PASSENGER RIGHTS IN THE EUROPEAN UNION
Delayed passengers and their protection and enforcement under the
EU transport Regulations
H.J.M. van der Burg 2015
Master thesis European Private Law
“EU transport Regulations: Passenger protection and the effectiveness of the
enforcement of passenger rights in the event of a long delay”
Student: Hidde van der Burg
Student number: 5873886
Supervisor: Mrs. dr. M. Bartl Date of Entry June 24, 2015
University of Amsterdam
INDEX
Abbreviations ... 4
Introduction ... 5
Chapter I THE LIBERALISATION OF THE EU TRANSPORT MARKET ... 8
The Need for Passenger Protection ... 8
Chapter II THE REGULATIONS ... 10
Introduction ... 10
The Passenger Rights ... 11
Chapter III ... 16
THE RIGHT TO COMPENSATION AND THE EXTRAORDINARY CIRCUMSTANCE EXCEPTION 16 The Interpretation by Dutch Courts ... 20
The Interpretation by UK Courts ... 21
Chapter IV EFFECTIVE ENFORCEMENT? ... 25
Introduction ... 25
The Private Enforcement ... 25
National Enforcement Bodies ... 27
Out-Of-Court Settlement? ... 31
Other Options ... 33
Conclusion ... 35
Abbreviations
ADR Alternative Dispute Resolution Air Regulation Regulation (EC) No 261/2004
Art. Article
CAA Civil Aviation Authority
Charter EU Charter of Fundamental Rights EC European Commission
ECJ European Court of Justice EP European Parliament EU European Union
FOD Foreign Object Damage
HETI Human Environment and Transport Inspectorate MS Member State
NEB National Enforcement Body
p. Page
Rail Regulation Regulation (EC) No 1371/2007
TFEU Treaty on the Functioning of the European Union Waterborne Regulation Regulation (EC) No 1177/2010
Introduction
The liberalisation of the EU transport market has allowed passengers to benefit from lower fares and more efficient and passenger-friendly services than before. However, when inconveniences arise, passengers are usually in a weak negotiation position vis-à-vis the transport operators. Passengers are generally unaware of the exact rights that they have and are often unable to enforce their rights effectively. According to the EC, the contractual imbalance can only be restored by EU legislation. In 2001, the EC used its shared competence1 to introduce Regulation 261/2004 (hereafter, the ‘Air Regulation’) to establish basic minimum protection rules in air transport. Subsequently, the EC continued to extend the passenger rights to other modes of transport, which has resulted in the adoption of Regulation 1371/2007 (‘Rail Regulation’) and Regulation 1177/2010 (‘Waterborne Regulation’).2 The aims of the transport Regulations are twofold: to ensure a high level of protection for passengers and to create a level playing field for transport operators.3
To be able to benefit from an effective protection, EU passengers in all transport modes have the right to full application of the Regulations.4 Despite the EC’s work done so far, the Air Regulation still seems to be ‘up in the air’,5
and the Rail Regulation ‘off track’.6 The Air Regulation has yet raised the most legal discussions and has already led to an abundance of court cases. One of the reasons is the ambiguousness of the force majeure exception for technical issues, which will be discussed extensively in this thesis.7 The Rail Regulation allows Member State to exempt non-mandatory provisions, including the right to care and assistance, the right to reimbursement and re-routing and the right to compensation in the event of long delays. Because only four Member States currently apply the Rail Regulation in
1
Art. 4(g) TFEU 2
White Paper: European transport policy for 2010 - Time to decide COM (2001) 370 of 12.09.2001. Regulation EC (No) 181/2011 for Bus and Coach passengers will not be discussed in this thesis.
3 E.g. recital 1 and 4 of preamble Regulation EC (No) 261/2004 4
For all the rights see Annex I of COM(2011) 898 of 19.12.2011
5 Cf. Luzak, Joasia, European Private Law: Up in the Air? (February 4, 2015). Forthcoming in M. Bobek & J. Prassl (eds.) 'Air Passenger Rights. Ten Years On', Oxford: Hart Publishing.; Amsterdam Law School Research Paper No. 2015-03; Centre for the Study of European Contract Law Working Paper Series No. 2015-03. Available at SSRN: http://ssrn.com/abstract=2560234
6
In so far I know, the Waterborne Regulation has not yet been subjected to (worthy) legal criticism, and a request for a preliminary ruling has not yet been submitted to the ECJ.
7 For the other reasons I would like to refer the reader to: Koning, Ingrid, The Effect of the European Passenger Transport Scheme on the National Legal Order: A Focus on Air Transport (December 1, 2013). Available at SSRN:http://ssrn.com/abstract=2361900
full, the protection of EU rail passengers is still far from reality.8 In case passenger rights do apply, all passengers should be able to enforce their rights effectively. If there is no effective enforcement, the EU Regulations basically become empty shells.9
In this thesis I will do research to the effectiveness10 of EU passenger protection in the event of long delays.11 The research question is how the various passenger rights apply in practice and if passengers can enforce their rights effectively. To answer the research question I will start in Chapter I with a brief explanation about the need for passenger rights in the European Union. In Chapter II, I will analyse the substantive rights that Air, Rail and Waterborne passengers have in the event of long delays.The application of the passenger rights in the various transport modes is not consistent. Not only are there different thresholds for the basic rights to apply in each transport mode, but also the amounts of compensation are calculated differently. In the analysis I will evaluate the differences in the application of the rights across the three transport modes from the normative standpoint of the passenger. To counterbalance the passengers’ normative standpoint, I will also evaluate - where possible – from the normative standpoint of the transport operators. Transport operators have regularly subjected the Regulations to wide criticism as in their eyes, the high level of passenger protection abolishes the intended level playing field.
Chapter III continues by conducting analysis on the legal implications of the extraordinary circumstance exception, particularly on the notion of technical issues. The research will be focused on the Air Regulation since this Regulation has caused the most legal discussion and court cases. The Rail and Waterborne Regulations will be used as an illustration. Under the Air Regulation, airlines may be relieved from their obligation to pay compensation when the delay is due to extraordinary circumstances, such as some technical issues. The lacuna of the notion of technical issues has been explained by the ECJ and is being interpreted differently
8 Exemptions granted by Member States under Regulation (EC) No 1371/2007 on rail passengers’ rights and obligations COM(2015) 11.03.2015 – Outlook after 3 December 2014
9
Loos, M, Individual Private Enforcement of Consumer Rights in Civil Courts in Europe (January 13, 2010), Centre for the Study of European Contract Law Working Papers Series No. 2010/01. Available at SSRN: <http://ssrn.com/abstract=1535819>
10 Effective protection strictu sensu. See: Lenaerts, K. Effective Judicial Protection in the EU. To be consulted online <http://ec.europa.eu/justice/events/assises-justice-2013/files/interventions/koenlenarts.pdf>
11
I have chosen to evaluate the level of protection in the event of long delays, because long delays are the most common type of disruption. According to an EC survey, 69% of more than 20.000 respondents had experiences long delays in the last 12 months. Eurobarometer 420, “Passengers Rights”, December 2014. Survey conducted by TNS Opinion & Social at the request of the EC.
