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CANADIAN AVIATION SAFETY SEMINAR

VIEWS: 8 PAGES: 15

									              CASS 2005 17th ANNUAL

      CANADIAN AVIATION SAFETY SEMINAR
                      April 18-20, 2005
                The Fairmont Hotel Vancouver
                 Vancouver, British Columbia



                       PRESENTATION:

 The Principle of “Foreseeability” and Why a Safety
Management System (SMS) is Important from a Legal
                     Perspective

                               DATE:
                            April 19, 2005


                               TIME:
                             10:15 A.M.



                           SPEAKER:
           CAPTAIN ROBERT J. FENN, B.A. (Bus. Adm.), LL.B., C.D.
                         ROHMER & FENN
                        Barristers & Solicitors
                         15 Wertheim Court
                              Suite 503
                       Richmond Hill, Ontario
                     (Toronto) Canada L4B 3H7
                                           TABLE OF CONTENTS

INTRODUCTION ...................................................................................................................... 1
AVIATION LAW IN CANADA................................................................................................ 1
  Statutes .................................................................................................................................... 1
  Canadian Aviation Regulations .............................................................................................. 2
ROLE OF MINISTER OF TRANSPORT .................................................................................. 3
DUTIES AND OBLIGATIONS OF AN AIR OPERATOR/AME/AMO, ETC. ....................... 3
LAW ........................................................................................................................................... 4
SOLE RESPONSIBILITY OF THE PILOT .............................................................................. 4
SAFETY MANAGEMENT SYSTEM ....................................................................................... 5
SMS CONSIDERATIONS ......................................................................................................... 6
TRANSPORT CANADA MANDATED AVIATION POSITIONS ......................................... 6
ACCIDENT PREVENTION ...................................................................................................... 7
TRANSPORT CANADA ENFORCEMENT............................................................................. 8
INSURANCE CONSIDERATIONS ........................................................................................ 10
CONCEPT OF FORESEEABILITY ........................................................................................ 11
CONCLUSION ......................................................................................................................... 12
INTRODUCTION
Over the years, aviation law has developed from rather simple rules, regulations and procedures
(in the Wright Brothers’ days) to a rather complex set of rules, regulations and procedures which
are proffered by the Minister of Transport (“Transport Canada”) and the Federal Aviation
Administration. Whether you own a company, fly an aircraft or maintain an aircraft or whether
you are involved in aviation on a commercial basis or as a private user, you have an obligation to
ensure that your activities and your actions are not negligent or contrary to the Regulations,
standards or procedures. In law, this is known as “duty of care”. When an accident happens,
questions will be asked during the course of an investigation. The specific questions will be
“hard questions” respecting any acts or omissions by the air operator, the nature of the duty to
the public that exists and about whether there was a breach of duty by you or your employees,
servants or agents and whether someone suffered a loss that was foreseeable.

A duty of care arises by regulation or by contract. In interpreting the duty of care, it is necessary
to review and consider the standard of care that arises by statute, regulations or by custom.

Transport Canada recommends a safety management system.                  In law, this is akin to
“foreseeability”. A safety management system sets out a clear safety policy and implements a
system for identifying safety hazards and managing risks. This system will “go a long way” to
help you and your organization foresee situations that can or will lead to an incident or accident,
which could result or end up in claims worth many thousands, if not millions, of dollars. In law,
it all comes down to your duties, your obligations and your responsibilities to members of the
aviation community and the traveling public.

This presentation explores the concept of negligence, duty of care, both by regulation and
contract, standard of care, foreseeability, insurance considerations, risk assessment and the
advantages of a full, complete and proper safety management system.

AVIATION LAW IN CANADA

Statutes
Aviation in Canada is a federal undertaking. Consequently, the Federal statutes represent the
major source for aviation law. The primary statute is the Aeronautics Act. The Canadian
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                            Page 2


Aviation Regulations (CARs) are promulgated under the Aeronautics Act. In addition to the
Aeronautics Act, aviation is affected to a significant extent by other statutes such as the Criminal
Code of Canada and the Canadian Transportation Accident Investigation Safety Board Act,
which act has replaced the Transportation Safety Board Act.               For the purposes of this
presentation, we will continue to refer to the Transportation Safety Board as the “TSB”, who is
responsible for accident investigation in Canada.

In addition to statute law, the civil law also sets out the duties, obligations and liabilities of
various aviation personnel and employees.

