Liability for Homebuilt Aircraft

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While homebuilt aircraft have been the fastest-growing segment of aviation during the 1980s and 1990s, some predict that homebuilt aircraft liability litigation will be a growth industry of the next decade. Accidents like the 1997 Long-EZ crash that killed John Denver raise thorny questions about who's legally liable: the kit manufacturer, amateur builder, or pilot? Can a kit manufacturer or amateur builder escape liability by means of a waiver or disclaimer? Is a homebuilt covered by the GARA 18-year statute of repose? AVweb's aviation law editor Phil Kolczynski sorts through this thicket and offers some concrete suggestions.

Av LawDo you have a dream?

Do you:

  • Fantasize about an aircraft made of ultramodern composite materials that looks like something out of a futuristic movie and is compact enough to be stored in your garage?
     
  • Envision a plane that can carry passengers over 300 MPH, take off from short landing strips and operate VFR or IFR to 18,000 feet?
     
  • Anticipate that your "dream machine" will cost a fraction of the price of a "previously owned" Cessna, Beechcraft or Piper?
     
  • Appreciate that you can equip your dream machine with a variety of engines or propellers even though they are not already FAA approved?
     
  • Grin with anticipation because even though you have limited experience, you can build an aircraft yourself in a garage or rented shop as an "amateur"? (In fact the FAA will insist that you maintain your "amateur" status, and not allow a professional to do more than 50% of the construction, so that it can qualify for experimental category certification.)
     
  • Plan for the day that you will put the sexy words "EXPERIMENTAL" on the side of your new aircraft and prepare knowing you can qualify for a Special Airworthiness Certificate?
     
  • Smile, because you may never have to wait for an inspection by an FAA employee who has more aircraft to inspect than hours in a government workday. Instead of anxiously waiting for the arrival of an FAA employee, who probably has no experience with your unique design, you can schedule an inspection by a "technical counselor" of the Experimental Aircraft Association or a "Designated Airworthiness Representative" (DAR), who is a knowledgeable private citizen appointed by the FAA.

If you pursue this dream, you will probably do so as a member of the fastest-growing fraternity in general aviation. From the early 1970s, the membership of the Experimental Aircraft Association (EAA) has grown from 29,000 members to 165,000 current members.

Homebuilts: The New General Aviation Market

There has been a 600% increase in the number of homebuilt aircraft registered with the FAA since the 1970s. In the 1980s production of single-engine factory-built aircraft just about came to a halt. Manufacturers of such production aircraft were the targets of many product liability lawsuits, which led to large verdicts and increased insurance premiums. Corporate ownership of small GA aircraft became less advantageous with the demise of government tax breaks and other financial incentives. Modern labor economics, environmental surcharges, and factory production costs have escalated. As a result, "previously-owned" single-engine general aviation aircraft have become increasingly expensive. All of these factors created a wide-open market for homebuilt aircraft — a trend which continues today.

The decline in the manufacture of small factory-built aircraft is not the only reason for the ascendancy of the homebuilt aircraft. Under the Federal Aviation Act, the FAA wears two hats, one to maintain safety and the other to promote air commerce. In its role of promoting air commerce the FAA has promulgated supportive regulations and advisory circulars encouraging the development of homebuilt aircraft; e.g., Advisory Circular 20.27D. Thus, anybody can buy the plans and/or parts, and obtain a special airworthiness certificate to operate the aircraft in the experimental category, if the amateur-builder does more than 50% of the fabrication or assembly, and does so solely for his own education or recreation. [14 CFR 21.191(g)]

Homebuilt Litigation: The Next Growth Industry?

KitfoxesRecently, a prominent insurance claims executive expressed an opinion at an Aviation Law and Insurance Symposium that homebuilt aircraft liability litigation will be a growth industry during the next decade because of the proliferation of amateur-built aircraft and the likelihood that there will be crashes.

Plaintiffs have often been reluctant to sue kit manufacturers because the manufacturers have always "gone bare." They have manufactured and sold kits without product liability insurance. The fear of winning a long and costly product liability battle against a kit manufacturer only to face the difficulty of collecting a judgment against assets, which may only consist of plans and parts, has been sufficient to dissuade most attorneys from pursuing such cases on a contingency fee.

