Missing Malaysian Flight MH370: The £450m question – Why are Western lives worth more than Chinese ones aboard the stricken plane?

Search for debris suspended due to bad weather - yet families already being urged to consider potential pay-outs

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As Chinese life insurance companies started paying out to the families of those on board Malaysia Airlines flight MH370, relatives of passengers from different countries faced the prospect of wide discrepancies in the compensation from the airline.

According to the Chinese state news agency Xinhua, the country’s largest insurance company China Life had 32 clients on board the flight when it disappeared into the southern Indian Ocean.

The families of seven passengers have already received pay-outs, and it is estimated that the company will pay out a total of 9 million yuan (£875,000), an average of less than £30,000 per person.

Meanwhile, experts have warned that Malaysian Airlines could face compensation costs of up to $750 million (£450 million).

Though no debris has been found from the missing Boeing 777 and Chinese families continue to protest that they have not been told “ the whole truth” by Malaysian authorities, a US-based law firm has also already come forward to say it is preparing to bring lawsuits against the airline and plane manufacturer.

Under the terms of the Montreal Convention, which was drawn up to deal with the multinational issue of aircraft disasters, a lawsuit can be brought in any one of five possible courts – the country of origin for the flight (Malaysia), the country where the flight was headed (Beijing), the country where the airline is based, the country where the tickets were bought or the home country of the individual passenger.

This raises the possibility of some passengers’ families receiving far smaller pay-outs than those from other countries.

Malaysia Airlines Flight MH370 is thought to have crashed on 8 March with the loss of all 239 people aboard after flying thousands of miles off course. More than 150 of the passengers were Chinese.

A US-based aviation crash attorney, Floyd Wisner, told CNBC: “ For the majority of passengers on this flight, this [the country where the lawsuit can be brought] is either China or Malaysia and these countries have very limited views of damages as opposed to America.

“They could evaluate these cases and say a Chinese life is (of) less value than an American life. That's unfair and that's going to cause problems.”

Wisner said that the airline could pay out between $500 and $750 million (£300-£450 million) in total compensation to the families, and was likely to have liability insurance to value of around $1 billion.

malaysia-5.jpgChicago-based Ribbeck Law said it expects to represent families of more than half of the passengers on board the missing Malaysian Airlines flight in a lawsuit against the carriers and Boeing, alleging the plane had crashed due to mechanical failure.

The firm has filed a petition for discovery against the manufacturer and Malaysian Airlines in a Cook County, Illinois Circuit Court. The petition is meant to secure evidence of possible design and manufacturing defects that may have contributed to the disaster, the law firm said.

Though both Boeing and Malaysian Airlines were named in the filing, the focus of the case will be on Boeing, Ribbeck's lawyers told reporters, as they believe that the incident was caused by mechanical failure.

A relative of passengers on the missing Malaysia Airlines flight MH370 speaks to the media at the Metro Park Lido Hotel in Beijing on 26 March

“Our theory of the case is that there was a failure of the equipment in the cockpit that may have caused a fire that rendered the crew unconscious, or perhaps because of the defects in the fuselage which had been reported before there was some loss in the cabin pressure that also made the pilot and co-pilot unconscious,” said Monica Kelly, head of Global Aviation Litigation at Ribbeck Law.

“That plane was actually a ghost plane for several hours until it ran out of fuel.”

Kelly said the conclusion was made based on experience on previous incidents, dismissing the possibilities of hijacking or pilot suicide.

The lawsuit, soon to be filed, would seek millions of dollars of compensation for each passenger and ask Boeing to repair its entire 777 fleet.