It is trite to say that the world is becoming smaller, yet it is true. For
all of us who travel for business or pleasure, horizons expand and widen, and
as we travel from country to country, and continent to continent, the challenges
for lawyers become more complex and demanding. No longer is it sufficient
to understand the laws and practice competently within your own jurisdiction,
be it the United States or another country. Once it was enough to do the
best you could within your own system, however, it is now necessary to ensure
you get the best, by considering all forums and jurisdictions which play a part
in the particular case. This is all the more true when the wrongdoer is
an international corporation operating throughout the world, seeking to take
cover behind conventions, jurisdictions, or the weaknesses of a particular local
legal system. If you are to serve those you represent, to ensure that
those who commit wrongful acts against your clients are brought to justice,
you must not only look to your own legal system but beyond to other forums
and determine where the interests of your clients will best be served in the
complex matrix of laws, countries, jurisdictions, and philosophies which may
apply to any one case.
The village of Lockerbie has a population of approximately 3000 and is populated
by sheep, cattle, and farmers. It is situated in southwest Scotland and
is as remote from the world of international corporations, terrorism, treaties,
and issues of conflicting laws as one could imagine. Yet, on December 21,
1988 at 7:03 p.m., Pan Am Flight 103 exploded over the village of Lockerbie,
killing 259 passengers and crew members, eleven residents in the village, and
maiming many others both physically and psychologically. Lockerbie soon
became the focus of one of the worlds biggest criminal investigations tracking
down terrorists. The city was also the center of one of the greatest, or
indeed perhaps the greatest, law suits of modern times. The families
of the deceased and the injured banded together to discover the identity of
the terrorists and their method for overcoming the security of the airports.
The task facing the relatives was enormous. Pan Am was an international
airline, and an American corporation, experienced in dealing with claims arising
out of accidents and terrorist incidents. Within hours of this tragedy,
it was represented by teams of the world’s finest lawyers, loss adjusters,
and public relations experts. Pan Am was protected by the Warsaw Convention,
which limits damages to a derisory level. Additionally, this tragedy
took place in the skies over Scotland, a country with its own legal system
under which damages for wrongful death are notoriously low.
Before the smoke had cleared from the wreckage and from the burning homes of
Lockerbie, rumors abounded as to how such a tragedy could have taken place. Soon
after, loss adjusters appeared on the scene and advised families that they should
accept the Warsaw Convention limit which was generously offered for those who
were prepared to sign. Some who were approached were advised to stay away
from “ambulance chasing lawyers” who could do nothing for them since
the Warsaw Convention limits damages.
Simultaneously, stories appeared in the press which pointed out that the airlines
could do little or nothing to avoid the efforts of determined and clever terrorists
who planned to, and were prepared to, circumvent airline security. We were
reminded many times that Pan Am security was as good as, if not better than,
any other airline in the world. For those left bereaved, and for those
left injured, it became much like the Biblical story of David and Goliath. Isolated
and financially weak individuals were facing the enormity of an international
corporation surrounded with all the might of the international aviation insurance
industry.
Unfortunately for Pan Am and their insurers, Britain was no stranger to disasters. From
1985 to 1988, Britain was the site of three major disasters. These were
the Manchester air crash, which killed fifty-four people in 1985, the North sea
crash of a chinook helicopter carrying fifty-five oil workers in 1986, and the
Piper Alpha off-shore oil platform explosion which killed 165 people. The
attorneys involved in these cases learned to network. They also learned
that insurers pick off clients, one at a time, to divide and settle, if not to
conquer. The attorneys learned to forum shop and to seek out the best courts
and the best legal systems available. They learned to use what was good
in our own system to assist in investigation or, in the alternative, to take
the litigation somewhere else.
The legal system in Scotland moved quickly with the help of the Law Society
of Scotland. Attorneys who had been involved in mass disaster cases and “foreign” litigation
were quickly summoned to assist. The Lockerbie Air Disaster Group was
formed.
Each attorney, whether based in Scotland, England, or elsewhere, continued
to represent the interests of individual clients. The attorneys were encouraged
to join the Lockerbie Air Disaster Group as a coordinating body. The Group
was led by a Steering Committee consisting of lawyers experienced in international
litigation. Its job was to coordinate the claims and to represent the interest
of all claimants as well as to seek out, retain, and advise the best attorneys
from the forum chosen for litigation. It would also be the Air Disaster
Group’s job to coordinate and direct the legal investigation to all claims
arising out of the disaster. Within a matter of weeks of the disaster,
the attorneys were in pursuit of Pan Am.