Within the CARs, the Commercial Air Services Standards set out the standards and requirements
for companies providing aviation services to the general public. The CARs also control and
provide guidance for, among other things, commercial air carrier operations, AMO’s, Flight
Training Units and all types of specialty operations.

Canadian Aviation Regulations
The CARs are divided into eight parts. Each part has different requirements and provides
guidance (or duties) on a specific area. All aviation personnel should (or must) be familiar with
each of the parts. Specifically, Part VI sets out the general operating and flight rules by which
we all must operate under from an operational perspective.               Additionally, maintenance
organizations (AMO) relate to the airworthiness of aircraft or an aeronautical product, which are
contained, in part, under Part V.

The CARs are being amended to set out the requirements and regulations for a Safety
Management System (“SMS”). The general requirements of a SMS will be found in Part I.
Airport operators will find the SMS regulations applicable to their operations in Part III. Part IV
will affect the operator’s of flight training units. Flight Training units include both flying
training units and other units that train personnel in the aviation industry.

Maintenance organizations will find their SMS requirements and regulations in Part V, while
private aircraft operators will obtain their SMS requirements and regulations in Part VI.

All commercial operators are controlled by Part VII and the Air Navigation Services are
controlled by Part VIII.
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                             Page 3


ROLE OF MINISTER OF TRANSPORT
The Minister of Transport is responsible to supervise all matters concerning aeronautics in and
throughout Canada. This includes the development and regulations of aeronautics and the
licensing of aeronautics in Canada. In addition to the regulations, the Minister of Transport is
also responsible for certain of the construction, maintenance and operation of aeronautical
facilities, although more and more of these responsibilities have been delegated to other
organizations, such as NAV CANADA and specific local airport authorities. It is important to
note Transport Canada (the Minister) remains ultimately responsible in law regarding ATC and
airport operations, as the regulator.

In a safety management system environment, Transport Canada will regulate and audit the safety
management system, but if the system is properly established, Transport Canada will be relieved
from many of their historic monitoring responsibilities with respect to air operators.

Transport Canada will also develop procedures for operators to develop their own safety
management systems.            Once effective safety management systems are in place, Transport
Canada will be able to reduce the frequency and number of air carrier audits and other audits of
commercial operators, although Transport Canada will still carry out “spot audits”. They will
also provide the licensing standards and proficiency standards required for pilots and other
holders of aviation documents.

DUTIES AND OBLIGATIONS OF AN AIR OPERATOR/AME/AMO, ETC.
As you are all aware, all aircraft operators are responsible for the safe carriage of their
passengers. They are also responsible to ensure that the crew members and other aviation
personnel are able to operate safely. In addition to the passengers and others, aircraft operators
are also responsible for ensuring that any cargo assigned to the operator is transported safely and
on time. Furthermore, air operators are liable to third parties as a result of accidents or incidents
and of course, to employees through either a Worker’s Compensation Legislation or a similar
health and safety program. Generally, this is referred, from a big picture perspective, to those
persons or companies to whom you are either directly or indirectly responsible, as an air
operator, pilot, AME, AMO, or other service provider. This responsibility is shared by others
and is sometimes referred to as concurrent responsibility. By recognizing and understanding the
concurrent responsibility of others, it will enable an air operator and its employees to review the
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                                Page 4


various aspects of that concurrent responsibility in order to ensure that all risks have been
reduced. Concurrent responsibility is typically shared by pilots, engineers, AMO, local airport
authorities, air traffic control, the aircraft manufacturer or component manufacturer or
overhauler, the Government, service companies and various aviation personnel who perform
aviation services.

We have now seen to whom we are responsible and who shares in that responsibility. This acts
as a good “check and balance” for the purposes of ensuring that your operation has assessed and
considered the appropriate “risk” and that steps have been taken to minimize those risks as much
as possible.

LAW
The Court must consider, and in fact decide, the applicable duty of care. The duty of care is the
legal “standard of conduct” that a Court will consider in determining whether a specific
individual or entity was negligent or whether there was a breach of that duty to the traveling
public (i.e., the paying passenger). The test that the Court will consider is whether the standard
of conduct was “reasonable” in the circumstances. This standard applies to all phases of
operation including pre-flight planning, pre-flight inspections, aircraft maintenance, in-flight
operations and procedures and post-flight responsibilities.

