Background
Legal context
Liability
Comment
Background
In common with many European countries, towards the end of 2010 Germany experienced freezing temperatures and, in December 2010, heavy snowfall. As a result, many airlines suffered considerable flight delays and cancellations. Not all these cancellations were directly due to the weather conditions; some resulted from the fact that aircraft could not be de-iced by ground-handling operators because they had run out of de-icing fluid stocks.
Article 5(1)(c) of the EU Denied Boarding Regulation (261/2004/EC) states where a flight is cancelled, the passengers concerned have the right to compensation from the operating air carrier in accordance with Article 7 of the same regulation.
In this light, the question arises as to whether air carriers can claim damages from ground-handling companies, and if so, whether justified compensation according to Articles 5 and 7 of the regulation falls into this category of damages.
Legal context
Most air carriers and ground-handling companies cooperate according to the terms of the International Air Transport Association Standard Ground-Handling Agreement. Article 8 of the main agreement provides an indemnity clause for the ground handler, as follows:
"8.1 Except as stated in Sub-Article 8.5, the Carrier shall not make any claim against the Handling Company and shall indemnify it (subject as hereinafter provided) against any legal liability for claims or suits, including costs and expenses incidental thereto, in respect of:
(a) delay, injury or death of persons carried or to be carried by the Carrier;
(b) injury or death of any employee of the Carrier;
(c) damage to or delay or loss of baggage, cargo or mail carried or to be carried by the Carrier, and
(d) damage to or loss of property owned or operated by, or on behalf of, the Carrier and any consequential loss or damage;
arising from an act or omission of the Handling Company in the performance of this Agreement".
Thus, the liability privilege takes effect only if damage arises from an act or omission on the part of the ground-handling company. The term 'act or omission' includes negligence. Therefore, in general, ground-handling companies are not liable.
The exception to this rule applies where the ground operator:
- intends to cause damage, death, delay, injury or loss; or
- acts recklessly and with the knowledge that damage, death, delay, injury or loss is likely to result.
Thus, if the ground operator running out of de-icing fluid is considered a 'reckless act', with the knowledge that delay or loss will probably result, the ground operator is liable to the air carrier.
Liability
For several weeks air temperatures were below zero degrees. There was no sudden cold snap; therefore the ground-handling companies cannot be relieved of liability on the grounds that they lacked forewarning. According to the Standard Ground-handling Agreement, ground-handling companies are committed to de-ice carriers' aircraft. They have the appropriate expertise with regards to the quantities of de-icing fluids needed and, therefore, bear the risk of stocking such quantities.
In addition, December is in the peak season for de-icing. It is to be expected that the delivery of de-icing fluid may be delayed due to snow or ice. The de-icing obligation is directly connected to this risk, and so ground-handling companies must expect delays in the delivery of de-icing fluid and allow a generous timeframe for its sourcing.
If ground handlers fail to stock sufficient de-icing fluid or allow enough time to procure more stock, bearing in mind the weather conditions, they act in a grossly negligent manner and are subject to liability. In such circumstances ground-handling companies cannot rely on the Article 8 of the main agreement's liability privilege.
Where Article 8 is not effective, and assuming that the parties have agreed that the Standard Ground-Handling Agreement is to be governed by and interpreted in accordance with German law, the carrier can claim compensation for 'impossibility of accomplishment'. Where adequate de-icing can be seen to be impossible, no deadline for the correction of the defect is necessary since the ground-handling company is not obliged to de-ice.
Comment
In general, the ground-handling company is liable to the carrier for damages in respect of cancellations caused by its inability to de-ice the relevant aircraft, despite being fully aware of the weather conditions. Such failure is deemed to be grossly negligent. Where the carrier cannot invoke extraordinary circumstances as defined in Article 5(3) of the regulation, compensatory claims in accordance to Article 7 of the regulation are to be expected. The carrier may demand these compensatory claims from the ground-handling company. Moreover, compensation may also be claimed for loss of profit and for additional costs incurred as a result of having to provide flight crews for aircraft which were ultimately unable to take off.
The carrier can subrogate against the ground-handling company because the liability privilege stipulated in Article 8 of the main agreement does not apply, since the ground-handling company acted with gross negligence. In particular, carriers whose planes have been grounded due to the ground-handling companies' failure to de-ice aircraft can claim compensation from the ground-handling company in order to cover the cost of expected compensatory claims from passengers under the EU Denied Boarding Regulation, and for loss of profit.
For further information on this topic please contact Ulrich Steppler or Mareike Münnig at Arnecke Siebold by telephone (+49 69 97 98 85 0), fax (+49 69 97 98 85 85) or email ([email protected] or
[email protected]).