Now more manufacturers are making money and getting "established." A serious effort is being made by the EAA to arrange Product Liability Insurance from Lloyds of London for qualified kit manufacturers. There is a strong market for inexpensive kit airplanes and gyroplanes, both domestically and abroad. Add to these factors a recognition that an excellent financial opportunity exists to sell such aircraft kits and it is predicted that many business groups with financial depth will be getting into the market. While this will remain a high-risk industry there are new legal protections available to manufacturers and builders.

Are Homebuilts Covered by GARA?

Homebuilt autogyroThe General Aviation Revitalization Act of 1994 (GARA) immunizes GA manufacturers against product liability after an aircraft has been in operation for 18 years. It covers injuries to passengers resulting from any defect which allegedly causes an accident, provided the accident occurs more than 18 years from the date of delivery of the product. Note that the 18 years is measured from when the product or component part is first delivered. Thus if you add a new propeller to a 10-year-old aircraft, the aircraft goes to product liability heaven after eight more years, while the propeller has to serve 18 years in purgatory.

GARA applies to "FAA-certified" aircraft. Amateur-built aircraft are indeed "certificated" aircraft, in that they receive a Special Airworthiness Certificate. Thus, amateur-built aircraft should receive equal protection under GARA with their factory-built brethren.

However, the Act does not spell out who is the manufacturer of a homebuilt, so courts will turn to product liability laws for an answer. Nor is the Act clear on how to measure the 18-year term for a "kitplane." Does it start when the kit is assembled into a finished product, or when the kit is first delivered? What if the kit sits on a shelf for 10 years and is then assembled and flown? In my opinion, the 18 years should start from when the fully-assembled kit is first certificated as an aircraft. (But there's no guarantee that a court would see it that way.)

How Is a Homebuilt Aircraft Created?

SeawindTo understand the product liability exposure of those involved with homebuilt aircraft, one needs to first review how a homebuilt aircraft typically comes into existence. While some homebuilders may start from scratch, using plans consisting of design specs that they have obtained from a designer, most homebuilders obtain kits from kit manufacturers. The kits usually contain plans, some pre-fabricated parts and certain essential raw materials.

In March 1994, Kitplanes magazine conducted a survey of 204 manufacturers of plans and kits. Of the 70% who responded, 42 sold plans only, 68 sold kits only and 44 sold both kits and plans.

A recent study revealed that there are four completed kit-built aircraft for every one completed plans-built aircraft. According to the participants in the survey, the completion rate among kit buyers was in excess of 60%, whereas the completion rate for the purchasers of plans alone is less than 5%. [Source: Paper presented by Miami Attorney Robert C. Owens at the Twelfth Annual Embry-Riddle Air Law Symposium, Daytona Beach, Fla., January 22, 1999.]

Once the builder acquires the kit, the amateur-builder, as the FAA calls him, is required to do the majority of the fabrication and assembly of the kit. To some extent the builder can hire others to inspect or oversee his personal construction or assembly of the kit. However, the amateur-builder cannot legitimately hire qualified professionals to actually perform the construction or assembly. [FAR 21.191(g)] The homebuilder may purchase the engine, propeller, brakes, wheels, pulleys, bolts, bearing and rivets from a subcomponent supplier and incorporate these items into the homebuilt aircraft.

During assembly, the homebuilder should have the aircraft inspected by knowledgeable persons approved by the FAA. [Advisory Circular 183.33A] He should also maintain a construction log with photographic documentation of the building process. When the aircraft is completed, it must bear the marking "Experimental" on the fuselage. Further, a placard must be put in the cockpit stating:

Passenger Warning: This aircraft is amateur-built and does not comply with federal safety regulations for standard aircraft.

Upon completion of construction, the amateur-builder can submit a FAA Form 8130.7 application with the progress log to the FAA or a designee of the FAA for a post-construction inspection of the new aircraft. After the inspection, a special airworthiness certificate is issued but with operating limitations that the airplane may be flown only within a limited geographical test area for a certain number of hours. Upon completion of these proving flights, the restrictions are lifted and the homebuilt aircraft can be flown like any other general aviation aircraft.

