17 September 2020 | Simon Phippard Of Counsel, Lucy England Partner, Luke Wilcox Partner

Amongst a growing body of case law on Regulation (EC) 261/2004, the ruling of the Court of Justice of the European Union in NM, acting as liquidator of NIKI Luftfahrt GmbH v ON considered the responsibilities and liabilities of a carrier providing accommodation for a passenger whose flight had been cancelled, under Article 9(1)(b) of Regulation 261. Helpfully for airlines, the court concluded that a carrier will not be liable for the negligence of the staff at the provided hotel, as this would be beyond their responsibilities under the Regulation.

Background

The claimant's flight from Mallorca (Spain) to Vienna (Austria) was cancelled. While awaiting a rebooked flight the next evening, the carrier provided the claimant with free accommodation pursuant to its obligations under Article 9(1)(b) of Regulation 261.

The claimant was seriously injured following a fall at the hotel. She brought a claim for damages against the carrier, arguing that her injuries were as a result of the negligence of the staff at the hotel provided, and that this was the carrier’s responsibility.

Referral to the Court of Justice of the European Union

The referring court asked the CJEU to consider two questions relating to a carrier’s obligations under Article 9(1)(b) of Regulation 261. First, is a carrier liable for damage suffered as a result of the negligence of staff at the hotel provided under the Regulation? If the answer to this was no, the CJEU was asked to consider the extent of a carrier’s obligations in these situations, and whether they were limited to only providing the hotel and covering the costs of it.

The CJEU’s ruling

The court began with the second question, as determining the extent of a carrier’s obligations was a prerequisite to the first question. The objective of Regulation 261 is to provide a high level of protection for passengers. In particular, carriers must ensure that passengers whose flights have been cancelled are adequately cared for while awaiting a later flight. However, requiring a carrier to take care of, and responsibility for, the accommodation arrangements was deemed to be outside of this objective. Therefore, the obligation on a carrier is limited to selecting a hotel and offering it to the passenger free of charge.

Applying this conclusion, the court was able to offer a simple answer to the first question: where a carrier offers a passenger hotel accommodation in line with the requirements of Article 9(1)(b) of Regulation 261, the carrier cannot be required to compensate the passenger for damages caused by a fault on the part of the employees of that hotel.

Comment

Although this judgment gives carriers confidence that they will not be held liable for the negligence of staff at the hotels they provide for passengers, there is still a need for caution. The court made it clear that this judgment does not always remove a carrier’s liability when they offer a passenger a free hotel. Where a passenger has reduced mobility, or is an unaccompanied child, regard must also be had for a carrier’s obligations under Article 9(3) of Regulation 261. Whilst this does not create liability for a carrier, it requires them to select the hotel carefully having ascertained that it can meet the reasonable expectations of quality and safety with regards to the needs of that passenger.

This ruling will also be of interest to hotels in assessing whether it can pass any liability on to carriers if there is a relationship between the hotel and airline.


About the Authors

simon phippard module

Simon Phippard
Of Counsel
As an Of Counsel in our Aviation & Aerospace practice in London, I bring more than 25 years' commercial and litigious experience to a diverse array of aerospace issues.

Direct: +44 (0)20 7415 6000

[email protected]
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Lucy England
Partner
I'm a London-based commercial lawyer specialising in aviation & defence and projects work and I'm a partner here in Bird & Bird's Commercial group. I work with clients to help them find solutions to their commercial challenges.

Direct: +44 (0)20 7415 6000

[email protected]

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