by national courts. Inconsistent interpretations of the exception for technical issues in Member States can be detrimental for air passengers as unwilling airlines might abuse the confusion to ward off passenger claims.12 More legal certainty on this matter would help air passenger with the enforcement of their rights vis-à-vis the airlines. National courts and especially the National Enforcement Bodies (hereafter, ‘NEBs’) can play an important role. If at least the interpretations by the national courts and the NEBs are in line, this could ideally result in a consensus of the interpretation between airlines and passengers on a national level.13 To see how the extraordinary circumstance exception for technical issues is being interpreted on the ground, I analyse both UK and Dutch court cases, and the interpretations by the UK and Dutch NEBs. By comparing these two countries I will be able to visualize how the extraordinary circumstance exception with regard to technical issues is being interpreted in general, which could be narrowly or broadly. From a consumer perspective, a narrow interpretation creates more legal certainty, which could make the enforcement of the right to compensation less cumbersome. On the other hand, I will argue that a narrow interpretation might also counter-attack passengers based on economic and safety risks. Finally, in Chapter IV I evaluate if passengers are able to effectively enforce their right to compensation when the transport operators fail to comply with the passenger complaints. I will focus the research on the enforcement of the right to compensation because the implications of this right have relatively caused the most legal discussion.14 To see if the enforcement is effective, I will describe the enforcement options that passengers in the Netherlands and the UK currently have. The options will be measured in terms if they are low-cost, accessible, and actually help passengers to enforce their rights.15 I argue that the costs for seeking damages in court will often outweigh the passenger’s claim. Moreover, the NEBs that are designated by the Regulations to effectively help passengers with the enforcement of their rights do not effectively succeed doing so. By comparing the enforcement options in both countries, I was able to identify some interesting differences that may result in different levels of effectiveness.
12 Cf. Koning, I. The Enforcement of Air Passengers’ Rights in Europe, REDC 2011/2, p. 359-382
13 The EC has made it their main objective to ensure a proportionate and effective protection for passengers in all transport mode, by working on issues to ensure a convergent approach in all MSs. See: A European vision for Passengers: Communication on Passenger Rights in all transport modes, COM(2011) 898, 19.12.2011. 14
Undoubtedly because passengers may be entitled to high amounts of monetary compensation. At least this is the case for air passengers.
15 Pelkmans, Jacques and De Brito, Anabela Correia, Enforcement in the EU Single Market, October 10, 2012. CEPS Paperbacks. <http://ssrn.com/abstract=2160236>. And, A European vision for Passengers:
Chapter I
THE LIBERALISATION OF THE EU TRANSPORT MARKET
The Need for Passenger Protection
The transport market used to be highly regulated, with intra-EU routes being monopolized by the major EU flag carriers.16 Such a regulated market is not in line with Article 119 TFEU, which demands an open market with free competition. The economic rationale behind the open market is that by removing the entry barriers, consumers will have more freedom to choose their operators. The free choice will foster competition and innovation, which eventually benefits the consumers with lower prices and higher standards. In the mid-80s, the EU introduced its liberalisation policy to encourage the transport markets to open up for competition gradually.17
Within the liberalised transport market, transport operators are in the position to set up their own rules and contracts under national law. As a result, both the transport operators and the passengers are responsible for the compliance and enforcement of the contract.18 In these private contractual relationships, passengers are generally in a weak negotiation position. While buying a ticket, passengers are generally not only unaware of the exact terms and conditions of the contract, but also have to pay for the service before actually taking the journey. Also, passengers who travel across the EU may be subject to foreign law and obligations that are not familiar to them. Even worse, in some Member States passengers may not have an effective legal protection scheme at all. Passengers are therefore heavily dependent on the efficiency and the honesty of the transport operator. The EC believes that this imbalance can only be solved by EU legislation.19 Thus, the EC has now adopted basic minimum protection rights for passengers in all transport sectors. By adopting Regulations, the EC seems to have followed the shortest route to achieve a uniform minimum level of
16 Burghouwt, Mendes de Leon & de Wit, EU Air Transport Liberalisation, Discussion Paper No. 2015-04 17
Gaspari, Francesco, The EU Air Transport Liberalization and Re-regulation, International and Comparative Law Review, 2011, Issue 2, ISSN: 1213-8770, Central and Eastern European Online Library (C.E.E.O.L.) 18 Cseres, K, What Has Competition Done for Consumers in Liberalised Markets? Competition Law Review, Vol. 4, No. 2, pp. 77-121, 2008
19
passenger protection, as the rights are now directly enforceable in the Member States.20 The transport Regulations show us that the EC’s orientation of the internal market has expended from only removing trade barriers to foster competition to a more impact driven vision guided by the needs for consumers, and in this case, passengers.21 By giving passengers basic minimum protection rights, the EC – besides creating a level playing field for the transport operators - intends to facilitate mobility and social integration in the liberalised transport market.22 Where consumer protection is generally aimed at protection of the economic interest of consumers, the Regulations seem to protect passengers against damages in view of ‘loss of time’.23
For passengers to be able to fully benefit from the rights under the Regulations, they must first of all be aware of the rights that they have. To create more awareness the transport Regulations stipulate information obligations for the transport operators. One of the obligations is to inform passengers about their rights by displaying a notice of the passenger rights at location.24 Unfortunately, despite the obligation in the Regulations, still only one in three EU citizens is currently aware of their rights.25 The EC keeps on promising to continue with the campaign to raise more awareness of the passenger rights under the Regulations.26
20
Cf. Koning, I. The Enforcement of Air Passengers’ Rights in Europe, REDC 2011/2, p. 359-382 21 Cseres, Kati and Schrauwen, Annette, Empowering Consumer-Citizens: Changing Rights or Merely
Discourse? (October 1, 2012). Amsterdam Centre for European Law and Governance Research Paper No. 2012-03. Available at SSRN: http://ssrn.com/abstract=2154869
22A European vision for Passengers: Communication on Passenger Rights in all transport modes , COM(2011) 898 final, Brussels 19.12.2011. And recital 4 of Regulation (EC) No 261/2004
23 Joined cases ECJ Sturgeon v. Condor and Böck-Lepuschitz v. Air France (C-402/07 and C-432/07), November 9, 2009.
24
Recital 20 of preamble and art. 14(1) Regulation (EC) No 261/2004
25 Special Eurobarometer 420, Summary, “Passengers Rights”, December 2014. Survey conducted by TNS Opinion & Social at the request of the European Commission.