An experimental-category aircraft can carry passengers, but it cannot be used to carry passengers for compensation or hire. Annual condition inspections are required but may be signed off by a FAA licensed A & P mechanic. Alternatively, the homebuilder himself may sign off annually but only if he has obtained a "Repairman" certificate. [Advisory Circular 20-27D, Appendix 9; Advisory Circular 65-23A]

Who Has Product Liability Exposure?

GlasairFirst, there is no such thing as "the Law" in this area. Product liability laws vary from state to state. Therefore, the following analysis is somewhat simplified and based on an example of how some jurisdictions in the United States would evaluate the product liability of the parties discussed. The unique facts of a particular case or special laws of any particular jurisdiction could change the analysis.

Understand that product liability laws are designed to protect consumers. Courts consider homebuilt kit purchasers to be consumers. Passengers in a homebuilt would be considered consumers vis a vis the product. The manufacturer who sells a kit with a defect in it, or the homebuilder who assembles it negligently, will generally continue to have product liability exposure for injuries to any consumer.

The Kit Manufacturer

Some people use the term "manufacturer" quite broadly with respect to homebuilt aircraft. From a legal liability point of view, one needs to evaluate the function of each party in order to determine who was the manufacturer.

Typically, a company in the business of selling plans and parts in a package is called a kit manufacturer. The kit manufacturer may have continued product liability exposure for the plans and parts even beyond the first purchaser. This product liability exposure can arise from a possible defect in the design itself ("design liability") or the instructions which accompany the design (another form of design liability).

Exposure can also result from a lack of adequate warnings which should have accompanied the design, or ambiguous warnings which came with the kit ("failure-to-warn liability"). Liability may also result from misrepresentations made about the capabilities of the finished product including its performance characteristics ("negligent misrepresentation or fraud liability").

If the kit manufacturer has selected substandard materials for any of the parts or components sold as part of the kit, or has pre-fabricated any of these components incorrectly, the kit manufacturer may be exposed to liability ("manufacturing liability") under the laws of most states. Normally, if the only thing sold is the design, the only exposure would be for the design itself and any of the instructions or warnings that accompany or should accompany it. As a general rule, the more the kit manufacturer puts into the product he sells, the more exposure the kit manufacturer has.

A point of law: The kit manufacturer, as a commercial seller of a mass-produced product, is held to a higher standard than a homebuilder. He will have strict product liability exposure. The product liability exposure is "strict" because a plaintiff will not normally be required to prove that the manufacturer was negligent. A plaintiff need only prove that a defect existed when the product left the manufacturer's control and that the defect then caused injury.

The Amateur-Builder

Which came first?The homebuilder (amateur-builder in the eyes of the FAA) might be considered a manufacturer by some courts. Other courts would call him an assembler, insofar as he follows the plans and builds the kit without modification. Sometimes he acts as a fabricator or manufacturer. Thus when he takes raw materials and converts them to a finished product to be incorporated in the ultimate aircraft, he is more likely to be viewed as a non-commercial (private) manufacturer.

If the homebuilder selects and adapts components such as the engine propeller, tires, brake assemblies, etc. and these components are not called out specifically by the design, such homebuilder may assume responsibility of a designer and/or a manufacturer. Usually, a homebuilder is not in the business of selling a mass-produced product to consumers. Accordingly, he will normally have product liability only when a plaintiff can prove he was negligent in building the aircraft.

So Who's Liable?

The ultimate test of the product liability of the homebuilder versus the kit manufacturer will be a liability trial with a passenger or other innocent party as the plaintiff. The plaintiff must prove that a defect in the aircraft caused injury. Normally in this type of case, the plaintiff must also prove who designed and/or manufactured the defective component which caused the crash.

If it turns out that the defective component was a component that was not modified by the homebuilder, then product liability may be traced back to the original designer and kit manufacturer. If, on the other hand, a defect is attributable to the work of the homebuilder, the homebuilder may bear exclusive or primary liability. If the homebuilder goes out and purchases a pre-fabricated accessory or component and it turns out that accessory or component is defective, the accessory or component manufacturer may have product liability exposure.

