Airline Liability Roundup: Montreal Convention and Regulation 261/2004

Those who believe that the European Court of Justice invariably sides with consumers in cases between airlines and their passengers will be interested in a recent decision in a case against Altenrhein Luftfahrt GmbH. This followed a hard landing at on a short runway at an airport near Lake Constance. The passenger claimed to have suffered spinal injury and the question was whether this could amount to an ‘accident’ within the terms of the Montreal Convention. Both the first instance and Higher Regional Court in Austria that took the view that it could not: there was no evidence of pilot error and the landing had been within the structural limits of the aircraft. However the Austrian Supreme Court referred the question to the CJEU as to whether a hard landing, within the normal operating range of the relevant aircraft, could be classified as an ‘unforeseen, harmful and involuntary event’ – to adopt the CJEU’s own definition of ‘accident’ in Niki Luftfahrt (C-532/18).

YL -v- Altehnrhein Luftfahrt

Otherwise the CJEU applied a conventional analysis of article 17 of the Montreal Convention, but asked whether ‘unforeseen, harmful and involuntary’ should be considered from the perspective of the passenger or by reference to the normal operating range of the aircraft. The CJEU dismissed, in summary terms, the proposition that that it should at the addressed from the passenger’s perspective, because two different passengers could see the same events in different terms. The court also relied on the extent to which aircraft operations are regulated under EC Regulation 216/2008 and concluded that so long as the landing was within the limits which the landing gear and structural parts of the aircraft could absorb, according to the manufacturer’s specifications, it could not amount to an accident incurring liability on the part of the carrier.

YL-v-Altehnrhein Luftfahrt GmbH, 12 May 2021, Case C-70/20

Lipton v BA City Flyer

By contrast the English courts have been more passenger-friendly in two recent decisions on Regulation 261. The first, Lipton v BA City Flyer, was probably of less interest for its substantive outcome than for the Court of Appeal’s detailed consideration of the way Regulation 261 claims will operate in the UK following Brexit. The airline sought to defend a claim for compensation for delay on the basis that the Captain was unexpectedly unwell and this amounted to extraordinary circumstances. The court concluded that availability of crew was inherent to the airline’s operations and absence for sickness – whether the crew member became unwell while on or off duty – was not extraordinary. On that basis the Court of Appeal overturned the lower decisions.

The analysis of the future treatment of Regulation 261 claims involved detailed consideration of the European Union (Withdrawal) Act 2018, changes to Regulation 261 by the Air Passenger Rights and Air Travel Organiser’s Licensing (Amendment) (EU Exit) Regulations 2019 and article AIRTRN.22 on consumer protection in the Trade and Cooperation Agreement. Among others, the following principles will apply:

  1. Regulation 261 takes effect in English law as amended by the 2019 amendment regulation;
  2. It is given a purposive construction taking recitals into account;
  3. The process of interpretation includes provisions of international law incorporated into Regulation 261 by reference; and
  4. The meaning and effect of the regulation is determined by reference to European case law made before 31st December 2020, but the court can depart from retained CJEU caselaw and general principles where it considers it right to do so.

As it happened, in that instance, none of those principles caused any difficulty and indeed, on the debate as to whether the Regulation 261 should be applied in its original form or as amended by the 2019 amendment regulation, this too made no difference of substance.

Lipton & Anor v BA City Flyer Ltd, 30 March 2021, [2021] EWCA Civ 454

Varano v Air Canada

The second case addressed further permutations of delays to connecting flights, and the obligations of non-community carriers where operations outside the EU are disrupted. We have previously written, for instance, on Gahan v Emirates and Wegener v Royal Air Maroc. In Varano v Air Canada a deputy High Court Judge considered a non-EU carrier operating services from the UK to the US via Canada, where the passenger was to make a connection. The sector from Canada to the US was delayed because of a delay to the preceding flight, which was not the one on which the passenger travelled: the service from the UK to Canada was unaffected. The delay therefore occurred wholly outside the UK.

The decision in Varano contains a helpful analysis of many of the well known cases on Regulation 261 including Sturgeon v Condor, Nelson v Deutsche Lufthansa and Air France v Folkaerts. While acknowledging the similarities with the fact pattern in Gahan v Emirates, the Deputy High Court Judge acknowledged that the precise fact pattern had not arisen in any of the previous decisions.

The defendant airline submitted that Regulation 261 was extra-territorial in effect and that the EU did not have jurisdictional competence in relation to flights taking place wholly outside the EU. It sought to distinguish the other cases on such factors as involvement of community air carriers and whether or not the delay took place within the EU or on a flight on which the claimant actually travelled.

The Deputy Judge provided a valuable analysis of the position under English law and overruled the defendant’s submission that Lipton v BA City Flyer was wrongly decided insofar as claims decided after the end of the transition period should be decided on the basis of Regulation 261 as amended by the 2019 amendment regulation. Again, that distinction does not appear to have been material but it is useful for future cases to have these issues clearly discussed. Cases under the amended Regulation 261 ought to be decided by reference to relevant retained case law and retained general principles of EU law, with regard to the limits of EU competence immediately before the end of the transition period. In this instance, the claim was subject to amended Regulation 261 since a series of directly connecting flights started from Heathrow, just as in Gahan v Emirates, and were sufficiently late at the final destination that compensation was indeed payable. That analysis was consistent with subsequent CJEU decisions in Wegener and Ceske Aerolinie, The issues on extraterritoriality had also been addressed in Gahan. The Deputy Judge was unconvinced that it is relevant a Belgian court had referred similar facts to the CJEU and this is yet to be determined. Similarly, arguments of the potential exposure of a defendant airline to double regulation in the light of the new Canadian Air Passenger Protection Regulations could be resolved as and when they arose by reference to the approach of the CJEU in R (Air Transport Association of America and others) v Secretary of State for Energy and Climate Change (Case C-366/10).

So, in this instance the claimant was entitled to compensation, after an appeal which involved submission of 1,500 pages of case law from 49 different authorities. If there is one change as a result of Brexit, it is that her compensation was denominated in sterling rather than Euros.

Varano v Air Canada, 17 May 2021, [2021] EWHC 1336 (QB)

UK COVID-19 Charter

In April 2021 the UK Global Travel Task Force (GTTF) report recommended a passenger COVID-19 charter to be published by 17th May when a number of restrictions on travel were lifted. The charter is a mode-agnostic document aimed at providing clarity for passengers and industry. In large part it is an index to more detailed documents setting out rights, responsibilities and processes applicable to individual modes of transport and matters such as travel restrictions, requirements for tests, vaccinations and isolation. However the document does also reiterate issues such as the right to refunds, refreshment and assistance in the event of delays, assistance to passengers with special needs and data protection obligations. It does not set out additional rights but also refers to the GTTF’s recommendation for a consultation later this year on more modern and flexible tools to enforce consumer rights.

Passenger COVID-19 Charter, Department for Transport, May 2021, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/986895/passenger-covid-19-charter.pdf

WZ v Austrian Airlines

As we go to press we have seen reports of a CJEU judgment dated 22 April 2021 against Austrian Airlines. The CJEU concluded that a diversion to an airport near to the intended destination does not, of itself, give rise to a right for compensation for cancellation. The flight in question had diverted from Berlin Tegel to Berlin Schonefeld due to weather conditions. At the time of writing no English judgment is available and we will report more fully in due course.

WZ v Austrian Airlines, 22 April 2021, Case No C-826/19

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