<http://ec.europa.eu/public_opinion/archives/ebs/ebs_420_en.pdf> 26
Chapter II
THE REGULATIONS
Introduction
The aviation sector was the first transport sector on which the EC focused its attention. Due to its importance in the EU, the EC had advanced much further in creating a single market for air transport than for transport of passengers by rail and waterborne.27 The very first Community instrument for air passengers was a Regulation on denied boarding, which came into force in 1991.28 Almost two decades later, in February 2005, the EC adopted Regulation 261/2004, which introduced a uniform regime to protect the interests of air passengers in the case of delay or cancellation of a flight.29 After various protective legislations in the aviation sector, the next step was to extend the protection to passengers travelling by train.30 In the last two decades, the EC has been actively busy in restructuring the railway sector, with the aim to improve the European rail market to strengthen its position vis-à-vis other modes of transports.31 On 3 December 2009, Rail Regulation 1371/2007 entered into force. Third but not least, Regulation 1177/2010 entered into effect on 18 December 2010 to facilitate protection to waterborne passengers in the EU. In contrast to most other EU consumer protection measures, the legal basis for the adoption of the three transport Regulations is Article 100(2) TFEU.32 As a result, the scope of application could be extended from ‘consumers’ to ‘passengers’. The legal basis might also have enabled the EC to focus the Regulations both on the strengthening of the internal market33 and the creation of a stand-alone protection scheme for passengers.34
27 Protection of air passengers in the European Union COM(2000) 365 of 21.06.2000. With 5.1 million jobs and a contribution of€365 billion to the European GDP, the aviation sector is of vital importance to the EU’s overall economy.
28 Regulation (EC) No 295/1991 establishing common rules for a denied-boarding compensation system in scheduled air transport
29 Regulation (EC) No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights
30 White Paper: European transport policy for 2010 - Time to decide COM(2001) 370 of 12.09.2001 31 See e.g. The Fourth railway package, COM(2013) 25 of 30.01.2013
32
Other consumer protection measures are generally based on Article 114 TFEU, which allows the EC to adopt consumer protection measures to strengthen the internal market.
33 E.g. recital 4 of preamble Regulation EC (No) 261/2004 34
Idem recital 1. Luzak, Joasia, European Private Law: Up in the Air? (February 4, 2015). Forthcoming in M. Bobek & J. Prassl (eds.) 'Air Passenger Rights. Ten Years On', Oxford: Hart Publishing.; Amsterdam Law
The Passenger Rights
The basic substantive rights guaranteed by the three Regulations in the event of long delays are comparable; all Regulations offer passenger the right to information, reimbursement, re-routing, assistance while waiting to travel, and compensation under certain conditions. Subsequently, passengers have the right to full application of the Regulations.35 However, the application of the substantive rights varies in each transport mode. It could be argued that EU passengers in all transport modes suffer from the same damage when there is a delay, namely the loss of time. Therefore, all passenger rights should be equal in its application.36 The ECJ has justified the inconsistent application for the reason of distinct characteristics of the different transport modes and their markets, both for the industries (differences in the company size, revenues or number of routes) and passengers (differences in the length and the conditions of the trip).37 Besides, the ECJ has firmly reminded us that the rights and implications cannot be applied by analogy to other modes of transport.38
As to the right to care and assistance, delayed passengers are entitled to receive adequate meals and refreshments under all three Regulations. The time limit for the right to apply varies with 60 minutes for rail, 90 minutes for waterborne and 120 up to 240 minutes for air.39 What is more, the provisions only mention ‘meals and refreshments in a reasonable relation to the waiting time’. Thus, it is an open question what can be considered to be reasonable, based on the relation to the waiting time. Some carriers may offer full care, while others - particularly low cost carriers – may offer considerably less. Talking from my own experience, I once was offered a coupon of five euros to buy something at the airport while suffering from a flight delay of more than two hours. With regard to the high prices of consumption goods at the airport, I could provide myself with a bottle of water and a snack. This could, however, be insufficient for others.
School Research Paper No. 2015-03; Centre for the Study of European Contract Law Working Paper Series No. 2015-03. Available at SSRN: http://ssrn.com/abstract=2560234
35 For all the rights see Annex I of COM(2011) 898 of 19.12.2011
36 This argument has been raised by Christopher Bisping from the University of Warwick during the IACL 2015 Conference at the University of Amsterdam, June 30, 2015, ‘Travel at your own peril? Inconsistenties in Consumer Law exemplified by contract for transportation of passengers by air’.
37
As is the justification according to the ECJ in Denise McDonagh v. Ryanair Ltd (C-12/11), January 31, 2013, para 56, 57
38 ECJ ÖBB-Personenverkehr v. Schienen-Control Kommission (C-509/11), September 26, 2013 39
Art. 9(1)(a) Regulation (EC) No 261/2004, art. 18(2)(a) Regulation (EC) No 1371/2007 and art. 17(1) Regulation (EC) No 1177/2010
Furthermore, delayed passengers in all transport modes are under certain conditions entitled to receive hotel accommodations free of charge.40 The right to accommodation for air and rail passengers is unlimited. The Waterborne Regulation limits the right to free hotel accommodation to €80 per night for a maximum of three nights. Because the Air and Rail Regulations do not limit the costs and stay of accommodation, this could potentially lead to disproportional high costs for the air and rail operators. As an example, due to the eruption of the Eyjafjallajökull volcano in 2010, which had lead to the closure of a large part of the air space, air carriers had to pay significant amounts of compensation for meals, assistance and accommodation to the stranded passengers.41 The ECJ recognised that compensation claims could have a substantial negative economic consequence for airlines, but a high level of protection must be afforded to passengers.42 For any additional costs, the ECJ ruled that there is a limit to what the passenger can claim as compensation if the airline did not fulfil its obligations sufficiently. In this case, the passenger can claim the necessary, appropriate and reasonable costs that the passenger has made to make up for the failure of the airline to fulfil its obligations, of which the national court must ultimately make the assessment.43
To create a fairer balance between the liability for air operators and the protection of air passengers, the EC wants to limit the right to accommodation to three nights and €100 per night in the proposed revision of the Air Regulation.44 From the perspective of the consumer, a limitation to the right to accommodation could result in the situation that the passenger has to pay a portion of the price of the accommodation by himself. If the hotels located near the airport or port charge more than €80 or €100 per night, the passenger has to decide if he or she wants to pay an extra sum of money. This could leave passengers stranded at the airport or port, waiting for their next transport.45 In my opinion, the amount of compensation should not cause many problems. Most European ports and airports have budget hotels nearby.46 The
40 Art. 9(1)(b) Regulation (EC) No 261/2004, art. 18(2)(b) Regulation (EC) No 1371/2007 and art. 17(2) Regulation (EC) No 1177/2010
41
According to IATA, the eruption of the volcano has costed airlines $1.7 billion in revenue.See the press release: <http://www.iata.org/pressroom/pr/pages/2010-04-21-01.aspx>
42 ECJ Denise McDonagh v. Ryanair Ltd (C-12/11), January 31, 2013, para. 34 43 Idem, para 51
44 In the proposal for the amendment of Regulation 261/2004, the EC has proposed to change the right to accommodation for air passengers to three nights and €100 per night.
