Delta Air Lines has offered people aboard the flight that flipped onto its roof after crash-landing in Toronto last week a $30,000 payment “with no strings attached.” Some of their lawyers think they should take it – but that money from the airline shouldn’t stop there.
All 80 people aboard Flight 4819 survived, though at least 21 were physically injured and later released from the hospital. A Delta (DAL) spokesperson confirmed to MarketWatch it has offered $30,000 to passengers, and that the money has “no strings attached and does not affect customers’ rights.”
The gesture has raised plenty of questions, however. Is this $30,000 payout on the low side for surviving such an ordeal? How does it compare to previous goodwill payments from airlines, and are these passengers being advised to take the deal? MarketWatch spoke to several lawyers who said that they are representing passengers who were aboard that Delta flight. Here’s what they have to say about the airline’s payout, and what could come next:
Does accepting the $30,000 payment mean these passengers can’t sue?
Lawyers described the $30,000 offer as an “advance payment” made to those impacted in the crash, and it will not keep them from potentially pursuing legal action later on.
“The passengers should not be waiving any rights as far as getting that money,” Robert Hedrick, attorney at Aviation Law Group PS, told MarketWatch. Hedrick has been in ongoing contact with passengers on Flight 4819, and is in talks to legally represent some of them. “It should not be a full and final settlement and release the airlines from any claims,” he said.
Something to keep in mind: If a person were to accept Delta’s $30,000 offer and pursue legal action later on, however, then the $30,000 payment would be deducted from any total settlement amount. For example, if a person took the $30,000 offer, and then later won a legal case against Delta for $500,000, then they would receive $470,000 at that later date. Legal fees or commissions would also be deducted from a potential future legal proceeding, but not from the original $30,000.
So if people can still sue, why did Delta offer the payment?
Since passengers could still sue the airline even after accepting the $30,000 payment, one might think the offer is purely a demonstration of compassion. But that isn’t the whole story.
Such an advance payment is actually required by the Montreal Convention, an international agreement that holds airlines financially accountable for injuries that occur on international flights.
“There was some confusion that the airline was doing this as a goodwill, out of the goodness of their heart, but the reality is by treaty, they are required to give an advance payment,” James Brauchle, aviation attorney at MotleyRice, told BWatch. Brauchle said that he is also representing some passengers on Flight 4819.
“Under the Montreal Convention, they [the airline] have liability to pay for damages and losses arising from a plane crash,” Vincent Genova, head of Rochon Genova’s Aviation Litigation Group, told MarketWatch. Some of Flight 4819 passengers have retained Genova as their attorney, he said.
“You don’t have to show the airline was negligent,” said Genova. “The fact that people were injured in a flight entitles that person to compensation.”
But the airline is likely also hoping that the gesture is seen as a sign of good faith, legal experts noted, to help keep future negotiations amicable. “It’s pretty simple. The airline doesn’t want to be in court and fighting with their own passengers,” Hedrick said. “Some mistakes were certainly made, [so] it’s a step of goodwill for the airline to try to take care of their passengers at this early stage.”
Is Delta’s $30,000 offer reasonable? How does it compare to other airline payouts?
While Delta was required to offer some form of advance payment compensation, the specific amount was up to their discretion. But according to the Montreal Convention, the payout could be a little over 280,000 Canadian dollars on the high end, or roughly $197,000.
“There is no set number,” Genova said. “It’s a number that’s arbitrarily chosen by the airline or its insurer.”
So is the $30,000 offer a fair number for the passengers in this particular crash? The lawyers that MarketWatch spoke to thought it could be higher. And that’s where future lawsuits could come in.
“It’s not a fair number to compensate them fully, but it’s a start to help them deal with financial issues and the stress that everyone faces when they are unable to return to a normal life,” said Genova.
“Frankly, I think they should make it $100,000 per passenger,” Hedrick said.
So how does this stack up to previous payouts? In 2015, Lufthansa (XE:LHA) subsidiary Germanwings initially paid out $54,250 to passengers’ families after a crash that killed everyone aboard, according to the New York Times. French investigators concluded that the co-pilot locked the pilot out of the cockpit and deliberately crashed the plane. But passengers on the 2009 “Miracle on the Hudson” U.S. Airways flight that made a water landing in the Hudson River between Manhattan and New Jersey were given just $5,000 and a ticket refund, per CNBC.
So, are lawyers advising their clients to take the $30,000 offer? And what can it be used for?
Every lawyer who spoke with MarketWatch for this story said they are indeed advising these passengers to accept the $30,000 payment.
“There’s no reason why they should not take it as long as they are not signing away their rights, which they are not being asked to do,” said Genova.
“I don’t see a reason not to take it,” agreed Hedrick.
The payment is being offered to help passengers navigate any financial crises that could arise after the crash, such as if they lose income from being injured and are unable to work, or to assist them if they do not have certain vacation or medical coverage, or for emotional distress. The $30,000 is not contingent on any injuries, and can be used for anything including rent, mortgage payments, food or medical bills in the aftermath of the incident.
What’s next?
The first lawsuits against Delta have started to come in. Texas resident Marthinus Lourens’s attorney Andres Pereira filed a lawsuit last Thursday, and said his client was “drenched in jet fuel” while the plane was on fire in a statement made on his firm’s website. Lourens is seeking in excess of $200,000 in damages, according to the complaint. Another lawsuit was filed in Minnesota as state resident Hannah Krebs alleged, through her attorney, that she suffered “extreme injuries and emotional distress.” She’s seeking an unknown amount in compensation.
But the legal process after receiving the initial $30,000 advance payment could be lengthy, in part because passengers may not realize the full impact of the incident for some time.
“They might not know the extent of their emotional injuries until weeks or months later. They might not take a flight for two or three months…they might have a claim for an inability to fly,” Hedrick said.
