Mediation of disputes in aviation litigation has recently come to prominence as a result of the withdrawal of Ryanair from mediation arrangements set out to deal with claims by passengers for compensation under EU Regulation 261/2004.
As a consequence it is likely that many more claims against Ryanair will be brought in the English and other EU Courts given the widespread delays and cancellations of flights experienced by that airline in July to September 2018 as a consequence of industrial action.
The EU adopted a mediation scheme for consumer claims generally under the EU Alternative Dispute Resolution (ADR) Directive (Directive 2013/11/EU). In the UK this has been enacted by the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and Information) Regulations 2015 and The Alternative Dispute Resolution for Consumer Disputes (Amendment) Regulations 2015 came into force respectively on 9 July 2015 and 1 October 2015.
The UK Regulations do not make participation in ADR schemes mandatory for “traders” such as airlines but they do require almost all businesses which sell directly to consumers to point the consumer to a certified ADR scheme – where they cannot resolve a dispute in-house – and declare whether or not they intend to use that scheme.
The Regulations also require that ADR providers wishing to gain certification must meet certain standards with regard to independence, impartiality, and quality of expertise with a competent authority.
The UK Regulations:
- place an information requirement on businesses selling to consumers
- establish competent authorities to certify ADR schemes
- set the standards that ADR scheme applicants must meet in order to achieve certification
When implementing the ADR Directive the UK government noted hat there was an unmet need regarding complaints from consumers that stemmed from aviation contracts. The CAA was appointed by the UK government to be the UK's only competent authority to approve ADR providers as fit to offer ADR services to consumers of aviation services. Previously, the CAA itself mediated between customer and airline in disputes concerning flight delays, cancellations, missing or damaged luggage, and compensation. Now the CAA will now only get involved with those airlines not registered with an ADR scheme.
In most cases, once an airline's own complaints process has been exhausted, the consumer will be able to refer their case to an ADR body. The ADR body will then assess the case in an efficient and timely manner and provide a solution, which, if acceptable to the consumer, the airline must comply with. This means that if the ADR scheme provider says the airline should pay compensation, the airline must do so.
If consumers do not accept the ADR provider's solution the consumer can reject it and may pursue their legal rights through the courts (subject to the applicable time limits for bringing a court claim).
ADR bodies have to complete their handling of a case within 90 days and ADR bodies to charge a small fee for handling a complaint (the current maximum is £25). However this must be refunded to the passenger if the ADR body upholds the passenger's complaint in any way - even if this consists solely of an apology from the airline, if that is what the consumer was seeking. Consumers with complaints that relate to disability issues are not charged a fee
All CAA administered ADR schemes must handle complaints relating to denied boarding, delay, or cancellation; destruction, damage, loss, or delayed transportation of baggage; destruction, damage, or loss of items worn or carried by the passenger; problems faced by disabled passengers or passengers with reduced mobility when using air transport services; and any more general disputes arising where the consumer alleges that the business is not trading fairly.
However at present the mediation scheme is limited to 2 certified providers Consumer Dispute Resolution Ltd (which trades as ‘Aviation ADR’) and CEDR Services Limited (which trades as CEDR). However these do provide a very competent service and have dealt with thousands of complaints already. Aviation ADR which provides publicly available data dealt with 10,580 complaints in the year ended March 2018 of which the vast majority (9,097) dealt with complaints in respect of EU Regulation 261/2004 on compensation for denied boarding, cancellation and long delays. Of these only in 10 cases did a member airline seek to escalate a complaint or seek not to comply with a determination in favour of a passenger.
It appears that mediation is working well in UK aviation and saving costs for both airlines and passengers and avoiding the need for expensive and delayed trips to Court. It is however quite surprising that more mediation organisations have not become certified and no doubt this will be the case as the scheme beds in.