Australian aviation liability has long had a clean organising principle under the Montreal Convention: international passenger claims turn on the treaty, not on broader domestic negligence concepts. That certainty is now being tested - by turbulence headlines, claimant momentum overseas and a live question for underwriters and brokers: what happens if “pure” PTSD becomes recoverable even where there is no physical harm?
“At the moment, however, the Australian position is relatively clear: without bodily injury, a pure PTSD or psychological injury claim is not recoverable under the Montreal Convention as applied here,” said Kennedys partner Peter Craney (pictured).
That position tracks the convention’s text. Article 17(1) imposes carrier liability for “death or bodily injury” caused by an “accident” on board or during embarking/disembarking. Even where a claimant has a compelling narrative, the Montreal Convention’s architecture is deliberately trade-off driven - strict liability within defined limits in exchange for predictability. Australia implements the 1999 Montreal Convention through the Civil Aviation (Carriers’ Liability) Act 1959 (Cth), which gives the convention “the force of law” in Australia.
The case often cited for the current boundary is Pel-Air Aviation Pty Ltd v Casey (NSWCA, 2017), where the Court of Appeal rejected an attempt to characterise PTSD itself as “bodily injury” absent proof of physical damage. In other words, Australian law has been reluctant to let psychiatric harm slip through the treaty doorway by arguing that all severe mental injury has a physical substrate.
But the international picture is no longer “background noise”.
“There is some international jurisprudence and many vocal claimant lawyers pushing toward recognition of pure psychiatric injuries,” said Craney.
Events that previously looked like manageable “single-incident” exposures could become something else entirely if psychological injury is treated as compensable in its own right.
“Light or moderate turbulence events, engine failure and evacuation, ditching, or near misses, if such incidents otherwise give rise to an ‘accident’ under the Convention, are a useful illustration of the potential exposure,” said Craney.
The claim expansion logic is straightforward. In many turbulence events, the number of passengers with demonstrable bodily injury may be limited - often correlated with seatbelt compliance and cabin-service timing. But the psychological footprint can be far wider, particularly where passengers experience violent vertical acceleration, falling objects, visible injuries to others, emergency descents, diversions, or evacuations.
The Singapore Airlines SQ321 incident remains the most instructive modern example because it combined intense media scrutiny with clear investigation data. Singapore’s Transport Safety Investigation Bureau (TSIB) preliminary findings described rapid changes in vertical acceleration over roughly 4.6 seconds and an associated altitude drop of 178 feet, with injuries linked to occupants becoming airborne and falling. As of May 2025, reporting citing Singapore’s transport ministry indicated the SQ321 investigations were still not complete and that a final report would follow once completed.
Now overlay the Montreal Convention’s hard stop on timing: Article 35 extinguishes the right to damages if an action is not brought within two years (generally from arrival, expected arrival, or cessation of carriage). With SQ321 occurring on 21 May 2024, that deadline lands in May 2026 - meaning the coming months are an obvious window for proceedings to be filed that could become a testbed.
Craney’s warning about scaling could be the core insurance point: “That represents a very substantial increase in potential claims arising from relatively contained physical incidents.”
The most consequential overseas development is not speculative. In 2022, the Court of Justice of the European Union, in BT v Laudamotion (C‑111/21), held that Article 17(1) must be interpreted so that a psychological injury caused by an “accident”, even if not linked to bodily injury, must be compensated in the same way - provided the passenger proves a sufficiently serious adverse effect on psychological integrity affecting general health and not resolvable without medical treatment.
That approach could matter for Australian insurers and brokers even if Australian courts do not adopt it tomorrow. First, it gives claimant firms a sophisticated roadmap: plead severity thresholds, rely on medical reports and treatment evidence, and argue that the treaty’s consumer-protection purpose supports recovery for clinically significant PTSD. Second, it widens the “forum pressure” around international carriage - particularly where parts of a journey, contracting, or proceedings touch Europe.
If Australian courts were ever to accept a similar reading, the underwriting implications are immediate.
“If pure psychological injury is held to be compensable under the Convention, liability insurers would need to consider whether they will cover such claims at all,” said Craney.
Even where cover remains available, wordings, aggregates and retentions would come under strain. A turbulence event that once looked like a handful of bodily injury claims could morph into a multi-claimant psychiatric portfolio problem — harder to triage, slower to settle, and more vulnerable to “social proof” effects as passengers compare experiences and symptoms post-incident. For brokers, the pressure point is the mismatch between legacy policy assumptions (tethered to what is recoverable under the convention) and a moving definition of recoverable harm.
For insurers, an important question is not just whether PTSD claims become technically compensable but whether the industry can stomach the resulting claimant pool expansion without re-pricing, re-aggregating and re-writing.
