European airlines are bracing themselves this morning for the ECJ's judgment in the joined cases of TUI and Nelson (Cases C-581/10 and C-629/10) – expected at 9.30am. This will confirm whether or not airlines are liable to compensate passengers of delayed flights in the same way as if the flight had been cancelled.
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EC Regulation No 261/2004 (the so-called ‘Denied Boarding Regulations’) specifies the care and assistance and/or financial compensation airlines are required to provide to passengers whose flights are delayed or cancelled.
Articles 5, 6 and 7 are, by any standard, unambiguous provisions. Together, they make clear that a right to compensation exists where a flight is cancelled, with the amount determined by the length of the flight. No such right to compensation exists in the case of delayed flights. Or so we thought…
It came as something of a surprise when in the 2009 case of Sturgeon (Case C-402/07), the ECJ held that passengers whose flights are delayed by three hours or more are in fact entitled to the same compensation as if their flight had been cancelled. They suffer similar inconvenience to those whose flights are cancelled, and the principle of equal treatment demands that both sets of passengers be treated equally. In both cases, passengers’ right to compensation is subject to the defence that the delay/cancellation was the result of ‘extraordinary circumstances’.
The analysis in Sturgeon was roundly criticised in light of the clear wording the Regulations (Poland was the only EU member state to back to judgment).
A number of English airlines and the IATA launched judicial review proceedings in the High Court with the aim of challenging the validity of Sturgeon. Separately, in a flight delay case in Germany (Nelson v Lufthansa), the Amtsgericht Köln questioned whether Sturgeon was compatible with the Montreal Convention. Both cases were duly referred to the ECJ and heard together in March this year.
In a robust and unrepentant Opinion delivered on 15 May, Advocate General Bot advised the ECJ to confirm its decision in Sturgeon without much fresh analysis. In terms of the thornier, technical arguments raised, the A-G concluded that:
- The fixed compensation provisions are not in respect of individual damage assessed on an individual basis but rather a ‘standardised and immediate measure’ of compensation, and so do not conflict with the exclusive liability regime of the Montreal Convention (see IATA, Case C-344/04)
- Sturgeon does not offend the principle of legal certainty. The recitals to the Regulations make clear that passengers are intended to receive a high level of protection. The interpretation that delayed flights are subject to the same fixed compensation as cancelled flights is necessary to give effect to that intention. This last point is all the more extraordinary given that the A-G is proposing to construe the unambiguous wording of the substantive Regulations so as to comply with the plainly ambiguous wording of the non-substantive recitals.
It remains to be seen whether the ECJ will follow this Opinion or mount an embarrassing climb-down. I know which my money is on!