As an incentive, it is important to note that an employer (i.e., the airline) is responsible for the
actions or omissions of its employees (i.e., pilot, flight attendant, AME, etc.) Essentially, this
confirms that there is a mutual benefit and, indeed, a joint responsibility to ensure that the
employer and employee (or in other words, the airline and its operating personnel) operate
jointly in order to ensure that the air carrier operates a safe and reliable air carrier in accordance
with the Aeronautics Act and all rules and regulations relating thereto.

SOLE RESPONSIBILITY OF THE PILOT
It is trite law to say that the pilot is ultimately responsible for the safe operation of an aircraft.
This has been codified by specific regulatory authority. Some operators correctly adopt a
position that the captain of the aircraft is “the last line of defence”. If the captain is not satisfied
with the safety of the operation, he or she should “set the parking brake”. This applies when the
aircraft is on the ground or, indeed, when the aircraft is in the air. When safety is in doubt when
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                             Page 5


in-flight, the captain should land the aircraft, set the parking brake and satisfy himself or herself
with respect to the safety of the operation. Safety is paramount and the air carrier and all
operating personnel, including pilots, AME’s, flight dispatchers, load dispatchers, etc. all operate
as a “safety team” in an established system in order to ensure a safe operation. In essence, this is
the crux of a “SMS”. A SMS will assist in delineating an air operator’s duties, obligations and
standard of care that is expected of the air operator and all operating personnel.

***Remember! “It is better to be on the ground wishing you were flying, then to be flying
wishing you were on the ground.”

SAFETY MANAGEMENT SYSTEM
SMS requires personnel and facilities within an organization to work together to support a safe
and effective operation. The system is designed to change known factors into desired results.
The SMS takes these “known factors” or inputs and re-establishes priorities to bring about a
desired result.      The system is designed to learn from past mistakes by using a feedback
mechanism to transform these known factors into desired results.

There is an inherent risk logic in aviation. Every aviation operation has some risks. Most risks
are readily identifiable, while other risks cannot be specifically identified or quantified with
certainty. Also, not all risks are of an equal magnitude and the effects of known risks are not
equally consequential. The role of management in the SMS is to balance the known or foreseen
risk with the benefit of a particular operation. This is similar to the “legal process” and the
general principles of law. In any aviation endeavor, the resources for identifying, eliminating
and controlling risks are limited. If senior management is not in the SMS loop, resources may
not be properly allocated, as many resources are scarce. The management team must ensure the
elimination of all serious risks. However, risk cannot be totally eradicated in aviation but the
proper management of risk can and will minimize personal and financial losses to the
corporation, passengers and others.

It is suggest that any safety or risk management system will be information driven. The SMS
requires the collection and dissemination of safety related information and data to address safety
issues. However, there are other considerations with respect to the use of information gather by
the SMS. The use of information gathered under the rubric of a SMS, if not properly regulated
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                              Page 6


and controlled, will lead to a degradation of the SMS effectiveness. Consequently, the proper
use of an SMS, by necessity, includes a review of your legal duties and obligations, the duty of
care that you owe to passengers and others and the risk assessment and elimination of those risks
for the purposes of ensuring that all your operating personnel clearly understands their legal
duties and obligations to the traveling public. A SMS will assist in your operation in complying
with its legal duty to Transport Canada and the traveling public.

SMS CONSIDERATIONS
As indicated above, a SMS is information driven and requires the collection and dissemination of
safety information and data to address safety issues. Considerations on the use or abuse of the
information include, but are not limited to, the real likelihood of resulting litigation in the event
that the air operator or any of its employees, servants or agents are negligent. If a specific risk is
assessed and considered and the air operator continues to willfully accept an unreasonable risk
which the air operator knew or ought to have known could result in harm, it is arguable in law
that a plaintiff could assert that the conduct of the air operator or its employees, servants and/or
agents is willful conduct such that it results in a total and complete disregard for the rights of the
passengers. In that event, a Court could award punitive, exemplary or aggravated damages.
Punitive damages are intended to punish the tort feasor for willingly exposing a passenger to an
“unwanted” risk which will likely result in serious injuries, losses or damages. Particularly, U.S.
jurisdictions are quite receptive towards punitive damages in certain cases.

Other considerations, which typically should act as an incentive, would include active
enforcement action, aviation enforcement discipline and a document holder suspension and of
course, decrease in competitive advantage. Furthermore, the Courts in recent years have also
been investigating the possibility of a criminal investigation in certain circumstances.