45 Cf Pachl, U, Passenger Rights for All, Extraordinary Circumstances at the Conference of the Greens, European Parliament, Brussels, 09/01/2013
46
The price for a one night stay in the budget Ibis Hotel at Schiphol Airport would cost the passenger €49. See: <http://www.ibis.com/gb/hotel-5097-ibis-budget-amsterdam-airport/index.shtml> (accessed on July 3, 2015)
limit of the number of nights will only leave passengers unprotected when the delay lasts more than three days. I assume that such long-time delays will hardly occur, and even if they occur, it will probably result in a cancellation of the flight.47
In the event of a long delay, all passengers shall also be offered the choice between reimbursements of the full costs of the ticket or re-routing under ‘comparable transport conditions’.48 Air and rail passengers also have the additional option to postpone the trip at a
later stage by re-booking.49 The option of re-booking has been left out of the Waterborne Regulation. However, according to the EC waterborne passengers are also able to choose this option, but the passenger and the waterborne operator just have to agree on this.50 All thee Regulations do not oblige the operators to provide a re-routing (or re-booking) exclusively via an alternative air, rail and waterborne operator. However, from the general principles51 that have been developed by the ECJ in its case law, it may be assumed that ‘comparable transport conditions’ must be defined on the basis of the same or similar class, and the re-routing may only be conducted by another mode of transport covering the same or very similar route. 52 In the case of a train delay, I am of the belief that a re-routing conducted by a
bus services can also be considered to be comparable.53
The final right that will be discussed is the right to compensation. A brief textual look at the Air Regulation reveals that passengers are not entitled to the right to compensation when their flight is delayed. This privilege is only assigned to passengers whose flights are cancelled.54 As a result, the Air Regulation gives air carriers the opportunity to avoid paying compensation for a cancelled flight, simply by delaying a flight deliberately in order to win
The price for a one night stay in the Ibis Hotel at London Heaththrow would be €65. <http://www.visitlondon.com/where-to-stay/place/283633-ibis-london-heathrow-airport> 47 In this case passengers generaly benefit from the same level of protection.
48 Art. 8 Regulation (EC) No 261/2004, art. 16 Regulation (EC) No 1371/2007 and art. 18 Regulation (EC) No 1177/2010
49
Art. 8(1)(c) Regulation (EC) No 261/2004 and art. 16(c) Regulation (EC) No 1371/2007
50 The EC reasons that even though this option is not available under the Waterborne Regulation, this not means that the option is not negotiable. A European vision for Passengers: Communication on Passenger Rights in all transport modes , COM(2011) 898 final, Brussels 19.12.2011.
51 In joined cases ECJ Sturgeon v. Condor and Böck-Lepuschitz v. Air France (C-402/07 and C-432/07), November 9, 2009, the ECJ made it clear that the provisions of EU law should not only be interpreted by its wording but also to the context in which it occurs and the objectives pursued by the rules.
52 The EC has elaborated about the interpretation of this right in its Communication on the application of Regulation 261/2004 COM(2011) 174 of 11.04.2011
53 This has also been decided in a Dutch case with regard to a congested train journey from Goes to Venlo. The judge interpreted that the use of a bus service is to be considered as a continuation under comparable
circumstances. See: Administrative High Court for Trade and Industry, case AWB 13/942, 12.09.2014 54
time to fix the problem. Fortunately, the ECJ intervened. In Sturgeon, the Court ruled that passengers, who are affected by a long delay, suffer the same type of damage as passengers whose flights are cancelled.55 This means that after Sturgeon, long delayed air passengers are also entitled to the right to compensation. The ECJ reasoned that offering compensation to delayed passengers is in line with the objective to give a high level of protection and the principle of equal treatment. Delayed passengers should not be treated differently than passengers whose flights are cancelled since both passengers suffer from the same damage, which is the loss of time. The Sturgeon decision has been widely criticised by airlines and legal authors because the ECJ basically rewrote the text of the Air Regulation.56 In respect of their role being Union judges, national courts have been applying the Sturgeon decision since it has been published.57
According to the airlines, the decision in Sturgeon is in violation with the Montreal Convention. As a result, airlines refused to pay compensation to delayed passengers and asked Dutch courts to refer new preliminary questions to the ECJ. Many cases had been kept pending and the obstruction of the airlines had led to an abundance of appeal cases.58 Despite the effort of the airlines, the ECJ re-confirmed the Sturgeon decision in the joined cases Nelson and TUI.59 In Nelson and TUI, TUI Travel and the UK Government tried another strategy by submitting that imposing an obligation to compensate passengers whose flights are delayed contravenes the principle of legal certainty, since the obligation cannot be derived from the text of the Regulation. Again, the ECJ reasoned that it interprets the Regulation in the light of the aim and intention of the EU legislation, which is to protect passengers against serious trouble and inconvenience.60 Furthermore, the Court finds that the introduction of a clear time limit (three hours delay) in fact gives rise to legal certainty, since now both passengers and air carriers are able to know unequivocally the point from which air
55
Joined cases ECJ Sturgeon v. Condor and Böck-Lepuschitz v. Air France (C-402/07 and C-432/07), November 9, 2009. The amount of compensation to pay is between EUR 250 and EU 600, depending on the distance and the destination of the flight.
56
Cf. Adams, Waele de, Meeusen, Straetmans, Judging Europe’s Judges, The Legitimacy of the Case Law of the
European Court of Justice, Hart Publishing, Oxford, July 4, 2014
57 E.g. Gerechtshof Amsterdam, case 200.077.860-01, 06.12.2011
58 Gerechtshof Amsterdam, case 200.077.860-01, 06.12.2011. The Montreal Convention is a multilateral treaty for the Unification of certain rules for international carriage by air. The Convention governs the liability of airlines i.e. for lost baggage and death. The EU is a member of the Montreal Convention and the Convention thus has force in the EU. The EU adopted its own Regulation to further regulate the air sector.
59 Joined cases ECJ Nelson v. Deutsche Lufthansa AG and TUI Travel v. Civil Aviation (581/10 and C-629/10), October 23, 2012
60
passengers may claim payment of compensation.61 As for rail and waterborne passengers, the Regulations specifically entitle compensation to the passenger when the delay in arrival exceeds 60 minutes.62 The only thing that can still upset the application of the right to compensation in all modes of transport is when the delay is due to extraordinary circumstances.63
61
Idem, para. 68
62 For air passengers 5 hours, rail passengers 1 hour and waterborne passenger 1,5 hours. Art. 17 Regulation (EC) No 1371/2007 and Art. 19 Regulation (EC) No 1177/2010
63
In ECJ Denise Mcdonagh v. Ryanair Ltd (C-12/11), December 2013, 31, the ECJ reasoned that in case of an extraordinary circumstance, the airline is not relieved from the obligation to give care and assistance.