Kit Manufacturer Defense #1: Modification

CarterCopterProduct liability exposure changes if the kit manufacturer can prove that someone else "modified" the allegedly defective component after it left manufacturer's control. Thus "Modification" is a major defense in homebuilt litigation. The following examples illustrate the way this defense works in many states:

Case #1: The Assembler

A homebuilder buys plans and components and raw materials from a kit manufacturer. He or she follows the design, uses prefabricated parts in the kit without modification, and fabricates the remaining materials to assemble the finished product. After a proper inspection, the homebuilder is entitled to the issuance of a special airworthiness certificate and can operate the aircraft as an experimental category aircraft.

If a crash occurs because of a product defect which can be traced to the original design or kit components, the kit manufacturer may have strict product liability exposure. If the kit was negligently assembled or manufactured, the builder may have negligence product liability for his substandard work.

Case #2: The Tinkerer

Assume instead that the homebuilder does not follow the design and kit assembly instructions in all respects. Instead, the homebuilder modifies a portion of the design or alters some of the components in the kit.

If the resulting aircraft crashes and a defect can be traced to the modification work done by the homebuilder, then the kit manufacturer may have a successful defense against liability. If, however, the defect can be traced to the original design or prefabricated kit components, and is not a result of the modifications performed by the homebuilder, the original kit manufacturer still has strict product liability exposure.

Case #3: The Modifier

GlasairFinally, assume that a homebuilder heavily modifies the design, uses substitute materials in the kit, incorporates unique assembly procedures, etc.

If a crash occurs, it may be difficult to trace any product defect to the original kit manufacturer. If the kit seller can show that the finished product is not in conformity with his design, or that his components have been significantly altered, the kit manufacturer may have a complete "Modification" defense and the builder will have the exposure.

But Don't Count on It!

Beware that under the product liability laws of some states, the original kit manufacturer as a commercial seller of a consumer product may still have product liability exposure, even thought the design or kit materials had been modified or misused! Some courts will do almost anything to protect consumers at the expense of manufacturers and have held that a commercial manufacturer must anticipate a reasonably foreseeable amount of modification or misuse of their product.

Kit Manufacturer Defense #2: Pilot Error

Two recent crashes provide "case studies" of how accidents happen, why better training is needed and how pilots pay the ultimate price for their mistakes.

Case 1: The John Denver Crash

Long-EZFor many years the image of a high-performance exotic homebuilt aircraft was enhanced by the designs of Burt Rutan, who developed a family of aircraft known as the Vari-Viggen, Vari-EZ, and Long-EZ. These high-performance composite aircraft sport a forward wing called a "canard" and swept-back rear wings and rudders ensconcing a rear-mounted engine with a pusher propeller. The popular Long-EZ found itself in the public spotlight as a result of the unfortunate accident which took the life of singer-songwriter John Denver.

The accident occurred on October 12, 1997, about 5:30 in the afternoon. The Long-EZ, piloted by Denver, crashed into the Pacific Ocean near Monterey, Calif., where he had a second home. Denver was an experienced pilot, with over 2,750 flight hours, who had flown a number of factory-built aircraft. He had just purchased the Long-EZ a few weeks before the fatal crash, and had obtained only 30 minutes of checkout time in the Long-EZ.

John DenverAccording to NTSB investigators, Denver had been practicing takeoffs and landings at the Monterey Peninsula Airport, and just departed to the west when the airplane banked sharply and crashed into the ocean from an altitude of approximately 350 feet. The plane had approximately 15 gallons of fuel in it when Denver took possession of the airplane in Santa Maria, about 100 miles south of Monterey. There is speculation that the checkout flight at Santa Maria, the flight from Santa Maria to Monterey, and a 16-minute landing pattern practice on October 12, 1997, could have used up most of the fuel on board. Denver apparently failed to refuel in Monterey. It appears from the NTSB Report that he took off knowing that the fuel selector handle had been placed in a non-standard and extremely awkward-to-reach location behind the pilot's left shoulder by the aircraft's original builder. This installation was approved by an FAA airworthiness inspector from Houston, Texas.

The NTSB determined that a "probable cause" of the accident was the pilot's diversion of attention from the operation of the aircraft. It is believed that Denver inadvertently applied the right rudder while attempting to manipulate the fuel selector handle located over his left shoulder, resulting in the loss of control of the airplane. The report also determined that the pilot was responsible for inadequate pre-flight planning. The NTSB identified his failure to refuel the airplane when in a low fuel condition as causal because it left him groping about the cockpit in an attempt to select fuel at a low altitude. Thus, the Board blames the crash primarily on pilot error.

