Passengers of severely delayed flights may claim compensation from airlines, unless the airline shows the delay was due to “extraordinary circumstances”. One year ago, on 11 June 2014, the English Court of Appeal in Huzar v Jet2.com limited the scope of this “extraordinary circumstances” defence. It is now a year on and compensation claims have been slow to take off. The legal representative of the Claimant in that case has recently stated that 19,500 delayed passengers are still miles away from receiving their €8.35 million in compensation.
The decision was reached in deference to Regulation (EC) No 261/2004 of 11 February 2004 which establishes common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights. Under the Regulation, in keeping with its core principle of passenger-rights protection, airline passengers are entitled to the right to care and the right to reimbursement or rerouting in the event of flight delays. Fuelled by the Regulation, the European Court of Justice (ECJ) expanded passenger rights in 2009 by affording those who are delayed for three hours or more with an additional right to compensation, except where the delay is caused by “extraordinary circumstances” (Sturgeon v Condor Flugdienst GmbH and Böck and Lepuschitz v Air France).
Despite backlash from airlines, what constitutes an “extraordinary circumstance” for the purposes of the defence has been significantly narrowed over time. As a starting point, the Regulation provides that extraordinary circumstances are those which “could not have been avoided even if all reasonable measures had been taken”; for example “cases of political instability, meteorological conditions incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcoming and strikes that affect the operation of an operating air carrier.”
The ECJ in Sturgeon developed that definition, and ruled that technical faults do not come within the scope of the defence “unless that [technical] problem stems from events which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control.”
The Court of Appeal in Huzar reiterated that judgment and held that “ordinary technical problems that cause flight disruption, such as component failure and general wear and tear, should not be considered ‘extraordinary circumstances’” since they are “inherent in the normal exercise of the carrier’s activity.” Lord Justice Elias assessed that terrorism, strikes, air traffic control problems and freak weather are sufficiently “beyond the control of the airline” to be considered “extraordinary circumstances.”
The ECJ had previously taken a similar line of reasoning in 2008 in Friederike Wallentin-Hermann v Alitalia-Linee Aeree Italiane SpA; judging a circumstance to be extraordinary where its prevention would require the air carrier making “intolerable sacrifices in the light of the capacities of its undertaking at the relevant time” even with the deployment of “all its resources in terms of staff or equipment and the financial means at its disposal.”
Despite the judgment being received loud and clear, many delayed passengers’ claims remain grounded. Meanwhile, airlines continue to persistently, but unsuccessfully, challenge the decision. In October 2014, the Supreme Court refused permission to appeal the Huzar decision on the grounds that “it is not necessary to request the Court of Justice to give any ruling, because the Court’s existing jurisprudence already provides sufficient answer.” Later, in February 2015, the Liverpool County Court denied five airlines permission to stay the settlement of compensation claims pending a decision from the ECJ in the Van Der Lans case, which will consider whether sudden and unexpected technical defects constitute extraordinary circumstances. The Judge refused to depart from the Court of Appeal’s binding decision and from the now well-settled existing passenger rights rules.
The implications of the decision in Huzar are significant for the entire airline industry in that the floodgates for compensation claims for delays have been thrown wide open. Which? has estimated that 30% of passengers experience delays every year; which may be as many as 3.27 million. In addition to the pressure of these claims, airlines will also be propelled into a backlog of millions of historic claims as a result of the 2014 Court of Appeal decision in Dawson v Thomson Airways Ltd where it was held that passengers now have six years to bring a compensation claim for delays. With compensation of up to €600 per person being available under the Regulation for delays of three hours or more, airlines’ delaying tactics are not at all surprising.
The impact of the decision will not be without detriment to passengers either. Aviation experts and airlines have cautioned that the cost of funding the accelerating influx of compensation claims is simply unsustainable under current business models, and therefore that fares across the industry are inevitably set to soar sky-high in order to cover the liability.
Although the Court of Appeal in Huzar had clearly sought to protect passenger rights in line with the Regulation, it looks as though passengers are winging their way towards indirectly bearing the costs of their own compensation claims in the future as airlines thrust the burden back onto the customer.