European Parliament proposes enhanced sanctions to enforce implementation of Regulation 261 on air passenger rights

By Simon Phippard, Rachel Welch Phillips

01-2019

Air passenger consumer rights and Regulation 261 continue to make the headlines with further cases and continued debate over the balance between passengers and airlines. At the request of the European Parliament's Committee on Petitions (PETI), the European Parliament (EP) published a briefing in November 2018 on the implementation of Regulation 261/2004 (the Regulation) on air passenger rights.

The EP briefing assesses the key barriers to the enforcement of citizens' rights in the implementation and application of the Regulation. The report concludes that there are a number of key barriers to enforcement and implementation, particularly in relation to compensation for delay, cancellation or denied boarding. These include:

  1. The interpretation of the 'extraordinary circumstances' defence
  2. Sanctioning regimes within Member States are not strong enough to incentivise compliance and are not systematically imposed
  3. Variation in enforcement systems across the EU undermines the single aviation market and contributes to non-compliance
  4. Low passenger awareness of their rights and knowledge on how to obtain redress
  5. Although the passenger rights provided in the Regulation are well-developed, the means for passengers to obtain the benefit of them require considerable effort

On the other hand, the briefing describes the establishment of Alternate Dispute Resolution mechanisms as a success. These have provided effective, low cost avenues for resolving disputes arising under the Regulation.

Extraordinary circumstances

This is one of the key "grey areas" within the legislation and the case law adding to the complexity of its enforcement and implementation. Currently, there is insufficient European case law comprehensively addressing the ambiguities that exist when determining what constitutes an extraordinary circumstance. The EC Interpretative Guidelines (though not legally binding) offer some assistance in this area but there is still a significant gap when applying this guidance to real-life scenarios with their own facts and circumstances.

The EP suggests that local aviation authorities should play an increasing role in clarifying the rights of passengers under the Regulation. This has begun to happen in relation to particular circumstances. For example in July 2018 the UK Civil Aviation Authority published a press release outlining the rights of passengers who were affected by the disruptions to air travel brought about by the Ryanair strikes. The UK CAA is now bringing an enforcement claim against Ryanair for their failure to pay compensation to passengers affected by their employees' industrial action. It also made a prompt announcement about the effect of the drone incident at Gatwick just before Christmas 2018. However smaller scale disruptions would be supported by further clarification on areas of uncertainty in the application of the Regulation.

Sanctioning regimes and enforcement systems

The EP suggests that in order for national enforcement to incentivise compliance with the Regulation, a staged approach should be undertaken, whereby Member States escalate intervention as non-compliance continues or worsens. Intervention could begin with persuasion, followed by a warning letter, then a civil penalty, a criminal penalty and ultimately, the suspension or revocation of an air carrier's licence to operate. If systematically applied, such robust penalties are thought likely to increase compliance with the Regulation, and serve the dual purpose of more clarity as to the events which trigger an entitlement to compensation and an understanding of both airlines' and passengers' rights and entitlements.

Passenger knowledge and redress

The Regulation relies on passenger awareness of their rights in order to enforce them, as there is no obligation on air carriers to compensate a passenger for delay or cancellation where a request for compensation has not been made. The EP believes that the various conditions and exceptions within the Regulation are also not fully understood which can lead to passenger expectations exceeding their entitlements. This can result in the unnecessary use of resource to reject claims as well as incidents of alternative dispute resolution that arise from a lack of knowledge of the passenger.

That being said, airlines such as Ryanair have stated that they are exploring whether payment of compensation should be made automatic so as to reduce the administrative burden on both the air carrier and the passengers. Consumer body Which? in the UK is also calling for this to be the required practice under the Regulation in the UK.

In conclusion, the EP briefing identifies key issues that arise in the implementation and enforcement of the Regulation and lays out recommended practices to be adopted by Member States in collaboration with airlines to create more efficiency in the implementation and enforcement of the Regulation.

Amendment

Given the uncertainties which were well ventilated during the Regulation's first eight years, the Commission published a proposed amendment in 2013. Broadly, this was well received by the Parliament but a number of issues remained unresolved. We understand the legislative process is stalled pending disputes over application to Gibraltar which may be resolved only on the UK's departure from the EU. For the UK, the continued application depends very much on the shape of the UK's continued relationship with EU27.