Germanwings: How Much Will The Families Of Flight 9525 Receive In Crash Settlements?

The insurers of Deutsche Lufthansa AG, the parent company of Germanwings Flight 9525 whose co-pilot allegedly deliberately crashed the plane into the French Alps last week, will likely owe victims’ family members around $350 million, say aviation law experts. Lawsuits filed for damages are unlikely to face many challenges in court.

The rules that govern international commercial flights guarantee families of victims about $150,000 in initial damages, without regard to liability or who was at fault. Lufthansa announced on Friday that it would pay victims’ families about $54,000 of that initial amount, and neither that payment nor the full amount guaranteed by international law would impact any potential future claims the victims’ families might make.

“It used to be that the plaintiffs would have to prove that an airline was willful and wanton, or reckless, in order for them to get more than the guaranteed amount,” said Kevin Durkin, an aviation attorney and former chair of the aviation section of the American Bar Association. “But it changed with the Montreal Convention in 1999. Now, plaintiffs are eligible for unlimited damages unless the airline can prove they had absolutely no fault whatsoever. That’s an impossible burden for Germanwings and Lufthansa. There’s going to be unlimited liability.”

The actual payouts, however, will be determined by where the families chose to file lawsuits. International law leaves it up to national courts to calculate how much money is awarded to victims’ families. Under the Montreal Convention, plaintiffs can file suits in the country where the airline is headquartered, the country of the deceased, as long as the airline flies there, or where the ticket is purchased, as long as the airline flies there.

While passengers aboard Flight 9525 came from 16 countries, most were German or Spanish citizens whose families will have to file lawsuits in those countries. But families of U.S. citizens who were on the flight would be eligible to bring a lawsuit in American courts, since Lufthansa does operate out of the United States.

And the jurisdiction matters: Typically, U.S. courts are the most generous, said Louis Franecke, an attorney specializing in aviation crash litigation. “Germany is not a very generous country when it comes to awarding damages. Neither is Spain, for that matter,” he said.

James Healy-Pratt, head of the aviation practice at Stewarts Law in London, estimated that Lufthansa’s total liability will stand at about $350 million in damages awarded to the victims’ family members. That takes into account the average settlement amounts for airline disasters in many countries involved: $1.3 million in German cases, $1.4 million in Spanish cases and $4.5 million in American cases. If the crash had occurred in the U.S., that estimate would have been much higher.

The process for filing and resolving these lawsuits will likely take two years, experts said. Durkin expects that Lufthansa is unlikely to contest liability issues under the Montreal Convention. “Lufthansa will settle through its insurer, Allianz,” Durkin said.

The biggest pushback from the airline will likely be on how much each victim’s family is owed. Passengers’ age, employment status, income and whether they had any defendants all go into determining how much a victim’s family might receive.

“Let’s say there was a 35-year-old woman on board who was married, had four kids and served as the breadwinner for her family. She’s likely to be awarded more than, say, a 50-year-old who has never been married, has no dependents and whose parents are deceased,” said Durkin. “Awards can vary widely, from the low millions to the high eight figures, at least in the U.S.”

In a news conference on Thursday, Lufthansa CEO Carsten Spohr told reporters that the airline would do everything it could to meet its responsibilities to the victims. “Our first priority is to help the families where we can,” he said.