The Air Disaster Group had some important decisions to make. The attorneys
needed to understand the strengths and the weaknesses in their own legal system
and the choices of forum open to them. From the beginning, Pan Am posited
that it could defeat any attempt to establish willful misconduct which would
be necessary if we were to lift the Warsaw Convention monetary damage limits. Pan
Am, and its insurers, made it plain that damages would be offered up to the Warsaw
limit but not above and that this condition was not negotiable. In assessing
the Scottish legal system, the attorneys found that the weaknesses considerably
outnumbered the strengths. The strengths were obvious: home ground
and knowing how to make the system work well. Another strength was the
opportunity, both formally and informally, to follow the official investigators
into the disaster area and to pick up information as soon as it was made available. More
importantly, some form of official inquiry would be held under Scottish statute
since the crew had died within its jurisdiction. There would have to be
a Fatal Accident Inquiry or, at the very least, a Public Inquiry. The
official inquiry would be brought by the Crown, who would require the inquiry
to take place in open court before a judge, with the attendance of witnesses
and the production of documents and exhibits.
We knew that such an inquiry would provide an opportunity for discovery of
information beyond anything available in the United States. This wealth of information
would give us a chance to take litigation beyond Scotland to America, the home
of Pan Am. The damages available to those affected by this tragedy, whether
passengers or those on the ground, would be miserably small and insignificant
in Scotland, in comparison to those which might be awarded by a jury in America,
provided that we could prove willful misconduct by Pan Am.
It then became necessary to seek out attorneys in the United States. Those
attorneys experienced in litigating in the States view this process as the “beauty
parade.” Ultimately, Stuart Speiser of Speiser, Krause, Madole & Nolan
of New York chose to represent those within the Lockerbie Air Disaster Group.
It was decided that the British cases, which included ground claims, would
be pursued in Florida. Aaron Podhurst, a Miami attorney, handled these cases. ALERT,
the company responsible for providing security to Pan Am 103, was a Florida based
corporation. Since it was not an airline, ALERT did not enjoy protection
under the Warsaw Convention, a clear advantage. Stuart Speiser and his
team would work closely with others, notably Lee Kreindler, in the United States
representing the families of passengers. Both Speiser and Kreindler have
international reputations in aviation cases.
The decision was made to exhaust our opportunities by way of discovery and
investigation within the Scottish legal system. A decision was also made, however, to
remove any litigation from that system, which was one which would short change
the widows and orphans, to the United States. The consensus among the
attorneys was that realistic damages could be recovered in America, where a
body of expertise in dealing with such cases existed.
In Scotland, as in England, no contingency fee system exists and litigation
would deliver inconsequential damages. Furthermore, the Scottish and English
system have little experience in aviation cases, in which a jury would probably
not be allowed to decide an issue such as “willful misconduct.” This
type of issue is generally regarded as too complex and too difficult for juries
and is left for judges to decide.
As a result, we have a system where widows and orphans are short-changed and
where the courts are open only to those who are very wealthy and can afford
to instruct attorneys. Moreover, the system is open to those who have the
benefit of publicly funded litigation through a system of legal aid, which is
largely restricted to people who are unemployed and have never been granted in
a multi-party litigation case such as the Lockerbie disaster. In contrast,
the contingency fee system in the United States has, as a matter of fact and
not of conjecture, granted greater access to the courts for those who have
suffered from the wrongful acts of others.
Wrongful death litigation is expensive in the United States. Large damage
settlements are not only a proper reflection of damages for those bereaved or
seriously injured, but the settlements also provide an economic imperative to
promote and encourage change and the improvement of safety standards. A
system which allows juries to decide these issues, coupled together with the
contingency fee system, provides an opportunity for those affected by such
tragedies to retain skilled representation and ensures that David stands equal
with Goliath.
The Fatal Accident Inquiry (FAI) took place between October 1, 1990, and
February 13, 1991. The members of the Air Disaster Group were hard at work
with the inquiries, discovery, investigation, and paper work within a few
weeks of the tragedy. The FAI was an opportunity to present some of
the information in our possession, to flush out information which we suspected
but could not prove, and to see a preview of the defense that Pan Am would
ultimately mount if we ever managed to get the matter to trial in the United
States.