Chapter III
THE RIGHT TO COMPENSATION AND THE EXTRAORDINARY
CIRCUMSTANCE EXCEPTION
The extraordinary circumstance exception relieves transport operators from the obligation to pay compensation, and thus limits their liability for delays.64 To invoke this exception successfully, the operators must proof that the delay is caused by an extraordinary circumstance and that the delay could not have been avoided, even if all reasonable measures had been taken. Interestingly enough, the Rail Regulation does not have an extraordinary circumstance exception with regard to the right to compensation. Even though Article 15 of the Rail Regulation states that Chapter II of Annex I65 governs the liability of railway undertakings in respect of delays, - of which Article 32 CIV states that the train carrier is relieved from its liability if the delay is attributable to force majeure66 - the ECJ confirmed that the purpose of Article 32 in Annex I is different, and does not apply to the right to compensation in Article 15. 67 According to A-G Jääskinen, any other interpretation would endanger the purpose of the Rail Regulation, which is to achieve a high level of consumer protection.68 Due to the absence of an extraordinary circumstance exception in rail transport, rail passengers seem to benefit from a higher level of protection than air and waterborne passengers. On the other hand, due to the absence of an extraordinary circumstance exception rail operators are exposed to more financial liabilities. As a result, rail operators may raise their ticket fares, which means that the passengers eventually pay the price for their protection.
However, it seems that not all EU rail passengers benefit from the same level of protection. To ease the phasing-in, the Rail Regulation allows Member States to grant exemptions to domestic and international long distance rail passenger services and to urban, suburban and
64 E.g. article 5(3) Regulation (EC) No 261/2004. In the Air Regulation, the extraordinary circumstance exception also applies by analogy to delays. See: Joined cases ECJ Nelson v. Deutsche Lufthansa AG and TUI
Travel v. Civil Aviation (C-581/10 and C-629/10), October 23, 2012
65 Annex I is an extract of the Contract for International Carriage of Passengers and Luggage by Rail (CIV), which is an international set of uniform rules that already existed. The EC ought it to be desirable to strengthen the rights of rail passengers by building on these existing international rights.
<http://www.otif.org/pdf_external/e/RU-CIV-1999-e.PD>
66 i.e. circumstances not connected with the operation, fault on the passenger or due to behaviour of a third party.
67
ECJ ÖBB-Personenverkehr v. Schienen-Control Kommission (C-509/11), September 26, 2013 68
regional rail passenger services.69 Domestic and international rail passenger services may be exempt for a maximum period of five years, and this period may be renewed twice. Urban, suburban and regional services may be exempt unconditionally. Only the core mandatory provisions, which concern the availability of tickets and reservations, liability for passengers and luggage, insurance, and the rights for disabled or reduced mobility passengers cannot be exempt from application.70 From the day the Rail Regulation entered into force, only four Member States apply the Regulation in full71, whilst 22 Member States have granted exemptions to varying degrees.72 The UK is the only country that has exempt all non-mandatory provisions of the Rail Regulation, and prolongs the existing exemptions as a holding measure.73 This means that delayed rail passengers in the UK have no protection under the Regulation at all. Dutch rail passengers benefit from a higher level of protection since the Netherlands is one of the four countries that apply the Rail Regulation in full. Even though Member States may choose themselves whether they exempt the rights under the Rail Regulation or not, the possibility of exempting the rights may abolish the level playing field for rail operators. For example, because in the Netherlands the Rail Regulation applies in full, while in the UK the non-mandatory provisions are exempt, there is a wide divergence of economic liabilities. Dutch rail operators have to oblige to more passenger rights and have to pay compensation to delayed rail passengers while UK rail operators do not have the same (financial) obligations. Also, the divergence in economic liabilities may result in different rail fares. In this case, the liabilities for Dutch rail operators may be passed on to the Dutch passengers, which means that they pay higher fares in the end.
In air transport, the extraordinary circumstance exception is seen as a key issue in air passenger law.74 Because the extraordinary circumstance exception is not specifically defined, it leads to a high degree of legal uncertainty. A high degree of legal uncertainty is detrimental for passengers as it may upset the application of the right to compensation.75 An opposite
69 Art. 2 Regulation (EC) No 1371/2007 70
Articles 9, 11, 19, 20(1) and 26 Regulation (EC) 1371/2007 71 The Netherlands, Denmark, Italy and Slovakia
72 See Summary Table - Exemptions granted by Member States under Regulation (EC) No 1371/2007 on rail passengers’ rights and obligations COM(2015) 11.03.2015
73 Exemptions granted by Member States under Regulation (EC) No 1371/2007 on rail passengers’ rights and obligations COM(2015) 11.03.2015 – Outlook after 3 December 2014
74 Pachl, U, Passenger Rights for All, Extraordinary Circumstances at the Conference of the Greens, European Parliament, Brussels, 09/01/2013
75
Jeremias Prassl, 'Reforming Air Passenger Rights in the European Union' (2014) 39 Air and Space Law, Issue 1, pp. 59–81
observation of open norms is that the Regulations should not regulate everything. To not suppress local autonomy and room for regulatory experimentation, it would be better to leave the interpretation of norms to national courts.76 However, to offer passengers a high level of protection, it would – in this case – be more desirable to fill in the open norm. Due to its ambiguousness, airlines may use the extraordinary circumstance exception as a loophole to escape liability.77
As to the definition, recital 14 of the preamble stipulates examples of extraordinary circumstances, i.e. flight safety shortcomings, strikes and bad meteorological conditions.78 However, the list in recital 14 is non-exhaustive. In practice, the ECJ has clearly constituted the eruption of the Icelandic Eyjafjallajökull volcano - which led to the closure of a large part of the air space in 2010 - as an extraordinary circumstance.79 The ECJ literally referred to this circumstance as being ‘out of the ordinary’. In his opinion, A-G Bot also noted that the eruption of the volcano is a clear example of a circumstance that is beyond the actual control of the carrier.80 More interestingly and difficult is the question if a technical issue - which can be regarded as a flight safety shortcoming - constitutes an extraordinary circumstance. In Wallentin-Hermann v. Alitalia, a flight of Alitalia was cancelled due to a complex engine defect in the turbine.81 The defect had been discovered during the check, a day before the flight. Alitalia rejected to pay compensation to the passengers because Alitalia reasoned that the engine defect was an unexpected flight safety shortcoming.82 In its judgment, the ECJ introduced an interpretation of technical issues:
“A technical problem in an aircraft is not covered by the concept of an extraordinary circumstance, unless the problem stems from events which, by their nature or origin, are not inherent in the normal exercise of the activity of the air carrier concerned, and are beyond its actual control”.83
76 Weatherill, Stephen, Interpretation of the Directives: The Role of the Court (January 26, 2010). Available at SSRN: http://ssrn.com/abstract=1542562 or http://dx.doi.org/10.2139/ssrn.1542562
77
This issue will be discussed more extensively in Chapter III
78 The full list: political instability, meteorological condition incompatible with the operation of the flight concerned, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating air carrier.
