Legal Considerations

1
Topic 3

• Legal Considerations
• Affecting Risk Acceptance
• R. Scott Johnson
• Legal Aspects of Aerospace TC
• McKee, Voorhees Sease, LLP

2
What is risk?

• Potential for

liability
3
Negligence

• Duty
• Breach of Duty
• Injury
• Causation

4
Negligence

• Duty
• Generally Exercise Reasonable Care
• Breach of Duty
• Injury
• Causation

5
Negligence

• Duty
• Specifics Statutes, Rules, and Regulations
• Breach of Duty
• Injury
• Causation

6
Specifics Statutes, Rules, and Regulations

• Federal Aviation Act of 1958
• 49 U.S.C.
• Provides regulatory authority for
• Department of Transportation
• Aviation Economic Regulations or AERs 14 C.F.R.
  200-400
• Federal Aviation Administration
• Federal Aviation Regulations or FARs 14 C.F.R.
  1 - 199
• National Transportation Safety Board
• 49 C.F.R. 830, 31, and 45

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Specifics Statutes, Rules, and Regulations

• State products liability laws
• liability of a manufacturer or seller of a
  chattel which is defective and/or unreasonably
  dangerous and causes injury.
• William R. Prosser, Handbood of the Law of Torts
  641 (4th ed. 1971)
• Three theories of recovery
• Warranty (contract remedy)
• Strict liability (tort remedy)
• Negligence (tort remedy)

Vary by State
8
Negligence

• Duty
• Breach of Duty
• Injury
• Causation

liability
9
The Bad

• Create broad range of compliance duties
• Create investigation bodies
• NTSB determines probable cause for all aircraft
  accidents in the U.S.
• Create Enforcement Procedures
• Civil and criminal penalties

10
The Bad

• Other Sources of Liability
• Contract provisions
• Other Federal and State Statutes and Regulations
• Environmental
• Intellectual Property
• Employment
• Corporate
• International Treaties

11
The Good

• Statutes can be good?

12
The Good

• General Aviation Revitalization Act of 1994 (42
  U.S.C. 40101)
• 18 year statute of repose
• prohibits any legal action for any aircraft,
  engine or part at issue
• Applies to all general aviation aircraft

13
The Good

• General Aviation Revitalization Act of 1994 (42
  U.S.C. 40101) - Exceptions
• Manufacturer knowingly misrepresented or
  concealed or withheld from the FAA information
  relating to
• The type certification
• components
• airworthiness

14
The Good

• General Aviation Revitalization Act of 1994 (42
  U.S.C. 40101) - Exceptions
• claimant was a passenger for purposes of
  receiving emergency or medical care

15
The Good

• General Aviation Revitalization Act of 1994 (42
  U.S.C. 40101) - Exceptions
• suit is brought under the manufacturers written
  warranties

16
The Good

• State statute of limitations
• International Treaties
• Warsaw Convention
• Other liability limiters
• Sales contract provisions
• shift liability away
• limit liability
• Insurance agreements
• cover yourself

17
The Beautiful

• Risk Management Programs
• By whom?
• Government Initiated
• NTSB or FAA
• Insurance Company
• In-house

x
18
The Beautiful

• Risk Management Programs
• Evaluate loss potential
• Use established risk management techniques
• Put a plan in action

19
The Beautiful

• Risk Management Programs
• Evaluate loss potential
• Total potential loss X Chance loss will occur
• Account for all losses (Economic Social)
• Use established risk management techniques
• Put a plan in action

20
The Beautiful

• Risk Management Programs
• Evaluate loss potential
• Use established risk management techniques
• Eliminate (Dont Do It)
• Reduce (Rapid Response)
• Transfer (Insurance)
• Retain (Savings Plan)
• Put a plan in action

21
The Beautiful

• Risk Management Programs
• Evaluate loss potential
• Use established risk management techniques
• Put a plan in action
• Identify the risks
• Maintain database of accidents, lawsuits,
  liability situations
• Create contingencies and risk reducing methods
• Example British Airways BASIS program

22

Thank you!
R. Scott Johnson McKee, Voorhees Sease, PLC 801
Grand Avenue, Suite 3200 Des Moines, Iowa
50309 johnson_at_ipmvs.com