It is submitted that the above should act as an “incentive” to establish an effective SMS, as it will
assist in ensuring that your company and all operating personnel operate as safely as possible and
in accordance the Aeronautics Act and the Canadian Aviation Regulations and Standards.

TRANSPORT CANADA MANDATED AVIATION POSITIONS
Transport Canada has mandated certain positions and documents to enhance the overall control
and effectiveness of senior management. This includes the designation of personnel to fill
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                               Page 7


certain key positions such as: a chief pilot and operations manager and the establishment of
programs and documents to monitor and control operations.

The Operations Manual is often referred to as the Company “bible” respecting the operating arm
of the operation. Typically, the Operations Manual would be modified or amended to include
SMS information and procedures. It is advantageous for all air carriers and operating personnel
to clearly understand that the purpose of the Operations Manual is to outline established standard
operating procedures for the specific operation. Transport Canada has issued an Air Operator’s
Certificate (“AOC”) to a specific air operator. In order to obtain the AOC there is a requirement
that the air operator submit an Operations Manual which must be approved by Transport Canada.
While there is a temptation to sometimes deviate from the Operations Manual, it is important that
all operating personnel understand that, from a legal perspective, those procedures form part of
the regulatory process and must be followed.                    Any amendment to those procedures (any
amendments to the Operations Manual) must be approved by Transport Canada.

It is submitted that the use of mandated positions and documents assist the carrier in complying
with the Aeronautics Act, the Canadian Aviation Regulations and the Canadian Aviation
Standards. Similarly, the SMS is, we suggest, a further system which will assist the air operator
in complying with its legal duties.

ACCIDENT PREVENTION
The management of risk and accident prevention can pay important dividends to an operation in
lower costs, improved employee moral and improved productivity. A SMS does not replace the
older “Safety Officer Positions”, but rather the SMS ensures that senior management is “in the
loop” in order to provide the necessary resources to prevent or reduce accidents/incidents.
However, even in the best of managed systems, accidents can occur, as the Swiss Cheese model
suggested by James Reason demonstrates.

Although the SMS should reduce the severity and number of accidents, when an accident does
occur pilots and operators must be aware of their duties and responsibilities. A valid and
effective investigation will identify shortcomings to prevent a re-occurrence. A proper accident
response plan will limit the loss of productivity, as company personnel respond to requests from
investigators for inputs.
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                               Page 8


In addition to the direct financial costs of an accident there are other less obvious but equally
important cost aspects of an accident. The costs of an accident include, but are not limited to,
loss of revenue, loss of productivity, loss of business, decrease in employee morale, decrease or
loss of public confidence in the air operator, increased audits, increased insurance costs and
ultimately could result in the total demise of the company. We are all aware of several examples
where that has occurred. In addition, one of the major fallouts of an accident or a major incident
is the inevitability of legal actions (i.e., civil suits) by the victims of the accident or incident as
well as the possibility of enforcement action and/or criminal investigation.

In summary, accident prevention and risk assessment and proper management is the key to
success. An air operator or the operating personnel will not remain in existence to make “all the
mistakes themselves”. The use of the Operations Manual, the SMS and other safety related
systems, are all designed to assess and determine the risk, to manage the risk and to operate the
air carrier with utmost safety. Remember, safety is paramount! From a prevention perspective,
the SMS will assist in ensuring that all aviation personnel within your organization recognize
several factors, including the fact that the captain of the aircraft is the “last line of defence” from
an operational perspective, the chief pilot and Operations Manual constitutes the “last line of
defence” from a general operational perspective and the chief engineer should look at his role as
the “last line of defence” from a maintenance perspective.            All of these positions and/or
individuals are generally mandatory positions which serve as a “team” in order to ensure that
your operation is safe. Remember, accidents cost money and all reasonable steps must be taken
to avoid an accident. Serious accidents will, in all probability, result in substantial direct or
indirect costs to the airline, will result in decrease employee morale, decrease in reputation and
loss of business, etc. It must be remembered that “an ounce of prevention is worth a pound of
cure”.