The NTSB also identified as causal "factors" in the accident two errors by the original homebuilder: (1) the decision to locate an unmarked fuel selector handle in a hard-to-access position; and (2) a decision place unmarked and uncalibrated fuel quantity sight gages in the cockpit. The Safety Board also commented on John Denver's inadequate transition training from his traditional factory-built aircraft to this homebuilt model. Apparently Denver did not possess a valid medical certificate but the Board did not consider this causal. There was also a question about modifications which may have created an "aft CG" condition.

If litigation is instituted, it will be for the failure of the original builder to properly install and mark the fuel selector handle and sight gauges. Without more information I cannot speculate as to whether other parties have exposure. It is not known whether the original builder used an "Exculpatory Agreement" when the aircraft was sold, or whether the most recent owner had John Denver sign such a disclaimer.

Case 2: The Rotary Air Force Case

A case was recently tried in federal court in Northern Ohio, which may be the first homebuilt air crash case involving a death to actually reach a verdict. The verdict was in favor of the defendant kit manufacturer.

Rotary Air Force gyroplaneThe case of Frost v. Rotary Air Force Marketing, Inc. involved a crash of an RAF 2000 gyroplane. The lawsuit was brought by the widow of the pilot homebuilder who died in the crash. The decedent purchased the kit from a Canadian kit manufacturer. The kit consisted of plans, parts and raw materials, along with instructions for assembly of the gyroplane. The kit manufacturer was particularly prudent. As part of the contract of sale, the kit manufacturer required that the purchaser sign an agreement that he would obtain all necessary training required under the Federal Aviation Regulations before attempting to pilot the gyroplane.

The crash occurred apparently as a result of pilot-induced oscillations (PIO). PIO is a known hazard and a risk associated with the operation of gyroplanes. Evidence at trial showed that if the pilot had obtained the necessary training prior to attempting the operation of the gyroplane, that he should have been able to recover from a PIO condition. Unfortunately, the accident pilot, who had some prior ultralight and gyroplane experience, failed to obtain sufficient flight training in his new aircraft. Indeed, at the time of the accident, the pilot did not have a pilot's certificate! Thus, he was not legally qualified to act as pilot-in-command of the gyroplane.

The plaintiffs alleged that there were defects in the of the gyroplane resulting in a structural failure in the cheek-plate and/or box-beam assembly. Plaintiffs claimed that these defects caused the aircraft to go out of control and crash. After a hard-fought two-week trial which involved the use of expert witnesses on gyroplane piloting engineering and accident reconstruction, the jury unanimously found in favor of the defendant. There has been no appeal.

Plaintiffs were represented by plaintiff's attorney, Richard French of Cleveland, Ohio. The case was successfully defended by product liability defense attorney Allen Farcas of the law firm of Blatt, Hammesfahr & Eaton from Chicago, Ill. Some may recognize this law firm because Jack Harrington, Esq., founder of the Experimental Aircraft Association's Legal Advisory Council, is a partner in the law firm and supervises the defense of many homebuilt manufacturer cases.

Common Myths About Product Liability for Homebuilts

1. If the FAA certifies that the homebuilder constructed more than 50% of the finished product, the kit manufacturer is off the hook for product liability.

There are kit manufacturers who misunderstand the purpose of FAR 21.191(g). The "51% rule," as it is known, is a requirement of the FAA to ensure that the aircraft is in fact amateur-built. The craft is supposed to be primarily fabricated and assembled by a person who undertook the construction project solely for their own education or recreation. This is merely a regulatory requirement which allows the issuance of an experimental certificate to a homebuilder. [14 CFR 21.191(g)] However, compliance with the 51% rule does not mean that the original kit manufacturer is completely off the hook in terms of product liability exposure. This is true in most jurisdictions, even if all FARs have been complied with. Compliance with FARs is NOT a complete defense to product liability under most states' laws. (Of course evidence of FAR compliance is admissible and very helpful in the defense.)

