Compensation concerns MH370 families

Families of the passengers aboard the missing flight MH370 can commence their compensation claims, though the searches for the plane will need longer. [Special coverage]

Concerns for proper compensation has grown since the multinational search for more than 50 days has failed to come up with any results.

"Even though the cause of the tragedy is not yet established and no plane debris has been found, Malaysia has officially announced that the plane crashed in the southern Indian Ocean, and this means families of passengers can start their compensation claims," said Tuo Guozhu of the Capital University of Economics and Business.

"The search for the MH370 flight is facing unprecedented challenges," said Sun Ruishan, a security researcher at the Civil Aviation University of China. Even the sites where searches have been carried out were based on calculations. No one knows exactly where the plane crashed.

"If search forces had found debris and confirmed the plane had crashed, a lot more work still needs to be done and the whole procedure will go rather slowly," Sun said, adding salvage of plane debris may take years.

Chinese insurance companies began paying compensation to the families last month. Tuo believes they will get compensation both from commercial insurance purchased by the passengers and through liability compensation paid by the airline.

China and Malaysia are both members of the Montreal Convention, a universal liability regime for international carriage by air. Under the Convention, a carrier is liable to pay up to 113,000 Special Drawing Rights (around 1.2 million yuan or 195,000 U.S. dollars) for each passenger. Zheng Wei of Peking University added that compensation may break that cap if evidence shows negligence or wrongful acts by the carrier, so Malaysia Airlines may not start a payments now, when the causes to the disappearance remain unclear. Families, he said, could file class action claims rather than claiming individually. Families can negotiate directly with the airline, but if they fail to reach an agreement, the families can resort to legal actions.

Flight MH370 went missing early on March 8 en route from Kuala Lumpur to Beijing.