TRANSPORT CANADA ENFORCEMENT
As everyone is aware, the Minister of Transport has an obligation under the Aeronautics Act to
regulate and control the development of aeronautics in and throughout Canada. This includes the
enforcement process. Transport Canada has developed a regulatory compliance system which is
responsible for ensuring compliance with the applicable regulations.
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                           Page 9


Aviation enforcement typically occurs by way of administrative action (sanctions). Essentially,
this means that Transport Canada investigates a particular allegation and imposes the appropriate
sanction in accordance with the Transport Canada guidelines. Transport Canada is authorized to
suspend or cancel an aviation document in certain circumstances, particularly where safety is an
issue.

Typical enforcement action would include several designated provisions. Certain provisions are
designated under the Act which are sometimes called “ticketing offences”. Typically, this would
include potential violations of unsecured cargo, C. of A. not in full force and effect, failure to
familiarize yourself with all available information, failure to familiarize yourself with all
available weather information, noise violations, low flying, landing or departing during silent
hours or landing and departing below minimums.

Aviation can also be enforced by way of the Court system. This would include summary
conviction offences (less serious offences) and indictable offences (more serious offences). The
enforcement of aeronautics by way of the Court system is the responsibility of the police.

During the enforcement process, if Transport Canada is satisfied that a violation has taken place,
the Minister may issue a Notice of Assessment of monetary penalty. The assessment must be
paid within a specific period of time and the document holder has a specified time frame in
which to appeal. If the document holder is not satisfied with the Minister’s determination, the
document holder may appeal to the Transportation Appeals Tribunal of Canada. On appeal, the
Tribunal (“TATC”) sets the matter down for hearing before a single member. The single
member will render a decision. If the document holder or Transport Canada is not satisfied with
the decision, there is a right of appeal to a three-member panel.

Historically, it was unusual for the police to become involved in an aircraft accident
investigation.      This would only occur in situations involving possible criminal activity.
However, the role of the police in more recent years has increased substantially. The police have
now adopted an active role in some investigations. For example, most recently the police
investigated the possibility of charges against an operator and pilot arising from a serious
accident which include fatal and non-fatal injuries. As a result of the investigation, the police
have laid several charges including criminal negligence causing death, criminal negligence
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                           Page 10


causing bodily harm and dangerous operation of an aircraft. Additionally, the FBI were involved
in investigating an accident in California. Although no charges were formally laid in that case, it
is clear that the Federal authorities are becoming more involved in major air disaster cases for the
purposes of assessing and determining whether there is any criminal responsibility.

It is submitted that the above should serve as an “excellent motivating factor”. The above
clearly indicates that “an ounce of prevention is worth a pound of cure”. It is suggested that a
SMS will serve to assist in that regard.

INSURANCE CONSIDERATIONS
Years ago, it was not uncommon for an air operator to balance the risks versus the premium for
the purposes of a particular operation. In law, you are required to maintain the applicable policy
of insurance in full and force and effect for your commercial operation.

As you may know, a policy of insurance is a contract. Essentially, it is a contract whereby the
insurance company, who spreads the risk among many policyholders, accepts the risk of an
accident under certain terms and conditions. These terms and conditions are often referred to as
terms, conditions and exclusions contained in and forming part of a particular policy of
insurance. In other words, the insurance company has agreed to accept the risk of an accident
and all damages flowing therefrom, as provided by the policy of insurance, in exchange for the
payment of a premium. The premium is based on risk. The greater the risk, the higher the
premium. As everyone is aware, insurance premiums have been “up and down” and particularly
high after 9/11.

It is submitted that it is no longer appropriate to treat an insurance policy as a “license to do
business”. In other words, it is no longer wise or acceptable to say: “oh well, if I am in an
accident, the insurance company will pay”. Today, insurance premiums form a substantial part
or percentage of the expenses for a commercial operation. It is to your advantage to establish an
appropriate safety management system, safety monitoring system and satisfactory standard
operating procedures in order to ensure that your operation is safe.

In summary, an air carrier must have the appropriate insurance. It is necessary and mandated by
law. Remember, the greater the risk, the higher the insurance premium. It is your role as an air
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                            Page 11


carrier, and we submit that one of the purposes of a SMS is to identify the specific risk, take the
appropriate steps to minimize those risks and to establish a system which will allow everyone
within the air carrier operation to function safely and in accordance with the applicable
regulations and standards.

