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Passengers v Airlines Regulation (EC) 261/2004


In the last issue of "In Dispute" we commented on the recent EC Regulation establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights (Regulation (EC) 261/2004) ("the Regulation").  Despite a formal challenge by IATA and ELFAA to the Regulation on a number of apparently strong grounds, the Regulation was declared valid by the ECJ in January of this year.

At that time the Regulation had not been tested in the courts and there was still some hope amongst airlines that the courts would, in effect, "tone down" the harsher aspects of the Regulation.  Further, early views were that the Civil Aviation Authority, tasked with enforcing the Regulation by imposing fines of £5,000 for an infringement, would take a lenient approach to airlines wherever possible.  There are two ways the courts could assist the airlines: firstly by taking a broad view of the "extraordinary circumstances" defence, which limits the circumstances in which airlines have to pay monetary compensation under Article 7 for cancelled flights. Airlines also hoped that the courts would turn a blind eye to the practice of stating that flights were delayed, rather than cancelled, since monetary compensation (as opposed to benefits in kind)  is not payable  for a delayed flight. 

Courts favour passengers

The CAA has yet to take enforcement action under the Regulation.  However, early case law suggests that the courts are increasing pressure on airlines by taking the side of passengers on both issues. 

The Harbord case

In August last year, Mr Harbord, an economist and former Oxford university lecturer, arrived at Stansted airport with his son to board a flight to Vancouver, Canada, with Thomas Cook.  On arrival, they were told that the flight had been "delayed" and would fly from Manchester the following day.  Thomas Cook even used the same flight number in order to seek to convince passengers that the flight was delayed and, ultimately, to deprive them of their rights under the Regulation.  Mr Harbord and his son refused to board the coaches bound for Manchester and booked flights with another airline instead.  No compensation was paid to passengers.  Mr Harbord took his case to Oxford County Court in February this year, and won.

The court found as follows:

Mr Harbord's flight was cancelled, not delayed.  This was because:

  • A flight from Manchester to Vancouver is not the same thing as a flight from Stansted to Vancouver.
  • A time differential of 24 hours is indicative more of cancellation than delay.
  • The fact that the flight had the same flight number had no bearing on the case. 

Thomas Cook was unable to rely on Recital 14 to the Regulation, which discusses the circumstances in which the "extraordinary circumstances" defence might be applicable on cancellation.  In particular, they were unsuccessful in arguing that the reference to "unexpected flight safety shortcomings" in Recital 14 could apply to a technical defect in one of their fleet, but not the aircraft scheduled to fly from Stansted to Vancouver, and thereby avoid paying compensation to passengers scheduled to fly to Vancouver from Stansted.  Airlines often shuffle their aircraft when one breaks down and then cancel the flight that will cause the least disruption to their schedule.  It was clear from the court's judgment in Mr Harbord's case that this strategy will not entitle airlines to avoid paying compensation to passengers on flights that did not actually suffer the relevant defect.  The Judge noted, further, that the Regulation's purpose is to protect the consumer; therefore the Recitals would be interpreted restrictively, to ensure the stated purpose is given effect.

No light touch for airlines

Mr Harbord's advice to passengers is that it is possible to take on airlines and to win and that no-one should go to the airport without a copy of the Regulation in their back pocket.  The judgment will be a rude awakening for airlines, who had hoped that the CAA's "light touch" approach would be mirrored by the courts.  It remains to be seen whether the approach taken by the Oxford County Court persists in future as more passengers bring similar claims to Mr Harbord's.  It is likely that airlines will increasingly pay passengers a minimum sum by way of settlement, and avoid the adverse publicity of going to court. Yet clarification of the extent to which the courts are prepared to open up claims in the name of passenger protection is needed by the airlines.  Only when that clarification is provided will the rights of those passengers, who lack the time and inclination to take the airlines to court, be properly protected.

For further information please contact Anna Maxwell


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