Thank you so much, you have been brilliant!
Ms L Tippett
Consumer wins again as ECJ considers compensation for flight delay under the Denied Boarding Regulations
Mon 21st May 2012 Claims abroad
Consumers still in limbo over their claims for compensation for delay, airlines and travel insurers alike have been waiting for the European Court of Justice to opine on whether compensation under the Denied Boarding Regulations is available for very long flight delays.
Now, Advocate General Bot has given his Opinion on the point that clearly states compensation is payable for delays of three hours or more, unless the airline can show it was caused by 'extraordinary circumstances'.
What the Denied Boarding Regulations say about compensation
It was previously common ground that consumers have an entitlement to fixed compensation under the Denied Boarding Regulations (EU Regulation 261/2004) where a flight is cancelled, unless the airline can show the cancellation was a result of 'extraordinary circumstances'. This would include the Icelandic ash cloud from spring 2010 as well as the heavy snowfall during the winter of 2010.
Article 5 sets out the airline's requirement to provide care and assistance and to pay compensation in the event of a delay. Compensation is also payable where re-routing is offered but the re-routed flight takes off at least the day after the original planned departure. Article 6 goes on to flesh out the obligations on the airline to provide care and assistance, which depends on the distance of the flight and length of delay. Importantly, Article 7 sets out the fixed amounts of compensation payable in the event of flight cancellation, which depends on the distance of the flight as follows:
-250 Euros for flights of 1,500 km or less
-400 Euros for intra-community flights of more than 1,500 km and all other flights between 1,500 and 3,500 km
-600 Euros for all flights not in the aforementioned categories
The obligations only apply to flights leaving a Member State of the European Union or to airlines based in a Member State.
Airlines can avoid liability to pay compensation (but not to provide care and assistance: McDonagh v Ryanair) if they can show the delay or cancellation was caused by 'extraordinary circumstances'. This could include political instability, meteorological conditions incompatible with the operation of the flight (the ash cloud), security risk and strikes.
The decision in Sturgeon v Condor
In Sturgeon, the ECJ took its agenda for promoting consumer protection one step further. It decided there was no justification for distinguishing between a long delay and a cancellation. It felt the wording of the Regulation was sufficiently wide to give rise to a right to compensation for long delays. It defined a 'long delay' as a loss of time equal to or in excess of three hours. The airline could, however, rely on the 'extraordinary circumstances' defence if it could show this was the cause of the delay. The decision came as a shock to airlines that were previously only exposed to the risk to pay compensation under the Regulations in the event of a flight cancellation.
Resistance by UK airlines and the High Court referral to the ECJ
Unimpressed by the way in which the ECJ had stretched the language of the Regulations, TUI, British Airways and easyJet, together with the International Air Transport Association (IATA) launched judicial review proceedings against the CAA. They sought to challenge the ECJ's decision in Sturgeon on the basis it conflicts with previous case law, involves an incorrect application of the Regulation and is inconsistent with other principles and provisions of international law. The CAA refused to confirm its interpretation of the Regulations so the airlines together with IATA sought judicial review.
In August 2010 the High Court referred a number of questions to the ECJ about the interpretation of the Regulations. The German Amtsgericht of Köln had already made a referral raising similar questions so the proceedings were joined.
The High Court sought clarification from the ECJ on, amongst other things, whether Articles 5 to 7 of the Regulation should be interpreted such that the fixed compensation under Article 7 should be paid by airlines to passengers whose flights are subject to delay.
In an unequivocal victory for consumers, the Advocate General has confirmed in his Opinion of the 15 May 2012 that passengers whose flights are delayed may claim compensation under the Regulations where they suffer a loss of time equal to or in excess of three hours. In other words, compensation is payable where the passenger reaches their intended destination three hours or more after the arrival time originally scheduled by their carrier.
The upshot of the Opinion is that compensation is available for a very long delay and that a very long delay means three hours or more.
Although not binding, the Opinion gives a strong indication of the approach the ECJ is likely to take when it gives judgment on the point as it is rare for the Advocate General's Opinion not to be followed.
The Opinion is in keeping with the general trend from the European institutions and lawmakers to ensure consumer protection is paramount. Advocate General Bot recognises that "the very objective of the legislation is… to ensure a high level of protection for air passengers regardless of whether they are denied boarding or whether their flight is cancelled or delayed, since they are all cause similar serious trouble and inconvenience…" He was not persuaded by arguments that fixing the duration of time required for compensation for delay to be payable went beyond the scope of the Regulations. The principle of legal certainty enshrined in European law required the rules to be clear and precise. By saying compensation is payable for delays of over three hours airlines would know when they need to pay out and consumers would know when they are entitled to claim. Furthermore, this would avoid variations in domestic case law and secure harmony across the EU.
If airlines and tour operators feel like they have taken another blow from Europe, they may find some solace in the comfort offered by the statistics that suggest that less than 1.2% of flights fall under the scope of the Regulations and that only 0.5% of those flights involve delays of three hours or more. They also have the 'extraordinary circumstances' defence if the delay or cancellation is beyond the airline's control and in addition the right to seek reimbursement of monies they have had to pay out from the person who caused the delay, including third parties.
The Advocate General's Opinion gives a strong indication of how the ECJ is likely to decide this point. It is highly unlikely the judges will do a u-turn on the extension of the Regulations made in Sturgeon. After all, the ECJ's judges will tell you that it was not an extension of the Regulations at all; they were simply interpreting the rules in the way that was always intended.
Travel insurers should continue to refer policy holders back to the airline in question to seek redress and compensation for delay or cancellation before agreeing claims.
The High Court has ordered that all further proceedings for claims for compensation for delay be stayed pending the decision of the ECJ. A stay in these cases means the parties are forced to wait until the ECJ reaches a decision. Airlines are likely to wait before settling these cases in a last ditch hope the ECJ changes tack and rules in their favour. The old adage, pigs might fly, springs to mind.
For further information please contact Chris Deacon, a Solicitor in our Travel team on 023 8085 7399 or at firstname.lastname@example.org.
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