Travelmole guest comment: uncertainty over airline compensation
Monday, 10 Mar, 2011
0
Solicitor Emily Woods at national law firm Berrymans Lace Mawer comments on a recent court case which has caused unrest for the travel industry as airlines continue to compensate for delay.
Since the European Court of Justice’s (ECJ) effective re-writing of EC Regulation 261/2004 in the joined cases of Sturgeon v Condor and Böck and Lepuschitz v Air France (November 2009), airlines have been fighting off claims for compensation by delayed passengers that argue that they should be compensated as if their flights had been cancelled.
Sturgeon and Bock addressed the difference between delay and cancellation. The ECJ controversially interpreted the Regulation as obliging airlines to pay compensation not only to passengers whose flights are cancelled (which it is agreed was the intention of the Regulation) but also to passengers who suffer delay, so that they reach their final destination three hours or more after the original scheduled arrival time.
With the interpretation applying retrospectively since the Regulation came into force in 2005, the number of claims from delayed passengers has been high. The airline industry knows only too well that delays are common and often unavoidable and argue that they should not be liable to pay such compensation.
A respite for the airline industry appeared to come in August 2010, when a group of airlines applied to the High Court for a judicial review of compensation claims in respect of delays of three hours and more, and sought to suspend the ECJ judgment in the Sturgeon/Böck case. The High Court referred the matter back to the ECJ for a further ruling. Pending the review decision, it was argued that all such claims in the UK courts were put on hold.
However, a recent case at Middlesborough County Court has caused some unrest. The passenger in the case was trying to obtain compensation from an airline for the costs of a 28 hour delay to the start of a week’s holiday to Las Vegas. Whilst the judge agreed with the airline’s arguments that the case should be put on hold (a ‘stay’) pending the outcome of the ECJ decision, the judge ruled no general stay exists.
Whilst airlines therefore can continue to refuse claims if they can show the delay was the result of "extraordinary circumstances" (which does not usually include lack of crew or technical or maintenance problems), the recent case decision appears to imply that airlines must continue to pay compensation for delays of three hours of more.
In practice, airlines should be able to obtain stays of cases, but they will need to deal with each case on an individual basis and applications for stays should be made to the court in question. Of course, any compensation payments made for such delays by airlines will not be able to subsequently be recovered, if the ECJ reverses its decision – a decision eagerly awaiting by the travel industry.
The present position is very unsatisfactory for both airlines and passengers as legal certainty is crucial. Given that the ECJ is not expected to review the decision until 2012, airlines should apply for a stay on each specific claim and only make payments where unavoidable.
Dinah
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