Peggy Sharon Keren Marco October 26 2022 Who is an "organiser" under the ASL and when are exemplary damages applicable? Levitan, Sharon & Co | Aviation - Israel Peggy Sharon, Keren Marco Aviation BackgroundFactsDecisionThe Petach Tikva Magistrates' Court recently denied a claim filed by 64 claimants after their flight from Tel Aviv, Israel, to France was delayed.(1) The claimants had purchased their tickets for the flight from a company that organises ski trips.BackgroundThe Aviation Services Law (Compensation and Assistance due to Flight Cancellation or Change in its Condition) 2012 (ASL) imposes liability on the "operator" and the "organiser" of a flight:"Operator" is defined by the ASL as the operator of an aircraft for the purpose of transporting passengers and their luggage, for reward, from Israel, to it or within its area."Organiser" is defined by the ASL as a person who leases capacity of an aircraft, fully or partially, to transport passengers and their luggage, for the purpose of selling it to others.FactsThe claimants (ie, the 64 passengers) filed a claim against the company Skideal. The company had sold the claimants a seven-day ski package deal in France, which included the flight from Israel to France.The flight was operated by a Polish airline, Enter Air, and was due to take off at 11:55am from Tel Aviv and land at 15:35pm in Grenoble, France.After the passengers boarded the aircraft, it transpired that there was a technical malfunction, which caused a delay. At first, the passengers were informed that they would have to wait until the aircraft was repaired. Later, they were advised that they would need to wait several hours for the aircraft to be replaced by another aircraft from Poland.While waiting at the airport, the passengers received a meal voucher.The claimants argued that they had arrived at the ski site at 5:00am the next day, thus missing one day of their vacation.The claim was filed for 4,000 new Israeli shekels for each claimant, comprising 2,080 new Israeli shekels in statutory compensation. The rest constituted exemplary damages according to article 11 (and article 7) of the ASL for breach of the duty of disclosure, according to which the operator or organiser is obliged to inform passengers about their rights according to the ASL in case of a flight delay or cancellation.Skideal filed a third-party notice against Tevel Tourism and Aviation Services Ltd, which allegedly act as the representative of Enter Air in Israel.DecisionIs Skideal considered an organiser? As Skideal is neither an airline nor an operator, the question arose as to whether it was considered to be an "organiser" according to the ASL.Based on the evidence presented and witness testimonies, the Court determined that Skideal had purchased part of the aircraft's capacity. Therefore, it was considered to be an organiser and was subject to the obligations imposed by the ASL.Was the flight cancelled?As the above question was answered in the affirmative, the Court addressed the question of whether the flight should be considered to be a cancelled flight, which would entitle the claimants to damages according to article 6 of the ASL.The claimants' lawyer raised two arguments to support their position that the case involved a flight cancellation rather than a flight delay – namely:the flight departed at 19:55pm, which was eight hours later than the scheduled departure time; andthe final destination was changed. Originally the flight was scheduled to land at Grenoble, France, but ended up landed in Lyon, France.The Court stated that, according to the ASL, a flight would be considered as cancelled if it:did not take place at all; ortook off with a delay of at least eight hours.The Court reached the conclusion that a change in the final destination did not indicate that the flight should be considered a "cancelled flight". The Court examined this issue in relation to several clauses of the ASL in which there is reference to the final destination, and stated that the final destination relates to the operator's/organiser's various other obligations under the law. The final destination was thus defined by the law for other purposes and not for defining a cancelled flight.As to the question of whether the flight was delayed at least for eight hours, the defendant and the third party presented evidence that the plane's wheels disconnected from the ground at 19:42pm. Therefore, the delay was less than eight hours.The Court thus concluded that the flight was not considered to be a cancelled flight according to the ASL, but rather a delayed flight. In view of this, the claimants were not entitled to statutory compensation under article 6 of the ASL, as this requires the flight concerned to be cancelled.Duty of disclosureFinally, the Court addressed the issue of whether the claimants were entitled to exemplary damages.The claimants argued that Skideal had not informed them about their rights to choose between a refund and an alternative flight ticket. Skideal responded that there was no active obligation to inform the passenger and that it was sufficient that an alternative ticket had been issued.The Court accepted the claimants' position in this respect – that is, that the organiser was obliged to actively inform the passengers of their rights.The Court stated that it was necessary to take into account that the passengers had arrived at the airport with no knowledge about the flight and that they were not aware of their legal options. This information was held by the operator/organiser. The purpose of the law is to mitigate the knowledge gaps between the parties and, therefore, the operator/organiser was required to provide the passengers with the full information. Article 7(b) of the ASL grants the passenger the right to choose between a refund or an alternative ticket. How can the passenger make their choice if the options are not presented to them?The Court reached the conclusion that, under the circumstances of this case, Skideal had breached its obligation under the ASL to inform the claimants about their rights.A question arose as to whether the claimants were entitled to exemplary damages, bearing in mind that article 11 of the ASL leaves this question for the Court's discretion. The Court determined that there was no basis to oblige Skideal to pay exemplary damages in this case.The Court stated that the breach in this case was minor. This was not a breach of the obligation to provide assistance services, or to provide an alternative flight ticket, but only a breach of the duty to notify the passengers of their rights to choose between a refund and an alternative ticket.The Court further stated that claimants had only argued for the breach of the disclosure obligation and that they had not argued that, had they been offered a choice, they would have chosen the refund. In addition, besides the flight ticket, the claimants had booked the hotel and ski passes for six days and that choosing the refund only for the flight ticket would have required them to find another way to reach their destination, an option which had not been explored by the claimants and had only been alleged in retrospect.In addition, the Court stated that it did not consider that Skideal had ignored its duties under the law. In this case, the operator had taken the necessary steps to find a solution – first by trying to repair the malfunction and then by bringing another aircraft and providing assistance services – and Skideal had been constantly updated. Furthermore, Skideal had organised transport after landing at the site, provided the passengers with food and beverages, and given them updates concerning the delays. It was not argued nor proven that the companies had repeatedly breached their obligations.Imposing exemplary damages is aimed, among other things, at enforcing the law, deterring operators from breaching their obligations and encouraging passengers to realise their rights, taking into account the severeness of the breach.After considering all the above aspects, there was no basis to impose exemplary damages. Therefore, the claim was dismissed and so was the third-party notice.Due to the claimants' loss of enjoyment of one skiing day, no costs were imposed on them by the Court.For further information on this topic please contact Peggy Sharon or Keren Marco at Levitan, Sharon & Co by telephone (+972 3 688 6768) or email ([email protected] or [email protected]). The Levitan, Sharon & Co website can be accessed at www.israelinsurancelaw.com.Endnotes(1) CF 63685-01-20 Tal Lev Ari and 63 Others v Skideal Ltd.