79 ECJ Denise McDonagh v. Ryanair Ltd (C-12/11), January 31, 2013, para. 34 80
A-G Bot in its Opinion on McDonagh v. Ryanair, para 34
81 ECJ Wallentin-Hermann v. Alitalia (C-549/07), December 22, 2008
82 Recital 14 of the preamble states that an unexpected flight safety shortcoming is an extraordinary circumstance.
83
It seems that the test by the ECJ consists of two limbs: the technical issue must not be (i) inherent to the normal exercise of the activity and, (ii) must be beyond its actual control. But, it is not clear how the two limbs interrelate. With regard to the notion ‘inherent in the normal exercise of the activity’, the ECJ states that technical problems that come to light during maintenance of the aircraft or on account of failure to carry out such maintenance, cannot constitute ‘extraordinary circumstances’.84As to the normal exercise of the activity the ECJ explains that air carriers are confronted with various technical problems to which the operation of those aircrafts inevitably gives rise. The Court reasons that air carriers must take precautions to avoid technical issues that may endanger the flight safety. The ECJ goes on by stating that it cannot be ruled out that technical issues may still be regarded as exceptional circumstances if, for instance, the manufacturer or a competent authority was to reveal that the aircraft had a hidden defect, or when the technical issue was an act of sabotage or terrorism.85 In my opinion, here the ECJ explains the second limb: issues caused by third parties or by wholly exceptional climate difficulties86, are beyond the carrier’s control.
The definition by the ECJ gives rise to two different observations.87 The first observation is that these two limbs should be read together, which results in a one single composite test. In this case, it can be argued that unforeseeable technical issues are not within the airlines control. ‘Ordinary’ technical defects, which were neither foreseen, nor foreseeable, cannot be characterized as issues that are inherent to the normal exercise. The second observation is that the role of the second limb is merely to underpin the distinction between issues that are inherent (and thus within the carrier’s control) and issues that are not inherent (thus, outside the carrier’s control). This stricter interpretation leads to the conclusion that only issues that are caused by third parties or by wholly exceptional climate difficulties are not inherent to the normal exercise of the aircraft. All technical issues that are not beyond the carrier’s control (read: not caused by third parties) can therefore not lead to an extraordinary circumstance. We will now see how the Walentin-Hermann judgment is being interpreted and applied in the UK and Dutch courts.
84 Idem para. 25 85 Idem para. 26 86
I added this notion due to the McDonagh – Ryanair case, in which the eruption of the Icelandic volcano constituted an extraordinary circumstance. Denise McDonagh v Ryanair Ltd (C-12/11), 31 January 2013 87 This issue was raised before the UK’s Court of Appeal in Jet2.Com Limited v. Ronald Huzar [2014] EWCA Civ 791Cf. Prassl, J. EU Aviation Law before the English Courts: Dawson, Huzar and Regulation 261/2004, Air & Space Law, Volume 39, Issue 6 (2014)
The Interpretation by Dutch Courts
In the years between the judgement of the ECJ in Walentin-Hermann in 2008 and the day that the Air Regulation came into effect, there were two Dutch court cases for delayed flights due to technical errors. In these two cases, Dutch cantonal judges considered technical errors as unexpected flight safety shortcomings, and relieved the airlines from the obligation to pay compensation.88 In 24 of 34 Dutch court cases with regard to technical issues after the Walentin-Hermann judgment, compensation to the passenger has been awarded.89 In these cases it seems that the Dutch judges have used the ‘second observation’ of the Walentin-Hermann test, which is the stricter interpretation of technical issues.90 A defected engine of an aircraft of Lufthansa - which was discovered only one hour before departure - was not considered to be an extraordinary circumstance because it was inherent to the normal exercise.91 The same applied for some issues that had occurred after the ‘release of service’: a crack in the window of the aircraft, a damaged front panel, and a collision with a backstairs and a conveyor belt were seen as inherent.92 Only issues that were beyond the air carriers’ control were not considered as inherent to the normal exercise by the Dutch courts. Some of these damages were caused by bird-strikes93, which led to engine problems, and tail-strikes caused by the wind.94 Also rocks on the runway, which caused damages to the tires were seen as issues that were beyond the carrier’s control.95
As to the cases above, it seems like the Walentin-Hermann decision has resulted in a strict application of technical issues in Dutch courts. However, three cases show that some Dutch courts have used the Walentin-Hermann decisions as a single composite test (the ‘first
88 According to the cases on <http://rechtspraak.nl>. Rechtbank Haarlem, case 320153 / CV EXPL 06-8269, 03.01.2007 and Rechtbank Utrecht, case 491725 CU EXPL 06-10613, 27.06.2006
89
According to 34 cases consulted on <http://rechtspraak.nl> Note that some cases concerned compensation in the event of cancellation. However, the judgement of the extraordinary circumstance exception remains the same.
90
See page 19 above for the ‘oberservations’.
91 Rechtbank Haarlem, case 397257/ CV EXPL 08-11012, 06.05.2009
92 Rechtbank Noord Holland, case 546021/CV EXPL 12-1901, 07.06.2013, Rechtbank Noord-Holland, case 546034 CV EXPL 12-1910, 16.04.2013, Rechtbank Haarlem, case, 397257/ CV EXPL 08-11012, 06.05.2009 and Rechtbank Noord-Holland, case 546827 \ CV EXPL 12-2241, 28.05.2013
93
I.e. Rechtbank Amsterdam, case 1095984/CV EXPL 09-37234, 25.02.2011
94 Rechtbank Noord-Holland, case 548467/CV EXPL 12-2814 , 16.04.2013 and Rechtbank Noord-Holland, case, 546827/CV EXPL 12-2241, 28.05.2013
95
Rechtbank Noord-Holland, case 548467/CV EXPL 12-2814 , 16.04.2013 and Rechtbank Noord-Holland, case, 546827/CV EXPL 12-2241, 28.05.2013
observation’).96
In these three cases, the Dutch courts argued that the technical issues were unforeseen and unexpected, and since the regular maintenance measures have been taken, the issues were not inherent to the normal exercise of the aircraft. The carrier’s were not able to influence the events, and the technical issues were thus ‘outside the carrier’s actual control’. The first case concerned the break-off of one of the brakes of the aircraft during landing, which resulted in a delay of the return flight with the same aircraft that was planned after it.97 During the regular maintenance check, no damage at the brake was found whatsoever. TUI airlines reasoned that it could not be expected from them to replace parts of the aircraft that are not worn out, as preventive replacement is not inherent to the normal exercise of the service. The canton judge approved the argument, and ruled that the breakdown was unforeseen, and therefore constituted an extraordinary circumstance. The second case concerned the defect of a ‘stabilizer out of trim’ light, which occurred during the flight. According to safety procedures, the autopilot may not be used when this light is defect. The aircraft had to return to the airport, which caused a delay.98 Five months later, the same court of Haarlem ruled a similar judgment. In this case the issue was a clutch that broke when the aircraft was ‘off blocks’.99
Again, the airline was relieved from its obligation to pay compensation.
