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Friday, August 6, 1999 - Page updated at 12:00 AM

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Boeing, Airline Offer Pretrial Settlements For '98 Swissair Crash

Seattle Times Aerospace Reporter

The unexpected decision by Boeing and Swissair yesterday not to contest their liability for last year's Swissair crash will mean quicker compensation payments to the families of 229 people who died. But the move ultimately could benefit the two companies by forestalling even more expensive claims, according to a liability attorney involved in the case.

For perhaps the first time, Boeing and an airline have agreed to pay fully for damages even before fault has been determined. An attorney for Swissair revealed the decision during a pretrial conference in Philadelphia, shocking attorneys for families suing the airline.

The action means that instead of assessing liability, the case moves to assessing damages.

Seattle-based Boeing and Swissair said they wanted to spare families a prolonged legal battle.

"We will make sure that the victims' families are compensated as soon as possible so that they would not take five, six, seven years to get their money," said Urs Peter Naef, a Swissair spokesman in Zurich. "We pay for everything right now."

Naef emphasized the offer "does not represent admittance of guilt" for the Sept. 2 crash of Swissair Flight 111. The MD-11 aircraft, flying from New York to Geneva, crashed off Nova Scotia about 19 minutes after the pilot reported smoke in the cockpit. The Canadian Transportation Safety Board has not determined what caused the fire that spread above the cockpit ceiling.

John Greaves, whose Los Angeles law firm represents families of three passengers, contends Boeing and Swissair proposed a quick settlement because they feared a likely finding of liability.

Greaves said a jet that catches fire offers solid proof of something gone wrong. Questions also have been raised about whether the Swissair pilots acted swiftly enough to declare an emergency landing after discovering the smoke. Those factors made Boeing and Swissair vulnerable to damage claims, Greaves said.

"They are going to have to pay, and they know that," he said. "It's in their interest to be doing this."

Boeing spokesman Russ Young disputed that the settlement was motivated by liability concerns.

"This doesn't anticipate any finding of probable cause," Young said, adding that if a cause is determined later, Boeing still has the right to pursue action against those responsible for the crash.

Swissair is facing claims totaling $16 billion from families of U.S. victims suing on grounds of gross negligence, although attorneys expected a jury award would be far short of that figure. Swissair said it has reached settlements with relatives of five victims in France.

Young said Boeing has settled a handful of the lawsuits with families of victims killed in the 1996 crash of TWA Flight 800, a 747 jumbo jet. Boeing has settled with all the victims' families from the 1991 crash of a United Airlines 737 jet in Colorado Springs and the majority of the cases stemming from the 1994 crash of a USAir 737 plane.

The source of the explosion in an empty fuel tank that brought down Flight 800 has not been officially pinpointed. In the 737 crashes, federal investigators have concluded a tail rudder reversed uncommanded, causing the planes to spin out of control. What caused the malfunction is not known.

Greaves said quick settlements could avert costly punitive damages for Swissair and Boeing. However, he acknowledged that even when juries have awarded punitive damages in an air crash, no one has ever collected them.

Greaves predicted that situation may change now that criminal charges have been brought against Sabretech over the 1996 ValuJet crash in Florida.

Information from The Associated Press is included in this report.

Kyung Song's phone: 206-464-2423.

Copyright (c) 1999 Seattle Times Company, All Rights Reserved.

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