Criminalisation in Aviation and the Costs of Defence
11 November 2014 | London, England
by Sean Gates, Senior Vice President, Kenyon International Emergency Services
Over recent years there has been a marked tendency after aircraft accidents for criminal investigations to be instituted and prosecutions to ensue. Kenyon advises our aviation clients to consider enhancing their insurance coverage to include the cost of defending both the airline and the airline’s employees – at all levels during such investigations. Until now, such coverage has generally been limited to company directors and officers. However, criminal investigations and prosecutions have not. They have targeted operating crew, maintenance staff, ground staff and various company managers.
The strategy of prosecutors in many of these accidents is to focus efforts on employees at lower levels in the organization with a view to securing evidence against post holders and directors, often with inducements up to and including immunity from prosecution. Given the international nature of the sector, the exposure to prosecution can arise in the most unexpected countries where the process will be conducted in a foreign language subject to different rules and procedures and can result in incarceration of the accused during the prosecution process.
Emergency response plans must address this and include provision for the preparation of and conduct of the defense of investigations and criminal proceedings. Employees, including those not being prosecuted, need the reassurance that their company will stand behind them. Criminal investigations and prosecutions are damaging to corporate reputation jeopardizing the future of not only the employees but also the directors and shareholders of any organization. Often, they bring no additional relief for survivors or their families. The time management spends focusing on the defense of criminal proceedings is a massive burden on the company and on the individual or individuals concerned. Securing provisions for the cost of managing the defense, including lawyers and experts fees, needs to be an integral part of an emergency response plan.
You may already have some liability insurance. Kenyon encourages you to fully understand the policy, as the typical liability insurance policy does not always cover the defense of criminal prosecutions. Further, those policies often only give protection in a few countries and, where they apply, any payments will end when the liability claims have been disposed, usually well before the conclusion of the criminal process.
In a European context, the likely cost of defense is usually estimated at around €1 million for each defendant. There are usually multiple accused as was seen, for example, in the Spanair, Helios, and Concorde accidents. Keeping the exposure of industry and individuals to these costs in mind, we have been working assiduously in the insurance market, seeking an insurer prepared to offer dedicated criminal defense costs insurance to aviation organizations.
Coverage has been arranged with the Lloyds market through Lloyds Brokers via Russell White Marine Limited; therefore it is now possible to secure financial protection and access to the best expertise to deal with this aspect of an aviation accident. Planning for the contingency of an accident is part of the emergency response program. Planning for the possibility of criminal prosecutions should be a vital part of the plan.
We encourage you to speak with Kenyon’s Senior Vice President, Sean Gates for more information at email@example.com. Sean can advise on the suitability and extent of the coverage you have in place, and on the appropriate elements to be included in your emergency response plan. You may also contact Graham White of Russell White Marine Limited directly at firstname.lastname@example.org.