The FAI was successful beyond our wildest dreams. Pan Am had joined
the battle but was soundly beaten. This encounter was the first of
a relentless series of defeats for Pan Am. We were now in a position
to show that the willful misconduct verdict returned in New York on July 10,
1992, withstood the rigors of the American appellate system and stands as a
final verdict. The only the question left to resolve was the issue of
damages.
We established that this disaster occurred as a result of a bomb, “an improvised
explosive device,” being placed within a Toshiba radio situated in a brown
Samsonite suitcase. The location of the suitcase established beyond doubt
the suitcase was an interline bag; namely, it had come from another carrier and
had been placed on a Pan Am flight at some point in its journey. From
its location, we were able to establish it could only have been loaded on the
airplane at Frankfurt, Germany.
Furthermore, the baggage tags led to a precise paper trail which established
that the bag in question was an interline transfer bag from Air Malta Flight
180. The unaccompanied bag was placed on Pan Am 103A, a feeder flight,
and was transferred to Flight 103 at Heathrow Airport, outside London. We
also established the bags transferred from Pan Am 103A were taken directly from
that aircraft to Pan Am 103, and that they were not counted or weighed. Moreover,
they were not reconciled with the passenger manifest, and they were not x-rayed
at Heathrow. Thus, the bag, which was loaded at Frankfurt, traveled to
London and was loaded on Flight 103 without being identified as an unaccompanied
bag.
Additionally, we established one of the two Libyans now being sought for the
bombing was the Libyan Arab Airlines station manager at Malta who had unlimited
access to the baggage area for Air Malta flights. Libyan Airlines used
the same baggage tickets as Air Malta, and on December 21, 1988, the Libyan Airlines
flight to Tripoli was processed at the same time and at the same counter as Air
Malta Flight 180. Furthermore, the security procedures at Malta were
symbolic at best.
In May 1986, Pan Am instituted a massive marketing and advertising campaign
to regain the confidence of international travelers, particularly those in
America whose confidence in travel had been undermined by numerous terrorist
threats. Advertisements were run in newspapers outlining Pan Am’s
new security system entitled “ALERT.” The aim was to make
Pan Am the safest airline in the world. Pan Am even charged a surcharge
of $5.00 per ticket to pay for this new unparalleled security system. We
discovered, however, that the funds gathered were never allocated to security
but were being used by the airline, which already was in deep financial trouble.
Pan Am staged a show of guard dogs sniffing suit cases at New York’s Kennedy
Airport. These dogs had coats on their backs with the name ALERT. The
reality, as we discovered, was that the dogs had been hired from a cat and
dog home, knew nothing, and were not trained to detect explosives. The
dogs were bewildered, rented for the day, and accomplished nothing more than
to urinate over the suit cases.
We discovered, in September 1986, Pan Am obtained a private security report
from Israeli security experts who provided advice to a number of airlines,
including El Al, the Israeli state airline. The report revealed Pan Am
was very exposed to terrorist attack, particularly from unaccompanied bags
and plastic explosives. Pan Am relied too heavily on x-rays for screening
bags and needed procedures for baggage reconciliation. Particularly in
matching bags to the passenger manifest and identify any unaccompanied bags. The
report warned Pan Am it had simply been good luck which had saved them from
disasters.
We also discovered the man in charge of the ALERT operation in Frankfurt and
responsible for the security of Pan Am flights had a criminal record. His
hiring practices had more to do with his personal orientation than with any
other relevant factor. The employees responsible for operating the x-ray
screeners were largely untrained. The training video was shown in English
and many of the employees did not speak English.
Positive passenger baggage reconciliation was long recognized as an important
element in the system designed to prevent the carriage of unaccompanied bags. Unaccompanied
bags were a well-established method used by terrorists to get bombs on board
airline flights. The Federal Aviation Administration (FAA) required a
positive match of bags to boarding passengers in airports which were classified
as extraordinary security risks airports. Frankfurt and London had been
categorized by the FAA as falling into that category. Under FAA rules,
once an unaccompanied bag was identified at one of the high risk locations,
it could only be carried on board an aircraft if physically searched. Pan
Am had abandoned this positive matching process without written approval in
February 1987 at Heathrow and in July 1988 at Frankfurt. Without permission
from the FAA, Pan Am had substituted what they described as an “administrative
match and positive passenger control.” The new administrative match
and positive passenger control system was inadequate because it did not deal
with interline bags. Pan Am was aware of their duty to meet the FAA
Regulations. The rule was contained in their manuals as required by
law, and although it was an explicit requirement, they simply abandoned it. The
decision to ignore the rule was taken at the highest corporate level. To
abandon this requirement and to substitute x-ray procedures was a clear indication
that Pan Am’s motivations were profit and cost-cutting. As a result,
Pan Am exposed its passengers to risk by being unable to detect unaccompanied
bags. The Lockerbie disaster would have been avoided had the FAA requirements
had been followed.
