Introduction

Article 7 of EU Regulation 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights provides as follows:

"1. Where reference is made to this Article, passengers shall receive compensation amounting to:

(a) EUR 250 for all flights of 1500 kilometers or less;

(b) EUR 400 for all intra-Community flights of more than 1500 kilometers, and for all other flights between 1500 and 3500 kilometers;

(c) EUR 600 for all flights not falling under (a) or (b).

In determining the distance, the basis shall be the last destination at which the denial of boarding or cancellation will delay the passenger's arrival after the scheduled time.

2. When passengers are offered re-routing to their final destination on an alternative flight pursuant to Article 8, the arrival time of which does not exceed the scheduled arrival time of the flight originally booked

(a) by two hours, in respect of all flights of 1500 kilometers or less; or

(b) by three hours, in respect of all intra-Community flights of more than 1500 kilometers and for all other flights between 1500 and 3500 kilometers; or

(c) by four hours, in respect of all flights not falling under (a) or (b), the operating air carrier may reduce the compensation provided for in paragraph 1 by 50%.

3. The compensation referred to in paragraph 1 shall be paid in cash, by electronic bank transfer, bank orders or bank cheques or, with the signed agreement of the passenger, in travel vouchers and/or other services.

4. The distances given in paragraphs 1 and 2 shall be measured by the great circle route method. "

In relation to delayed flights, Article 6 of the regulation provides:

"1. When an operating air carrier reasonably expects a flight to be delayed beyond its scheduled time of departure:

(a) for two hours or more in the case of flights of 1500 kilometres or less; or

(b) for three hours or more in the case of all intra-Community flights of more than 1500 kilometres and of all other flights between 1500 and 3500 kilometres; or

(c) for four hours or more in the case of all flights not falling under (a) or (b),

passengers shall be offered by the operating air carrier:

(i) the assistance specified in Article 9(1)(a) and 9(2); and

(ii) when the reasonably expected time of departure is at least the day after the time of departure previously announced, the assistance specified in Article 9(1)(b) and 9(1)(c); and

(iii) when the delay is at least five hours, the assistance specified in Article 8(1)(a).

2. In any event, the assistance shall be offered within the time limits set out above with respect to each distance bracket. "

These provisions make no reference to Article 7.

Therefore, a strict reading of the regulation would suggest that passengers whose flight has merely been delayed are not entitled to receive compensation. They should only be offered assistance in accordance with Articles 6 and 9 (ie, meals and refreshments, hotel accommodation if necessary, transport between the airport and the accommodation and two telephone calls, telex or fax messages or emails).

Notwithstanding this straightforward legal framework, the European Court of Justice (ECJ) held in the (in)famous Sturgeon ruling (Joined Cases C‑402/07 and C‑432/07) that:

"Articles 5, 6 and 7 of Regulation EC 261/2004 must be interpreted as meaning that passengers whose flights are delayed may be treated, for the purposes of the application of the right to compensation, as passengers whose flights are cancelled and they may thus rely on the right to compensation laid down in Article 7 of the regulation where they suffer, on account of a flight delay, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier."

In other words, with this ruling the ECJ aligned the legal regime in relation to delays equal to or in excess of three hours with the legal regime applicable to cancellation. Airlines are not liable if they can demonstrate that the delay is attributable to extraordinary circumstances in accordance with Article 5(3) and Recital 14 of the regulation.

Sturgeon was upheld in joined cases Nelson (C-581/10) and TUI Travel (C-629/10) on October 23 2012.

Despite these rulings, some French courts have still applied a strict interpretation of the regulation and its narrow legal regime in respect of delayed flights, and have refused to apply Sturgeon. However, in a January 15 2015 judgment (13-25351) the First Civil Chamber of the Court of Cassation finally aligned its case law on Sturgeon and Nelson-TUI Travel.

Facts

Two passengers booked tickets on a Paris-Miami flight, which arrived at Miami six hours late (the causes of the delay were not specified in the judgment). The passengers sued the air carrier before a local small claims court in order to obtain €600 compensation each under Article 7(1) of the regulation.

The court dismissed the action on the grounds that the regulation provides no compensation in relation to delayed flights.

The plaintiffs lodged a direct appeal with the Court of Cassation (local small claims judgments may be appealed only to the Court of Cassation, which can rule only on issues of law, not on the facts).

Decision

On January 15 2015 the Court of Cassation overturned the first-instance decision.

In its ruling the court expressly referred to Sturgeon and Nelson – in fact, it almost quoted theSturgeon decision.

It held that Regulation 261/2004 must be interpreted as meaning that passengers whose flights are delayed have a right to compensation when the loss of time equals or is in excess of three hours – that is, where the passengers reach their final destination three hours or more after the arrival time originally scheduled by the air carrier.

Comment

This decision endorses Sturgeon and Nelson, but provides no further comment on the relevance of the ECJ case law.

It is regrettable that the Court of Cassation did not use this opportunity to consider whether the right to compensation provided under Article 6 of the regulation could be validly extended to delayed flights even though Article 7(1) does not provide this right.

The Court of Cassation usually refers to and applies the ECJ's interpretation of an EU norm when the question has been referred to the ECJ for a preliminary ruling. In this case, therefore, the French court appeared to consider that the ECJ rulings were binding even though the request for preliminary ruling was made by another EU state court.

The ruling is obviously unfavourable for EU carriers and those operating from EU airports.

However, it was not entirely unexpected. In fact, the draft revised regulation provides for a right to compensation in relation to delayed flights, but (as per Memo-13-203 of the European Commission) the thresholds for compensation will be slightly different:

five hours for all intra-EU flights and short international flights of less than 3,500 kilometres (km);

nine hours for flights of less than 6,000km; and

12 hours for flights of more than 6,000km.

Before the revised regulation comes into force (and even afterwards, as the draft provides for an extraordinary circumstances defence), air carriers may still be able to defend passenger claims for compensation by demonstrating that the delay has been caused by extraordinary circumstances.

Although the interpretation may vary from case to case or from one court to another, the French lower courts generally consider that, among other things, meteorological conditions, air traffic control decisions or sudden mechanical failure (different from technical problems identified during routine aircraft maintenance) could amount to such circumstances. Under ECJ case law the air carrier must prove that the circumstances involved were at least unforeseeable and unavoidable – that is, akin toforce majeure. It must also demonstrate what reasonable measures were taken to avoid the disruption or to mitigate the consequences for the passengers.

With this decision the French courts have confirmed their tendency to favour consumers in the carriage of passengers by air. This trend may be seen to echo the EU authorities' manifest satisfaction over the evolution of Regulation 261/2004, which they have publicly proclaimed to be "one of the resounding achievements of EU transport policy". That this 'achievement' should also benefit – to a disproportionate extent – private companies which specialise in seeking out and pursuing passengers' claims against air carriers may perhaps be seen as a regrettable development.

For further information on this topic please contact Jean-Baptiste Charles or Olivier Purcell at Holman Fenwick Willan France LLP by telephone (+33 1 44 94 40 50) or email (jbc@hfw.com oromp@hfw.com). The Holman Fenwick Willan France LLP website can be accessed at www.hfw.com.

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