Here we go with the "consumer may be a liar/ probably wrong" line of thought.

Airlines already have limited liability - there was an article here somewhere on how AC's liability on loss of luggage/items was $250, but was being increased to $1800 (in keeping with the Montreal Convention - an international treaty).

So really, there's only so much that the person can claim. And at $122, the sum is less than the current $250.

In any case, you conveniently ignore the fact that someone has to be responsible for that luggage after its checked in. Who exactly would that be? It can't be the passenger, since he has checked it in - and paid for the privilege of checking it in, in his airfare.

Therefore, it must be the airline, who may or may not outsource it to someone else on the ground. Either which way, the buck stops with the airline on that. If someone on the ground screws up after a piece of baggage is checked in, its up to the airline, not the pax, to chase it up. Unless, of course, you want pax marching down luggage conveyor belts to have a word with the baggage loaders when their luggage doesn't show up.

Leaves me wondering though - how many Canadians simply settle for what they are recieving, as opposed to what they should be recieving, simply because they never ask/check? It explains a lot about the company-consumer dynamic in some industries here.