2. Insurance is generally unavailable for homebuilt aircraft.

Gee BeeThere is hull and liability insurance for many homebuilt aircraft offered by Avemco Insurance Company. Avemco is the largest insurer of homebuilts with hull and liability coverage for many different types of homebuilt aircraft. The insurance provides coverage for the ownership and operation of the homebuilt by the homebuilder, while the homebuilder is the owner of the aircraft. Coverage is not normally provided for the product liability exposure associated with the building process. There may be a training requirement as a pre-condition for coverage. Any homebuilder interested in acquiring coverage should check with Avemco or his aviation insurance broker.

Kit manufacturers, on the other hand, have generally been treated as uninsurable, and normally go without product liability insurance in their business. The Experimental Aircraft Association is attempting to negotiate coverage for kit manufacturers through the underwriters at Lloyds of London.

3. The FAA inspects homebuilt aircraft before issuing a special airworthiness certificate to the homebuilder.

The fact of the matter is that currently, FAA employees often do not conduct many of the formal inspections of homebuilt aircraft. The Advisory Circular controlling the certification operation of amateur-built aircraft purports to describe an inspection by the "FAA" prior to the initial flight test. [Advisory Circular 20-27D, paragraph 5]

Nevertheless, FAA manpower constraints have resulted in an ongoing situation where FAA insptectors may not actually conduct preflight inspections of newly-assembled homebuilt aircraft. Instead, the FAA relies heavily on inspectors from the EAA Technical Counselor's program and Designated Airworthiness Representatives (DARs) to inspect amateur-built aircraft on behalf of the FAA.

Technical counselors from the EAA are experienced builders and offer advice to amateur builders. They inspect the components of the aircraft during the building process. DARs are FAA designees who are not employees of the FAA but who accept a certain amount of responsibility from the FAA to perform inspections regarding the building process of the homebuilt aircraft. They are authorized to collect a fee for their work. AC 183-33A, AC 183-35B.

Even though amateur-built aircraft may be certificated for operation without any employee of the FAA ever inspecting the aircraft, this does not imply a safety deficit. DARs and Technical Counselors are very experienced and specialized homebuilt inspectors, whereas the FAA employee who might be sent out to perform the inspection may have little or no experience with this type of aircraft.

4. It's safer to buy an FAA-certified kit.

The FAA does not certify or approve kits! [Advisory Circular 20-27D, paragraph 7, 6/22/1990] The FAA only evaluates kits to determine whether the kit appears to have the ingredients necessary to allow an amateur-builder to qualify under the 51% rule. [FAR 21.191(g)]

5. The homebuilder should disassemble his amateur-built aircraft before selling it to avoid product liability.

"IF" it were possible to restore the aircraft to its original kit form, and "IF" all plans, instructions, warnings and material were conveyed in the identical condition they were in when previously purchased new from the kit manufacturer, and "IF" this were all meticulously documented, photographed and videotaped, then MAYBE the intermediate owner may avoid builder liability to the purchaser. But obviously, this is hardly ever feasible.

If a serious crash occurs, passengers or ground victims will probably sue the intermediate owner anyway. Their success will depend on the facts of the individual case. Another approach to this problem is for the builder to require that the purchaser sign an "Exculpatory Agreement" whereby the new owner expressly agrees to take on all the liability responsibility from the seller.

Exculpatory Agreements

CockpitManufacturers, builders, sellers and pilots often ask whether they avoid liability by requiring that a passenger sign an "exculpatory agreement" (sometimes called a "waiver" or "disclaimer"). The answer really depends on the laws of the state where the agreement is to be signed.

Most courts do not allow a commercial seller of a product to avoid liability for injury or death to a consumer by means of such agreements. Commercial sellers are exposed to strict product liability for defective products and it is against public policy to allow them to disclaim liability. However, it's different with private parties. A number of states allow private parties to use exculpatory agreements but strictly construe their language. Other states, including California, allow the use of such express assumption of risk agreements under the right circumstances. California even has a basic jury instruction which allows the jury to be told that a negligent party can be excused from liability where a victim has expressly has assumed the risk of his own injury. I personally believe that exculpatory agreements or disclaimers are useful because they spell out the individual responsibility people should acknowledge when undertaking risky recreational activities.

