The recent Court of Appeal’s decision in Limited v Ronald Huzar awarded a passenger compensation for the delay he suffered as a result of the aircraft’s technical problems. These technical problems were not found to fall within the “extraordinary circumstances” exception of the EU denied boarding regulations (Regulation (EC) No 261/2004) and has led to speculation that the decision could open the floodgates to claims for compensation.

Case facts

As a result of a wiring defect in the aircraft, Mr Huzar’s flight from Malaga to Manchester was delayed by 27 hours. Mr Huzar claimed compensation of €400 for the delay under Article 7(1)(b) of Regulation 261. (Jet2) refused to pay this compensation on the basis that as the defect could not have been prevented or detected, it fell within the Article 5(3) exception. In summary, Article 5(3) provides that compensation is not payable where the cancellation (or delay1):

“…is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.”

At first instance, the County Court judge held that the technical problem did constitute an “extraordinary circumstance” and refused compensation. On appeal by Mr Huzar to the High Court, it was held by the court that the exception did not apply and so compensation was awarded. On further appeal by Jet2, the Court of Appeal agreed that the technical problem did not constitute an “extraordinary circumstance”, and so awarded compensation. However, the Court of Appeal disagreed with the reasoning given in the second decision.

The test as to whether an event constituted an “extraordinary circumstance” was set out by the Court of Justice of the European Union (CJEU) in the Wallentin-Hermann case2 and is as follows:

  1. the nature or origin of the event or events that caused the technical problem were not inherent in the normal exercise of the activity of the carrier; and
  2. that it should be beyond its actual control.

The Court of Appeal agreed with the CJEU that difficult technical problems will arise as a matter of course from the ordinary operations of the carrier and while these may or may not be foreseeable, crucially, they are all inherent in the normal exercise of the carrier’s activity (namely, flying passengers), in that they originate from the activity and are part of the wear and tear.

The judges also rejected Jet2’s argument that an unforeseen technical problem would constitute an unexpected flight safety shortcoming (identified in Recital 14 of the Regulation 261 as a potential extraordinary circumstance). On the contrary, the judges commented that a technical problem may be unforeseeable, but that did not mean it was unexpected.

Therefore, in summary, when considering whether the extraordinary circumstances exception applies, the Court has to focus on the source of the event which caused the technical problem rather than its resolution. An event will be within the control of the carrier if it is part of the normal activity being carried on and it will be outside the carrier’s control if it is not part of that normal activity. So acts of third parties, for instance terrorist acts, air traffic control strikes, or freak weather are not inherent in the normal activities of the carrier and are likely to satisfy the test for extraordinary circumstances.

The Court of Appeal was of the view that had Regulation 261 intended to relieve a carrier from paying compensation if it was not at fault, then it could easily have been drafted in such a way so as to provide for this. Rather, the Court of Appeal had regard for the wider purpose of Regulation 261, which was to compensate passengers for inconvenience and felt that it was far from self-evident that such compensation should be limited to incidents where the carrier was at fault.

In practice, if the volume of compensation claims do increase significantly, this may impact how airlines price their fares.

This decision makes it harder for airlines to claim that cancellations or delays were as a result of extraordinary circumstances and so the volume of compensation claims may well increase. However, for events truly outside the control of the airline (which, by their nature, are likely to impact other carriers too), the exception of extraordinary circumstances remains.