The Interpretation by UK Courts
In Jet2 v Huzar 100 the UK High Court was asked to clarify the extraordinary circumstance defense with regard to technical issues, which was invoked by carrier Jet2.Com. Mr. Huzar claimed compensation for a 24 hours delay suffered from his journey from Malaga to Manchester. On the basis of Walentin-Hermann, the counsel of Jet2.Com alleged that it was not obliged to pay compensation, since the delay was due to a wiring defect in the fuel valve circuit. Jet2.Com claimed that the issue was neither discovered nor discoverable by a reasonable regime of maintenance or on reasonable inspection. The wiring defect was
96
See page 19 for the ‘observations’
97 Rechtbank Oost-Nederland, case 832635/CV EXPL 12-6185, 18.02.2013 98 Rechtbank Haarlem, case 479830 / CV EXPL 10-11277, 25.01.2012 99
Rechtbank Haarlem, case 521649/CV EXPL 11-9998, 21.06.2012 100
therefore beyond the airlines’ control and constituted an extraordinary circumstance.101
The counsel further argued that the concept of ‘control’ is paramount, and the fact that it was inherent to the normal activity of the air carrier’s service, should not make a difference. The judge of first instance agreed with Jet2.Com but the decision was overturned by the Manchester County Court and upheld by the Court of Appeal. According to Lord Elias, “some technical issues may be foreseeable and some not, but all are inherent in the normal exercise of the carrier’s activity.” In other words: ordinary technical problems that cause flight disruption such as component failure and general wear and tear, should not be considered as an extraordinary circumstance. Lord Elias judged that compensation must be awarded in these cases. Only issues that are caused by third parties or by wholly exceptional climate difficulties are beyond the airline’s control.102
On October 30, 2014, the Supreme Court refused the permission to appeal this judgement because the application by Jet2.Com did not ‘raise an arguable point of law’.103
For now, the Court of Appeal’s decision can be regarded as the landmark case for future UK passenger cases regarding extraordinary circumstances and technical issues.104 The CAA calls on airlines to comply with the Jet2 v Huzar decision now that the exception for technical issues is clear and strict.105
Conclusion
From the cases above it can be concluded that in the Netherlands, courts do not always put carriers with delayed flights under economic strain. By ruling that unforeseen and unforeseeable technical issues are extraordinary circumstances, Dutch courts seem to more apportion the risks and liabilities. Apparently, some Dutch courts focus more on the balance between the economic liabilities for the operators and the level of protection for consumers. In the UK, the clear and strict decision by the Court of Appeal ensures that the interpretation of extraordinary circumstances remains in harmony with the consumer protective acquis
101 Article 5(3) Regulation (EC) No 261/2004 stipulates that ‘[…] is caused by an extraordinary circumstance which could not have been avoided even if all reasonable measures had been taken.’
102 Jet2.Com Limited v. Ronald Huzar [2014] EWCA Civ 791, para 33 103
See: <https://www.supremecourt.uk/news/flight-delay-compensation-pay-tv-retailers-in-administration.html> 104 A compliance report by the CAA shows that the vast majority of UK airlines respect the court’s decision. See: CAA Compliance Report, Financial comepnsation, technical faults and time limitations, 23.03.2015, accessibel at < http://www.caa.co.uk/docs/33/CAP%201275%20Compliance%20Report%20230315.pdf> 105
communautaire.106 Besides, passengers and airlines in the UK clearly know that technical issues, which are not caused by third parties or by wholly exceptional climate difficulties, are no exceptions for the right to compensation. In line with the heart of English legal culture, the judgement by Lord Elias can be seen as a pragmatic solution, as it concretely solves any possible problems with regard to the interpretation.107
A narrow interpretation of technical issues inflicts both safety and economic related risks. As to the safety of passengers, air carries may decide to continue their exercise with technical issues on board of the aircraft because they do not want to be exposed to a possible high number of financial claims.108 This could especially be the case with low-costs airlines that do not have enough equity to carry the potential financial burden. In my opinion, the Walentin-Hermann decision should not be interpreted in the light of giving delayed passenger protection (which basically is protection for loss of time) priority over safety concerns. I neither think this is the EC’s intention, since the preamble of the Air Regulations mentions ‘unexpected flight safety shortcomings’ as an example of extraordinary circumstances. Furthermore, the potential higher financial obligations for air carriers in the event of technical issues may counter-attack passengers, as air carriers may raise their ticket prices.109 However, this argument seems difficult to sustain, as a report published by the EC found that the EU rules on passenger rights corresponds approximately between €1 and €3 per one-way ticket.110 The report goes on to say that the EU rules only represent an average cost of between 0.6% and 1.8% of the airlines’ turnover.111
On the other hand, there are economical arguments in favour of the narrow interpretation by the UK Court of Appeal. One is that the carrier’s incentives to avoid the technical issues will
106
Prassl, J. EU Aviation Law before the English Courts: Dawson, Huzar and Regulation 261/2004, Air & Space Law, Volume 39, Issue 6 (2014)
107 Micklitz, Hans-W, ‘On the Intellectual History of Freedom of Contract and Regulation’, EUI Working Papers, Law 2015/09, European Regulatory Private Law Project
108
Cf. K. Arnold, EU Air Passenger Rights: assessment of the proposal of the European Commission for the
amendment of Regulation (EC) 261/2004 and of Regulation (EC) 2027/97, 38 Air & Space Law. 403–438
(2013) and S, Rai & L. Wilkinson, ‘Out of the Extraordinary: The Court of Appeal’s Judgement in Huzar v.
Jet2.Com’, DLA Piper, June 2014
109 J. Balfour, Airline Liability for Delays: The Court Justice Rewrites EC Regulation 261/2004’, (2010) 35 Air and Space Law 71, 73. Ryanair had introduced a levy of €2 per passenger in 2011, see:
<http://www.theguardian.com/business/2011/mar/30/ryanair-levy-compensation-eu261>
110 Commission Staff Working Document, Complaint handling and enforcement by Member States of the Air Passenger Rights Regulations, SWD(2014) 156 final, 07.05.2014
111
be optimized, since the air carries bare the costs of any technical failures.112 Another argument is that the narrow interpretation might also put an end to the abuse of the extraordinary defence by airlines. Because this argument is related more on the enforcement of the right to compensation, this argument will be discussed more extensively in Chapter IV. At final, the Waterborne Regulation also constitutes the force majeure exception. Article 20 of the Waterborne Regulation explicitly states that the waterborne operator is relieved from its obligation to pay compensation where the delay is caused by weather conditions endangering the safe operating of the ship. These weather conditions include, but are not limited to, strong winds, heavy seas, strong currents, difficult ice conditions, and extremely high or low water levels.113 As to other circumstances, the text of Article 20 is almost as ambiguous as the Air Regulation, and also here, the preamble gives a non-exhaustive list with examples.114 Other than the Air Regulation, the list does not mention ‘unexpected safety shortcomings’ or anything else about technical issues. This could be an indication that in waterborne transport, technical issues do not constitute as extraordinary circumstances. Not even issues that are caused by hidden manufacturing defects or other external powers that have caused the technical issues endangering the safe operation of the journey. If this really is the case – unfortunately, due to the lack of case law, we do not know – this could lay down a potential disproportional high financial burden on waterborne carriers. 115 From the perspective of the consumer, the elimination of the technical issue defence may be a welcoming development with regard to legal certainty. Waterborne carriers will not be able to mislead passengers by e.g. the allegation that the technical issues were beyond the carrier’s control. From a passenger safety perspective, the absence of an extraordinary circumstance for technical issues could bring waterborne passengers in danger. Alike the strict interpretation in air transport, waterborne carriers may continue to exercise their services even though it suffers from technical issues.
