Good morning to all.
I was invited to appear, but not told why. I will therefore be perceptive. Given that I am a specialist in liability, insurance and assessment of damages, I suppose I am here to speak about compensation rather than prevention.
Since this morning, we have heard a great deal about safety and prevention. Those are extremely important and must be seen to. That being said, we will never be able to reduce the risk of railway accidents to zero, anymore than we can with highway accidents or airline accidents. We must therefore consider, following the Lac-Mégantic disaster, creating a better compensation system than the one we presently have.
The evidence will no doubt be painful for the families of the 47 deceased victims. The compensation process will take over a decade and will provide extremely disheartening results. In fact, I predict that whatever compensation is offered to the victims, if there is a commitment with respect to liability, will not amount to anything by the end of the process as there is inadequate insurance coverage.
Let us set out a fundamental rule. So-called adequate insurance coverage is not a panacea. Even if we replaced MMA in the Lac-Mégantic accident by CN or CP, who both have insurance coverage of $1 billion or $1.5 billion depending on the type of disaster, we would still find ourselves with the same problem. The problem is one of liability. Insurance, as the word indicates, is liability insurance.
Therefore, what must be changed and has not changed to this date in terms of railway transportation, are liability rules. Railway transportation is the last major system that has not been updated when it comes to compensation rules. This has now been done in air transportation and of course, in road transportation—which generally comes under provincial jurisdiction—as well as marine transportation. Railway transportation is the only area in which this has not yet been done. It took a disaster of the magnitude of Lac-Mégantic to awaken people's minds to this issue.
I prepared a page and a half summary for you which I translated myself. I take responsibility for any errors it contains. The proposals in the summary could be implemented fairly easily.
There are all kinds of possible solutions. We could introduce, as they have in some Australian states, an automatic compensation system for railway accident victims. This would require changing certain structures. I could discuss this further with you if you wish, but I would like to be more pragmatic and as efficient as possible. Under the current structure, it is possible to improve the compensation system for victims of railway accidents fairly easily by using rules that have been in place since 2003 in air transportation.
I say this would be fairly easy to implement, since the Canadian Transportation Agency, which is responsible for railway transportation, also supervises air transportation. The same organization would therefore be responsible for supervising these new compensation rules, which it already knows quite well.
How would this work? Essentially, in air transportation, we had the Montreal Convention. It was signed in 1999 and implemented in 2003. Over 100 countries signed the convention, including the United States and Canada, obviously. That convention stipulates a two-stage liability regime for the carrier. As you will see, it is easy to draw parallels with a railway carrier.
First of all, because this is an international convention, we do not speak of dollars, but rather Special Drawing Rights, or SDR. In the Montreal Convention, there is a first level of compensation set at 100,000 SDR, which is equivalent to $175,000 Canadian today. Obviously, this varies from country to country.
In this first level of compensation, the carrier's liability is automatic. The only way the air carrier can avoid having to pay—or rather having its insurer pay—is to prove that the victim was at fault. If we transpose this to the railway transportation context, we could point to the example of trespassing on railway tracks. In such a case, the carrier would have the right to invoke the trespasser's faulty behaviour and avoid having to compensate anyone following injury or death.
That first level provides quasi-automatic compensation, unless there is evidence that the victim was at fault.
Beyond that first level, the carrier may still be liable, but has more means at its disposal for exoneration. I am talking about what currently happens in the case of air carriers. The carrier may invoke the victim's faulty behaviour and its own lack of faulty behaviour. It may claim to have taken all reasonable measures to avoid the accident or claim that the accident was caused by a third party.
We therefore see that it is still presumably at fault, but not liable. Compensation may still be granted without a ceiling since the Montreal Convention abolished previous ceilings for compensation in the case of airline accidents. Compensation remains possible, but the carrier has more means at its disposal to exonerate itself.
Ladies and gentlemen, this is easily transferable to the railway sector. All that would be necessary would be separating, on one hand, personal injury, cases of bodily harm and fatalities and, on the other hand, property damage. The current problem is that the system deals with personal injury and property damage under the same liability insurance coverage.
This is my deeply held opinion. It seems to me that the motto “people before property” should be applied to our way of viewing compensation issues for victims of accidents. It is all very well to pay for environmental damages and to rebuild destroyed property, but the priority should be first and foremost to compensate people. That is why we must set up a liability insurance regime for railway carriers based on bodily harm to ensure it does not go beyond the limit, so that victims do not end up with nothing. The goal is also drawing attention, above all else, to the victims.
With respect to the terrible accident in Lac-Mégantic, let us imagine the money is found and those responsible identified and that in 15 years, for example, the whole thing is finally settled and victims are compensated. Unfortunately, it would be too late because orphans will have grown up and people will have passed on or moved on to something else. People need the money now, immediately.
You all know the English proverb which goes as follows:
Justice delayed is justice denied.
It applies perfectly to accidents involving bodily harm and fatalities. We must change the system and ensure that attention is given to people first and, afterwards, to property. If we do that, we will realize that not only is it feasible, but it is probably also what costs the least money.
It is terrible to say, but in the case of a disaster like the one in Lac-Mégantic, the worst damage was done to the environment and will probably cost well over half a billion dollars. Then, there is the damage to buildings and vehicles that were located in Lac-Mégantic's downtown core. The last item is compensation for the families of the 47 deceased victims.
As you know, I am a specialist on bodily harm and have made some quick calculations. Even though I am not familiar with the specific circumstances of the 47 victims, I guarantee you that if, tomorrow morning, full reparation was paid out, as happens before the regular courts, and the families of the 47 victims were compensated, it would all add up to less than $25 million. It would probably be less than $15 million. That is a drop in the ocean of costs following an accident like the one in Lac-Mégantic.
I would like to emphasize the economic feasibility of changing such a system. It could be done very quickly. The proof is that with a similar system, things have been working very well for the last 10 years in air transportation. Insurance premiums are predictable, fixed and accepted by insurance companies. Unfortunately, as they say, human life does not have a price, but it does have a cost which in legal terms is limited.
Thank you.