For those air carriers that have a bad accident or safety record, this will mean higher insurance
costs. Eventually, if the air carrier has a terrible safety record whereby the losses exceed the paid
premiums, the air carrier will pay substantial insurance premiums or, even worse, the air operator
may not be able to obtain insurance at all or, alternatively, an air operator with a bad accident
record, will have to place the insurance through a special “high risk” market. As a responsible
person with an air carrier, it is your duty and obligation to maintain a safe operation, to have an
appropriate safety program and safety management system in place; all of which will result in a
better and more profitable air carrier. As stated above, the financial and business consequences
of an accident can be fatal to your company.

CONCEPT OF FORESEEABILITY
We have highlighted the duties and responsibilities of the commercial air carrier and its
operating personnel. That duty of care includes acting “reasonable” or “reasonably”. The
Minister of Transport, through Transport Canada, has adopted specific rules, regulations and
standards in order to ensure compliance with the Aeronautics Act. The Minister is legally bound
and obligated to control and regulate the development of aeronautics in and throughout Canada.
Your obligation, as a commercial carrier, is to comply with the expected “duty of care” and to
operate reasonably. That duty of care includes ensuring that the air carrier and all operating
personnel are familiar with all the applicable regulations and documents, including the Canadian
Aviation Regulations, the standards, your particular Operations Manual, Maintenance Control
Manual and other documents which have been promulgated for the purposes of ensuring
compliance with the Aeronautics Act and Regulations.              These regulatory standards are
tantamount to specific obligations. In other words, ignorance of the law is no excuse. Your
duties and obligations and resulting consequences are all foreseeable. Again, in the event of an
accident, the cost of an accident could be fatal to your organization. Safety is paramount and it is
submitted that an appropriate SMS will assist in that regard. Furthermore, it will also assist in
improving the reputation of your operation.
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                              Page 12


There are three salient considerations about SMS that deserve discussion.

The first consideration is that a SMS could potentially increase the appearance of negligence
since it gathers more safety and risk data allowing for increased foreseeability regarding the
existence or re-occurrence of a risk. Most mistakes do not, in themselves, create accidents.
Mistakes re-occur until the other gaps in defences, barriers and safeguards line up to allow the
mistake to precipitate an accident.              This is the practical application of Reason’s model.
Therefore, the more safety data you collect the more you know, the more the risk is foreseeable.
However, this is appropriate and justified in the circumstances.

The second consideration is that the current statutory and regulatory regime does not protect the
SMS data and reports from the discovery process. Just as Transport Canada will audit your SMS
to determine its capability, there is the potential, through the litigation discovery process, to
“fish” for patterns of occurrences regarding problems or mistakes.                 The legal test is
“reasonableness”. It is the view of the writer that the implementation of SMS satisfies the
“reasonableness test” and, therefore, satisfies your “Duty of Care”.

The third consideration relates to your insurance coverage. In the future, the insurance broker
and insurers will, in all probability, want to review your SMS data to determine the risks
associated with your operation. It is submitted that this may have, and probably will have, a
direct impact on your insurance premium. Thus, a reasonable and “well thought out SMS” will
serve to reduce your insurance costs.

In spite of the previous considerations, it is arguable that the current state of the art requires a
functioning SMS. The risks associated with not having a SMS are now foreseeable and must be
dealt with on a reasonable basis, as it will be considered to be your duty of care which is
mandated by the regulations.

CONCLUSION
In conclusion, we have reviewed the applicable legislation as well as the role of the Minister of
Transport. The Minister of Transport, through Transport Canada, imposes very high obligations
on commercial air carriers.            Air carriers are subject to significant licensing, auditing and
monitoring requirements and standards which are designed to result in a safe operation. An
The Principle of “Foreseeability” and Why a Safety Management
System (SMS) is Important from a Legal Perspective                                          Page 13


understanding of aviation and the duties, obligations and regulations for commercial air carriers
is mandatory. Transport Canada has been extremely active in that regard, as demonstrated by the
required documents, required manuals and the mandated positions.

We have also highlighted the liabilities of an air operator, pilots, AMO and other specialty
operations. It has been highlighted that the key role is accident prevention and that the SMS will
assist in that regard. We have reviewed the cost of an accident and we have seen that accidents
cost many millions of dollars, result in loss of revenues, loss of profits, increased audits and
could lead to the eventual demise of your company. We have all seen many examples!

We have highlighted that aviation safety is paramount. It is submitted that a SMS system will
assist all commercial carriers and all operating personnel to recognize known factors and risks, to
readily identify those risks for the purposes of balancing the known and foreseen risk with the
ultimate benefit that your air carrier will comply with its duties and obligations to the traveling
public.

								
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