Disclaimers and waivers are frequently enforced in economic damage cases, i.e., when they involve breach-of-contract or breach-of-warranty issues. Exculpatory agreements are much more strictly construed when personal injury or death is involved. The following is a partial list of considerations relevant to whether such exculpatory agreements may be upheld by some courts:

  • In some states, a private seller may be able to disclaim liability for negligent acts in connection with the sale of an aircraft to a pilot purchaser who is in an equal bargaining position with the seller.
     
  • A private seller of a kit airplane might be able to disclaim liability for passenger injury resulting from negligence associated with the construction and piloting of a homebuilt aircraft if the exculpatory agreement is carefully drawn and does not violate public policy under a particular state's laws.
     
  • To be enforceable, exculpatory agreements must be unambiguous and clear as to the risks the signatory is taking. Further, the disclaimer must be written with clear and conspicuous print warning the signatory of the rights that he is giving up.
     
  • There cannot be any compulsion, pressure, economic leverage or misleading inducement that caused the person to sign the agreement.
     
  • The person who signs the agreement must be an adult and must be the person against whom the agreement will later be asserted in the event of injury. Most states will not allow a spouse to sign away their husband's or wife's rights to sue for wrongful death.
     
  • Normally such agreements are only honored in private recreational activities which do not involve public services or public interest.
     
  • Many courts will not honor these agreements if the negligent actions of a party also constitute violations of law, because while a private party may agree to release you from your own negligence, the courts have an interest in penalizing violations of the law.

Don't Expect "Boilerplate" Disclaimers to Work

It is important to understand that if anyone hopes to successfully use an exculpatory agreement to cut off a serious injury or death claim, it must be carefully drafted by an attorney knowledgeable in this area and should be customized for the particular operation involved. Thus, "cookie cutter" form agreements that one pilot has copied from another pilot, who got it from a friend, after it was prepared by a lawyer for a different circumstance, are not likely to be honored by the courts. Anyone who uses "personal injury and death disclaimer" should anticipate that a plaintiff's attorney will scrutinize the document and the circumstances in which it was used to argue that the victim didn't understand what he was giving up. Trial courts and appellate courts will scrutinize the "disclaimer" before enforcing such agreements because it may mean dismissing somebody's million-dollar wrongful-death suit.

There is no guarantee that an exculpatory agreement would be upheld by any particular court; however, there is in incidental benefit to using such exculpatory agreements between sellers and buyers and between pilot owners and passengers. An attorney who takes on the case of a victim against a homebuilder or a pilot must seriously consider the risk that the exculpatory agreement will be enforced by the court and that the case will be thrown out. Thus, a lack of substantial assets coupled with the existence of a well-written exculpatory agreement may mean the difference between a lawsuit and no lawsuit. Even if the lawsuit is filed, the case may be settled on much more negotiable terms if the defense lawyer has the ability to assert the exculpatory agreement against the plaintiff's claims.

I believe that exculpatory agreements are an ideal tool for the sellers of homebuilt aircraft and for the operators of homebuilt aircraft who carry passengers. Why shouldn't people be able to give up their right to sue if they knowingly and voluntarily assume a recreational risk?

Conclusion

The growth of the homebuilt industry is exciting. Unfortunately, when accidents occur, lawsuits will follow. Careful building procedures and safe operating practices should minimize exposure to lawsuits.

A recurring problem in homebuilt accidents is the fact that the pilot often flies a new-model aircraft with little or no specific training in that particular model. Kit manufacturers should consider offering training to their customers. Smart underwriters require training before providing insurance. Prudent builders who know that their life depends on the quality of their construction should exercise the same amount of prudence on the operational side and obtain familiarization training in their aircraft before flying it solo.

EAA and the FAA provide a wealth of literature for aspiring homebuilder pilots. A mastery of this information and a healthy dose of common sense will prevent the accidents that lead to the lawsuits. Also, it wouldn't hurt to have a properly drafted exculpatory agreement in the hangar, just in case.

NOTE: The issues discussed in this article do not constitute legal advice. My objective is to alert you to some common issues so that you can avoid or minimize legal trouble. Anyone with an aviation law problem should be guided by the advice of his or her lawyer, under applicable federal and state laws, after a full and confidential disclosure of all relevant facts.