The Airlines lost, end of story. I could stop there, refer you to our earlier post and conclude by expressing the hope that airlines will acknowledge defeat and in the future pay compensation when compensation is due under Regulation 261/2004. However, being the academic minded blogger, I’ll go into more detail on the joined cases Nelson (C-581/10) and TUI Travel (C-629/10) below.
The Grand Chamber of the CJEU has decided on compensation for delayed flights. The judgment confirms the 2009 ruling in Sturgeon, in which the Court held that under Articles 5-7 of Regulation 261/2004 passengers not only have the right to standardized monetary compensation in case of denied boarding or cancellation, but also in case of long delay (long being three hours or more). This interpretation of Articles 5-7 has raised some eyebrows, not least because neither Article 7 nor any other provision of the Regulation expressly provides the right to compensation in case of delay. Consequently, the ruling in Sturgeon has been under attack from airlines since 2009 and courts in several Member States have stayed proceedings awaiting this judgment of the CJEU on the ‘validity’ of Sturgeon. To sum up the arguments the airlines have made: Sturgeon is invalid because the decision is contrary to the principles of legal certainty and proportionality, and, moreover, that it is inconsistent with both the 2006 IATA ruling and the Montreal Convention for the Unification of Certain Rules for International Carriage by Air (ratified by the EC).
The questions put to the Court essentially seek to ascertain whether any of the objections raised by the airlines have merit. The Court simply ruled they don’t. On the compatibility with the Montreal Convention:
49 (…) it should be made clear that, like the inconveniences referred to in IATA and ELFAA, a loss of time cannot be categorised as ‘damage occasioned by delay’ within the meaning of Article 19 of the Montreal Convention, and, for that reason, it falls outside the scope of Article 29 of that convention.
50 Article 19 of the Montreal Convention implies, in particular, that the damage arises as a result of a delay, that there is a causal link between the delay and the damage and that the damage is individual to passengers depending on the various losses sustained by them.
54 The specific obligation to pay compensation, imposed by Regulation No 261/2004, does not arise from each actual delay, but only from a delay which entails a loss of time equal to or in excess of three hours in relation to the time of arrival originally scheduled. In addition, whereas the extent of the delay is normally a factor increasing the likelihood of greater damage, the fixed compensation awarded under that regulation remains unchanged in that regard, since the duration of the actual delay in excess of three hours is not taken into account in calculating the amount of compensation payable under Article 7 of Regulation No 261/2004.
55 In those circumstances, the loss of time inherent in a flight delay, which constitutes an inconvenience within the meaning of Regulation No 261/2004 and cannot be categorised as ‘damage occasioned by delay’ within the meaning of Article 19 of the Montreal Convention, cannot come within the scope of Article 29 of that convention.
56 Consequently, the obligation under Regulation No 261/2004 intended to compensate passengers whose flights are subject to a long delay is compatible with Article 29 of the Montreal Convention.
As to the principle of legal certainty:
67 (…)having regard to the requirements arising from the principle of equal treatment, air carriers cannot rely on the principle of legal certainty and claim that the obligation imposed on them by Regulation No 261/2004 to compensate passengers, in the event of delay to a flight, up to the amounts laid down therein infringes the latter principle.
68 In addition, as the Advocate General observed in point 46 of his Opinion, once the judgment in Sturgeon and Others was delivered, both air passengers whose flights were delayed and air carriers were able to know unequivocally the point from which those passengers may claim payment of compensation and the carriers will be required to pay that compensation, respectively, since the introduction of a clear time‑limit also serves to prevent national courts from making different assessments of what constitutes a long delay which would, in some cases, give rise to legal uncertainty.
And finally on the principle of proportionality:
77 First of all, the obligation to pay compensation which stems from Article 7 of Regulation No 261/2004 does not concern every delay, but only long delays.
78 Next, the amount of compensation, fixed at EUR 250, 400 and 600 depending on the distance of the flights concerned may still be reduced by 50% in accordance with Article 7(2)(c) of Regulation No 261/2004, where the delay is – in the case of a flight not falling under subparagraphs (a) or (b) of Article 7(2) – less than four hours (Sturgeon and Others, paragraph 63).
79 In addition, air carriers are not obliged to pay compensation if they can prove that the cancellation or long delay is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, that is, circumstances which are beyond the air carrier’s actual control (see Sturgeon and Others, paragraph 67).
80 Moreover, the discharge of obligations pursuant to Regulation No 261/2004 is without prejudice to air carriers’ rights to seek compensation from any person who caused the delay, including third parties, as Article 13 of that regulation provides. Such compensation may accordingly reduce or even remove the financial burden borne by carriers in consequence of those obligations. Nor does it appear unreasonable for those obligations initially to be borne, subject to the abovementioned right to compensation, by the air carriers with which the passengers concerned have a contract of carriage that entitles them to a flight that should be neither cancelled nor delayed (IATA and ELFAA, paragraph 90, and Sturgeon and Others, paragraph 68).
The Court concludes:
1. Articles 5 to 7 of Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, must be interpreted as meaning that passengers whose flights are delayed are entitled to compensation under that regulation where they suffer, on account of such flights, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier. Such a delay does not, however, entitle passengers to compensation if the air carrier can prove that the long delay is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, namely circumstances beyond the actual control of the air carrier.
2. Consideration of the questions referred for a preliminary ruling has disclosed no factor of such a kind as to affect the validity of Articles 5 to 7 of Regulation No 261/2004.
That’s settled. Passengers have the right to the fixed monetary compensation under Article 7 of the Regulation in case of a delay of three hours or more. Compensation is only not due in case of ‘extraordinary circumstances’. Several judgments have already been rendered on the question what exactly constitutes ‘extraordinary circumstances’ (Cases C-294/10; C-549/07). The most obvious example is of course natural disasters (in that regard, keep an eye on case C-12/11 which deals with the closures of European airspace as a result of the eruption of the Eyjafjallajökull volcano in Iceland).
To conclude, readers of this blog be advised! From personal experience I can assure you some airlines (maybe lots of them) still omit to inform passengers about their right to compensation in case of long delay (indeed, if they inform passengers at all).