In a recent judgment, the European Court of Justice examined a matter of considerable practical interest to all companies that need their employees to travel on business trips.
With respect to the maritime cluster, suffice it to think about a crew or maintenance staff travelling to/from docking ports from/to the vessel on which they serve.
The damage arising from such delay, in the event that a crew, or worse, a maintenance team, needs to be replaced, certainly has a very strong impact on management.
The question submitted to the ECJ concerns the interpretation of Articles 19, 22 and 29 of the Montreal Convention for the Unification of Certain Rules Relating to International Carriage by Air, seeking clarification as to whether an employer who bought air tickets for his employees is entitled to obtain compensation for damages suffered in the event of a flight delay.
According to the ECJ – as briefly described below –, the employer is actually entitled to claim damages.
The case relates to proceedings between Air Baltic Corporation AS and Lietuvos Respublikos specialiuju tyrimu tarnyba (the “Special Investigation Service of the Republic of Lithuania”), concerning compensation claimed by the latter for damage occasioned by the delay of flights carrying two of its agents under an international agreement entered into with Air Baltic Corporation AS.
The flight delay - exceeding 14 hours - suffered by the employees also had consequences on the professional mission of the persons concerned and the Investigations Service complied with its obligations by paying them, in accordance with Lithuanian law, daily allowances and supplementary social security contributions. Then the Investigations Service brought an action for damages before the Vilnius Court, which upheld its claim at first instance. Such decision was confirmed at second instance too.
Finally, Air Baltic Corporation AS brought the case to the Supreme Court (Lietuvos Aukščiausiasis Teismas, “Supreme Court of Lithuania”), arguing in its defence that a legal person is not entitled to invoke the air carrier’s liability, which, allegedly, can only be invoked in respect of the passengers concerned.
The Supreme Court of Lithuania then decided to refer the matter to the European Court of Justice.
The decision of the European Court of Justice
After having examined the case, the ECJ declared that the Convention for the Unification of Certain Rules for International Carriage by Air concluded at Montreal and, namely, Articles 19, 22, 29 thereof, must be interpreted as meaning that an air carrier which has concluded a contract of international carriage with an employer of persons carried as passengers is liable to that employer for damages occasioned by a delay in flights on which its employees were passengers pursuant to that contract as well as for the additional expenditure incurred by the employer.
The ECJ found that damages should be paid to the employer in light of the above-mentioned provisions, as they do not specify whom may have suffered damage. Therefore, the Convention should be interpreted by referring to the notion of “consumer”, which is not necessarily limited to passengers themselves.
The judgment of the ECJ is likely to trigger a new era of litigation, which will probably be mitigated by insurance cover being extended to include the further risk for air carriers dealt with here.
One thing is for sure: from now on, damage incurred by an employer has more chance to be compensated.