Published on Wednesday, May 31, 2017

Ryanair scores victory over 'ambulance chasing' claims firms

A UK court has upheld a requirement by Ryanair for flight delay compensation claims submitted on behalf of passengers by claims management companies to be heard in Irish courts.

Liverpool County Court had dismissed an application by flight compensation company Hughes Walker for its claims for delayed and cancelled flights to be heard in England.

The Irish airline said it had inserted a clause requiring all compensation claims to be held in Ireland into its booking terms and conditions in 2010, but it said it would only ball back on this clause when claims were submitted on behalf of passengers by third parties.

It claimed the clause had been inserted in its T&Cs to 'protect' customers from 'claims chasing' firms who pursue compensation on behalf of passengers but charge fees of up to 50% of the cost of the payout.

The airline said it would only fall back on the 'exclusive jurisdiction' clause for claims submitted via a claims compensation firm, such as Hughes Walker.

The court heard that another 200 cases involving Ryanair had been put on hold, waiting for today's ruling, and Judge Graham Wood QC said that the ultimate resolution, whether it be in this or a higher court, would have 'far reaching ramifications for a vast number of other flight delay claims, and in particular for the lawyers and claims management companies which are involved in this vibrant claim industry and which has been expanding for a number of years'.

In fact, Ryanair had already paid the passenger involved in the case, Amelia Menditta, €250 for her delayed flight from Pisa to Stansted in 2015, but the judge said it had decided to defend its jurisdiction claim 'for seemingly altrustic reasons'.

Ryanair's terms and conditions also state that it won't consider compensation claims submitted by third parties, including lawyers, unless it has previously received and rejected a claim direct from the individual.

The airline's spokesman Kenny Jacobs said: "We welcome this County Court ruling upholding Ryanair's jurisdiction clause which prevents 'claims chaser' firms deliberately and needlessly dragging consumers through the courts so they can grab up to 50% of customer's compensation, for providing no useful service."

One flight compensation specialist firm, FlightDelays.co.uk, warned last year that if today's case went in Ryanair's favour, it would make it harder for all its passengers to seek compensation.

"If passengers were only able to bring a claim using Irish solicitors in the Irish courts, the vast majority of passengers living outside the Republic of Ireland will probably not bother to bring a claim at all - especially bearing in mind that most claims against Ryanair are only worth between £210 and £350," Nicholas Parkinson told the Guardian.

However, Ryanair's Jacobs added: "As the most reliable airline in Europe, Ryanair has the most on-time flights and the fewest cancellations, and in the rare event of delays or cancellations, we comply fully with all EU261 legislation. Where customers have a valid claim for compensation they can make their claim directly on the Ryanair.com website, and avoid these 'claims chasers' deductions.

"These 'ambulance chasers' of the aviation industry are misleading customers, forcing them to sign liens and taking them through the courts so they can feather their own nests, and then charging up to 50% of the compensation due for simply submitting a claim that can be made free of charge on the Ryanair.com website."

Hughes Walker was given leave to appeal.

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  • In the interests of balance

    This was a hard fought case heard by Liverpool County Court in which Ryanair argued through its QC, that its passenger was bound by a jurisdiction clause which states claims for flight delay compensation may only be brought through the Courts of the Republic of Ireland. Ryanair are quite unusual amongst major carriers serving the UK market in having a jurisdiction clause which excludes the jurisdiction of UK Courts. As the Judge acknowledged, the issues in the litigation are highly complex and include whether a Jurisdiction Clause in an airline's contract has an overriding effect under something called the Brussels Regulations- this arises because special protection for consumer included in the Brussels Regulations is expressly excluded in the case of contracts for transport; and secondly whether the jurisdiction clause is an "unfair term" under the European Directive Unfair Terms; and thirdly if it is an "unfair term", whether the Brussels Regulation or the Unfair Terms Directive should take precedence. The Judge found in favour of the airline on the specific point that he did not think it was an unfair term because English passengers could use the small claims procedures in Ireland. However he also acknowledged that he found it very difficult to resolve the legal issues and he gave the Claimant immediate permission to make a "leapfrog" appeal to the Court of Appeal. The Claimant has 3 weeks in which to commence an appeal. The concession by Ryanair that they will not enforce their Jurisdiction clause so long as their passengers present their claims directly to Ryanair is very much welcomed; however this is not what their terms of carriage currently state, so the airline should perhaps amend the clause so that it at least reflects their stated policy. Ryanair's wider assertion that solicitors provide no useful service for passengers is to say the least debatable. In the case in point, Ryanair initially failed to pay the compensation that it owed despite having no valid defence at the time the claim was presented. It was only after the issue of proceedings that settlement was offered by the airline. Similarly the recent unexpected decision of the European Court concerning bird strikes highlights that claims for flight compensation can still be complex and deeply argued over. Likewise the English Court of Appeal will later this summer hear a novel and complex appeal by another airline whch argues that European Regulation 261/2004 breaches both national and international law. Several years ago, Ryanair for their part famously defended all the way to the European Court, the claim of Denise McDonagh for the sum of €1129 she incurred when the Icelandic ash cloud disrupted her travel plans. They also fought a bitter battle in the English Courts trying to uphold a 2 year "limitation clause" when consumers on both sides of the Irish Sea normally have 6 years to bring a claim. It could thus be argued that it is not unreasonable for passengers to employ solicitors or claims companies if that is what the passenger in question wishes to do. The fees referred to by Ryanair cover all the Court costs of bringing Court proceedings where necessary. For example, if a case is taken to the Court of Appeal, each passenger would pay less than €300 (and nothing if they lose) for legal fees for a case which would cost multiple tens of thousands of pounds if they were to pay for such services privately. It is only through the dedicated work of lawyers across Europe, that airlines pay flight delay compensation at all, and for years airlines routinely denied such claims. In the case of Menditta -v-Ryanair, the Judge declined to criticise the role of solicitors and claims companies, saying he preffered to address only the legal issues. Of course all passengers are free to deal with their own claims themselves if they wish. They also have the right to cancel their instructions within 14 days (which is not something most airlines offer).

    By Hughes Walker, Wednesday, May 31, 2017

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