides that where both the Montreal Convention and another of the conventions adopted by the ATL apply, the Montreal Convention will govern.

Section 10 of the ATL provides that the liability for damage, including liability for the death of a passenger, of a carrier under the ATL (i.e., the liability of a carrier under a convention made applicable in Israel by the ATL), substitutes the liability of the carrier under any other Israeli law. The Israeli Supreme Court has implemented this rule ('the exclusivity of grounds of action rule' or 'the pre-emption of claims rule'), holding that where a claim is governed by the ATL, a passenger will not be able to rely on other provisions of domestic law.⁶

Israel is also party to the Chicago Convention on International Civil Aviation 1944, adopted into domestic law by the Air Navigation Law 2011 (ANL), and to the Tokyo Convention 1944 on offences and certain other acts committed on board aircraft given domestic effect by the Air Navigation Regulations (Offences and Jurisdiction) 1971.

ii Internal and other non-convention carriage

The ATL provides that the Montreal Convention shall apply, mutatis mutandis, to internal flights within Israel.⁷ The Aviation Services Regulations (Compensation and Assistance for Flight Cancellation or Change of Conditions) (Internal Flights) 2013 (enacted under the ASL) provide (in modifying the rule under the ASL applying to international flights) that a flight delay of three hours or more for an internal flight shall be treated as cancellation of the flight and vest passengers with the right to compensation accordingly.⁸

Under Section 338(a)(2) of the Penal Law 1977, the reckless or negligent operation of an aircraft, in a way that could endanger human life or result in injury, is a criminal offence punishable by a prison sentence of up to three years.

iii General aviation regulation

Civil aviation operations (including the operation of helicopters and gliders) are governed by the ANL and the regulations enacted thereunder. The ANL regulates the identification and registration of aircraft, licensing and training of personnel, airworthiness of aircraft, general operating and flight rules, commercial air services and air navigation services.

iv Passenger rights

Passenger rights are regulated pursuant to the ATL by the Montreal Convention (or other applicable convention) and the ASL. The ASL is a pro-consumer act of legislation that regulates passengers' rights and carriers' duties, including those relating to payment of compensation (without the need to prove damage) in the case of flight delays, cancellations, denial of boarding and downgrading.⁹ The ASL also provides that in cases of flight delays of two hours or more and flight cancellations, the carrier is obliged to provide passengers with ground assistance, including communications services, food and beverages and, in some cases, hotel accommodation.

Although very similar to Regulation (EC) No. 261/2004, the ASL includes a number of innovations, such as:

1. the determination that a delay of eight hours or more is considered a flight cancellation;
2. the authority granted to the court to impose exemplary damages on the carrier in cases of non-compliance with the ASL; and
3. the obligation of a flight operator to station representatives for the provision of assistance to passengers in the exercise of their rights under the ASL at every airport from which the operator commences flights to and from Israel (including flights to Israel with stopovers and serving passengers holding a return ticket to and from Israel).¹⁰

In the spirit of the pro-consumer nature of the ASL, the Israeli courts have given a narrow interpretation to the provision in the ASL exempting the carrier from the obligation to compensate passengers in the case of cancellation of flights where the cancellation was caused by special circumstances beyond the carrier's control that could not have been prevented even if the carrier had done everything in its power to do so, so that, in general, technical malfunctions in an aircraft will not constitute such circumstances¹¹ unless the malfunction is proved to be rare and not to have been preventable by the performance of proper maintenance. A judicial decision reflects the same approach, in which the court held that for an airline to avoid payment of compensation for cancellation of a flight and, in particular, for it to prove that it has done everything within its power to prevent such cancellation, it may be necessary for the airline to prove that it was not able to lease an alternative aircraft or to purchase tickets for its passengers on the flight of another airline.¹²

Due to the covid-19 outbreak, the ASL was amended on 14 July 2020, with temporary effect, by the Aviation Services Law (Compensation and Assistance for Flight Cancellation or Change of Conditions) (the New Coronavirus – Temporary Order), 2020 (CV Temporary Order).¹³ According to the explanatory notes published in conjunction with the proposed amendment, the CV Temporary Order is directed at modifying the internal balance in the ASL between the interests of consumers and airlines in light of the unprecedented financial distress caused to airlines by the covid-19 crisis, many of which were (and still are) in a difficult financial situation. Among the main amendments to the ASL enacted by the CV Temporary Order are provisions exempting airlines from paying passengers statutory compensation for cancellation of all flights scheduled to depart after 1 March 2020 and extending the period for refund by airlines of fares paid for the cancellation of flights in the said period from the current 21 days to 90 days. The provisions of the CV Temporary Order have been amended and extended from time to time and will expire on 6 July 2021,¹⁴ following which the regular provisions of the ASL (amended by the CV Temporary Order) will be reinstated.

Passengers' rights relating to the purchase and cancellation of flight tickets are regulated by the Israeli Consumer Protection Law 1981 (CPL), which, in certain circumstances, including transactions made at a distance (by telephone, email, etc.) and, subject to certain conditions, entitles consumers to cancel transactions without cause and to the reimbursement of the price paid, minus a small cancellation fee.¹⁵

The carriage of disabled passengers is governed by the Israeli Regulations for Equal Rights for People with Disabilities (Regulation of Access to Public Transport Services), 2003 (RER). The RER lays down certain technical qualifications for the use of aircraft, including a provision that an aircraft shall not be operated for the carriage of passengers if it is not adequately adapted for the disabled.¹⁶ Section 14 provides that disabled persons have the right to a suitable escort at the terminal and at the crossing from the terminal to the aircraft; the right to have the appropriate person at the airport of destination notified regarding their expected arrival; and the right to have their wheelchair loaded in a manner enabling it to be placed at their disposal immediately upon disembarking from the aircraft, provided the carrier has received at least 48 hours' prior notice of the disabled person's expected arrival.

v Other legislation

Loud noise generated on low-altitude flight routes near populated areas may constitute a nuisance to residents of those areas. With a view to reducing the extent of this nuisance, the Israeli Ministry of Environmental Protection, in conjunction with the Israel Airports Authority, has issued rules governing the construction and planning of airports. Other measures directed to the same purpose include the imposition of night and weekend curfews and the requirement that compliance by an aircraft with the Flight Regulations (Aircraft Noise) 1977 is a condition for issue of a flight permit.

Israel has strict anti-bribery rules. It is a member of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, and gave domestic effect to the Convention on 11 June 2008 by adding Section 291A to the Penal Law 1977, providing that a person giving a bribe to a foreign public official for an activity related to his or her position in order to obtain, secure or promote business activity or other advantage in respect of business activity shall be deemed to have committed bribery under Section 291 of the Penal Law.

For competition legislation, see Section VI.