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Swissair agrees to payments
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August 5, 1999: 6:22 p.m. ET
Airline agrees to pay 'proven' damages to families of victims on ill-fated Flight 111
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NEW YORK (CNNfn) - In a surprise move designed to mitigate a possible half-billion dollar payout, Swissair agreed Thursday to accept financial responsibility for the victims who perished last year in a crash over Nova Scotia.
While not admitting guilt in the case, Swissair said it is prepared to pay compensatory damages to the 214 passengers and 15 crew members on board the plane last August. Boeing, Swissair's co-defendant in the cases, has agreed to split the settlements.
Swissair parent company "Sairgroup and Boeing will jointly accept financial responsibility for the total amount of proven damages," Urs Peter Naef, a Swissair spokesman, said after the hearing. "Our main interest is we want to assure the victims' family members that they will be compensated for the damages of the crash."
Attorneys for the Zurich, Switzerland-based airline made the offer to dozens of lawyers representing the families suing the airline at a procedural hearing in U.S. District Court in Philadelphia.
A total of 167 families have joined 42 separate lawsuits against Swissair related to the crash of Flight 111 en route to Geneva from New York.
The claims from those lawsuits total roughly $16 billion, but Lee Kreindler, lead counsel for the plaintiffs, said based on other cases of this kind, the ultimate settlement would more likely be in the half-billion dollar range.
However, that total could change substantially depending on how U.S. District Judge James Giles rules on a Swissair motion made Thursday to transfer about 120 of the cases to either France or Switzerland from the United States, since many of the victims were not U.S. citizens.
The ruling on that motion is critical because cases brought in U.S. courts tend to result in much higher financial settlements. Kreindler said the plaintiffs will resist that motion.
Still, Kreindler praised the company for admitting liability in the case, an admission that will likely accelerate the resolution of the cases by two years or more.
"It's a pretty big deal," Kreindler said. "How it will ultimately play out, I don't know."
Investigators have never officially determined why the MD-11 plane carrying 229 people went down over Nova Scotia. However, an attendant aboard the same plane's flight to Hong Kong from Zurich on Aug. 10 reported smelling "a strange, pungent odor" that was reported to the airline.
During the ill-fated flight to Geneva, the pilot reported smoke in the cockpit shortly before the plane went down. Canadian investigators later recovered wiring from the plane that revealed signs of heat stress.
Judge Giles ordered the two parties to begin settlement negotiations and reconvene again in Philadelphia on Sept. 13 to report their progress.
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