May 2014 was a busy time for passenger rights regulation in the Court of Appeal, arising from EU Regulation 261/2004. These are the regulations establishing rules on compensation and assistance to passengers in the event of denied boarding, and delayed or cancelled flights.
Airlines are not obliged to pay up if they can show that “the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken”.
Airlines have argued that serious technical faults which cause a delay or a cancellation should amount to “extraordinary circumstances”. This led to the court considering these issues in Huzar v Jet2.com, with the Court of Appeal judgment being given finally on June 11, 2014.
The earlier judgment was Wallentin v Alitalia, which made clear that only those technical faults “that are not inherent in the normal exercise of the activity of the carrier concerned and are beyond the actual control of that carrier on account of its nature or origin” can be used in the “extraordinary circumstances” defence. The carrier still has to show that it took all reasonable measures to avoid these circumstances leading to the delay or cancellation of the flight.
The Court of Appeal carefully considered the criteria of the Wallentin decision and, in its judgment, held that the circumstances of any technical breakdown had to be out of the ordinary. Difficult technical problems arose as a matter course in the ordinary operation of the airlines. Some defects may be foreseeable, but all defects can be described as inherent in the “normal exercise of the carrier’s activity”.
As a result of this decision, airlines will find it extremely difficult to avoid payments to passengers under the regulation where delays are caused by technical faults with the aircraft.
It was not only the Huzar case that resulted in an appeal in May 2014. The Court of Appeal also heard the case of Dawson v Thomson Airways Limited. This case also concerned the implementation of Regulation 261/2004. Currently, claims for compensation under the regulation can go back as far as six years in the English and Welsh courts (with different limitation periods in other EU countries).
This case concerned the carrier arguing that across all jurisdictions – including under English law – the time limit to bring a claim should be limited to two years, as international carriage is governed by the Montreal Convention. Currently, many claimants and their advisers are “forum shopping” and seeking to bring claims in the English courts, where in their home state, the limitation period is much shorter. The airline sector will be eagerly awaiting this judgment.
For both categories of claims (technical defects causing flight delays and claims more than two years old), many of those that are current have been stayed pending the outcome of these decisions.
Many travel websites will fall within the new rules set out in the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013, particularly when these relate to contracts
concluded at a distance by electronic means (typically a consumer-facing website).
The new regulations require the trader to make the consumer aware in a clear and prominent way where there is any obligation to make payment when the consumer places an order.
This can be achieved by the consumer being obliged to press a button prominently labelled “order with obligation to pay” or “pay now”.
Websites will need to adapt swiftly to the new regime, which came into force on June 13, 2014.