Pan Am also had another question to answer. In April 1988, the FAA
warned all international airlines of intelligence reports of threats by Iran
against United States targets. On November 18, 1988, Pan Am was advised
by an FAA Security Bulletin that a Middle Eastern terrorist group had been
found in Germany with a bomb concealed within a Toshiba radio. The alert
called upon Pan Am and other airlines to activate extra vigilance and a rigorous
adherence to their regulations for baggage reconciliation. Pan Am and
others were warned of the difficulty of relying on x-rays which would not detect
such bombs. Despite this explicit warning, Pan Am did not positively
match interline bags, even worse, the ALERT security staff in Frankfurt was
not made aware of this warning. Not even the personnel using the x-ray
equipment were told of this warning. They did not know, and were unaware
of what to look for.
On December 7, 1988, only two weeks before the Lockerbie disaster, Pan Am was
issued a Security Bulletin advising that the United States Embassy in Helsinki,
Finland received a warning that a Pan Am flight from Frankfurt to the United
States would be the target of a bomb. The notice became known as the “Helsinki
Warning.” It referred to and reiterated the FAA’s earlier warning
of a Toshiba radio bomb and again emphasized the difficulty of detection by
x-ray. Once again the security personnel at Frankfurt, including ALERT’s
chief of training, were not informed of the bulletin. Pan Am not only
failed to increase security staff, they failed to alert the on duty security
staff to the warnings. When he eventually received the Helsinki Warning,
the manager at Frankfurt attempted to back date it and to suggest that he had
disseminated it. He had not. His statement demonstrated blatant
dishonesty.
The inquiry revealed much more both in substance and in detail, but I am sure
having heard the story, it will come as no surprise to you that on July 10,
1992, the New York jury concluded that Pan Am and ALERT were guilty of willful
misconduct. The fight goes on now for damages, Pan Am having unsuccessfully
tried every avenue of Appeal against the jury’s verdict. David has
held his own against Goliath.
For the American legal system, it is a triumph in serving the interests of
the individual over the might of the corporation and the giants of the insurance
world. The attorney has excelled in his role as equalizer and champion. The
judicial system has worked. The combination of jury trial and contingency
fees has made it possible for litigation to be pursued in the most suitable
forum, doing justice to those who deserve it.
As a footnote, once the picture of the incompetence, deceit, dishonesty, and
risk-taking emerged from the Fatal Accident Inquiry, it became clear that the
insurance industry should rigorously re-examine security practices at airports
as executed by airlines.
The economic imperative is very simple. The insurance industry probably
realized during the course of the Fatal Accident Inquiry that Pan Am’s
chances of winning the litigation were declining by the day and the prospects
for lifting of the Warsaw Convention limits were increasing. A huge pay-out
was becoming a certainty. To ensure that another such pay-out would
not occur, the insurance industry must make sure security practices were adopted
which would prevent unaccompanied interline bags from getting on board planes
which they insured. It was the insurance industry and not the government
that pushed for improvements. The insurance industry ultimately has the
power to compel the passage of and compliance with these safety measures. The
threat of large damage awards made these efforts imperative.
Those who seek to attack the American system do so in part because of large
damage awards. In all of the arguments made to date, little has been
said concerning the benefits that flow from such awards. The contingency
fee system is criticized for making lawyers rich. Little is said of the
huge risk which lawyers take in becoming involved in such cases. It was
the contingency fee system which made available to the families affected by
the Lockerbie air disaster a team of world-class attorneys able, and the resources
necessary, to take on the might of Pan Am’s top-class, blue-chip team. Would
it be right that Pan Am and the insurers could bring together the very best
teams of attorneys to represent their interests while those who find themselves
facing tragedy through no fault of their own are to be denied representation
at the same level? Without jury awards and contingency fees, and both are essential,
it is doubtful whether the result so far achieved would have been realized. It
would not have been achieved in Piper Alpha. I am aware of the proposed
legislative changes seeking to interfere, control, and restrict the system. My
advice would be, “Don’t fix what is not broken.”
Related: Original On-line Publication (ILSA Journal of International & Comparative Law).
Prepared by Peter Watson
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