112
Supra note 102, in which the author applies the argument of C. Calabresi in ‘Some Thoughts on Risk
Distribution and the Law of Torts’ (1961) 70 Yale L.J. 499, 533 by analogy to the present context.
113 Recital 16 of preamble Regulation (EC) No 1177/2010
114 Recital 17: Extraordinary circumstances should include, but not be limited to, natural disasters such as fires and earthquakes, terrorist attacks, wars and military or civil armed conflicts, uprisings, military or illegal confiscations, labour conflicts, landing any sick, injured or dead person, search and rescue operations at sea or on inland waterways, measures necessary to protect the environment, decisions taken by traffic management bodies or port authorities, or decisions by the competent authorities with regard to public order and safety as well as to cover urgent transport needs.
115
Chapter IV
EFFECTIVE ENFORCEMENT?
Introduction
In a EU survey, over 20.000 passengers were interviewed with regard to the enforcement of the right to compensation. 65% of the respondents claimed that they had experiences with travel disruptions in the last twelve months, and 68% of these respondents indicated that they have never lodged a complaint for long delays.116 Half of the passengers who had faced long delays considered it to be useless to complain, followed by 22% who believed that the amount involved was too small, 19% thought the complaint process was too cumbersome and 9% did not know how and where to complain. These are worrying numbers, as passengers who are aware of their rights, should be able to exercise these rights as easy as possible. In other words, the enforcement of the Regulations must be effective in order for passengers to benefit from the (minimum) level of protection that is given to them. As touched upon in the introduction, the research will be mainly focused on the enforcement of the right to compensation.
The Private Enforcement
The first step that a passenger has to take to ask for compensation is to contact the operating carrier. Since the passenger and the operating carrier are the two contracting parties, it is their responsibility to respond and settle them. The majority of the respondents (68%) seem to know that in the event of a long delay, they must first address their complaint directly to the transport operator. The time limit for bringing actions for compensation depends on the domestic legal system of each Member State.117 Dutch passengers have to bring their action
116 Eurobarometer 420, “Passengers Rights”, December 2014. Survey conducted by TNS Opinion & Social at the request of the European Commission. <http://ec.europa.eu/public_opinion/archives/ebs/ebs_420_en.pdf>. 117 James Dawson v. Thomson Airways Limited [2014] EWCA Civ 845. Time limits have to observe the EU principles of equivalence and effectiveness. These two principles have to ability to limit the general principle of procedural autonomy. Cf. Sarrión, Joaquín, Effective Judicial Protection in Consumer Protection in the ECJ's Case Law (September 1, 2014). Available at SSRN: http://ssrn.com/abstract=2526709
within two years, whilst UK passenger benefit from a significant longer time limit of six years.118 However, to the frustration of EU passengers, the complaint handling of transport operators is often dissatisfactory.119 Especially airlines do not seem to comply with the rights under the Air Regulations effectively.120 One of the reasons why the enforcement of air passenger rights may be ineffective is due to the fact that the Air Regulation does not stipulate a time limit for the air operators to reply to the passenger complaints. The enforcement can therefore be a time consuming operation for the passenger. In contrast, the Rail and Waterborne Regulations stipulate a time limit of one month for the operators to reply.121
The main reason why the enforcement of the right to compensation with airlines is considered to be ineffective is because the definition of extraordinary circumstances is ambiguous and non-exhaustive.122 When passengers submit their complaints, air carriers have the ability to mislead passengers by invoking that the delay was due to an extraordinary circumstance, even though it might not actually be the case. And after the clear decision in Jet2 v Huzar the legal departments of UK airlines got more creative. Airlines now seem to have the tendency to tell passengers that the technical issue was due to a hidden manufacturing defect.123 In these situations, passengers are likely to give up their enforcement because they lack the legal knowledge to defend themselves, or they do not want to waste their energy to - what is often - a lengthy and bothersome procedure.124 Consequently, passengers will be left behind empty-handed. If the settlement of the complaint between the transport operator and the passenger
118
Section 9 of the Limitation Act 1980 stipulates a time limit of six years in the UK. In the Netherlands, the contract between the air operator and the air passenger is based on art. 8:1390 Dutch Civil Code. Art. 8:1835 Dutch Civil Code stipulates a two-year’s time limit to file a complaint. Cf. Rechtbank Amsterdam, case 1144935/CV EXPL 10-13361, 24.03.2011.
119
Supra note 113. Page 57 of the survey shows that 47% of the respondents reported that their complaint had been dealt with badly.
120 E.g. in March 2015, the CAA carried out a review report looking at the compliance of more than 15 major airlines. Aer Lingus, Jet2 and Wizz Air all face legal actions for breaching passenger rights in the UK. See: <http://www.caa.co.uk/application.aspx?appid=7&mode=detail&nid=2437>. Also see: Communication on the application of Regulation 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights COM (2011) 174 final.
121
Art. 27 Regulation (EC) No 1371/2007, Art. 24 Regulation (EC) No 1177/2010
122 Cf. U, Pachl, Passenger Rights for All, Extraordinary Circumstances at the Conference of the Greens, European Parliament, Brussels, 09/01/2013 and Koning, I. The Enforcement of Air Passengers’ Rights in
Europe, REDC 2011/2, p. 359-382
123 See the article: <http://www.thisismoney.co.uk/money/holidays/article-2918943/Airlines-new-excuses- reject-compensation-claims-flight-delays-4-budget-carriers-ask-consumer-claims-hold-ahead-crucial-European-court-decision.html>
124 Cf. Van Boom, Willem H. and Loos, Marco, Effective Enforcement of Consumer Law in Europe: Synchronizing Private, Public, and Collective Mechanisms (January 2008). Available at SSRN: http://ssrn.com/abstract=1082913
remains dissatisfied, the passenger has the option to enforce its right in court. The rights and obligations laid down in the transport Regulations have immediate effect in the national legal systems. Any (monetary) claims arising out of the Regulations can be enforced directly by the civil courts of the Member States.125 However, apart from procedural and formal obstacles126, recourse to national courts is often lengthy and costly. The costs of enforcement through court may easily outweigh the amount of the claim.127 Claims for long delayed flights can run up to €600, but only for long distance flights.128 The costs to go to court (counting up lawyer costs and procedural costs) can easily add up to over €2.000.129 In this case it would only be profitable to sue the airline in court when the air passenger had travelled a long distance with at least 4 or 5 closely connected persons. Rail and waterborne passengers can only receive a maximum of 50% of the ticket price as compensation, which means that rail and waterborne passengers are entitled to receive even a smaller amount of compensation.130 Therefore, it is often not worth a passenger’s while to take the matter to court.
National Enforcement Bodies
The right to an effective enforcement is one of the basic rights for passengers across the EU.131 To help passengers with the enforcement of their rights, the transport Regulations oblige Member States to designate a National Enforcement Body. With the nomination of NEBs in the Member States, the EC intends to provide passengers a quick, accessible and free system of complaint handling.132 NEBs operate as independent governmental statutory
125 Art. 288 TFEU 126
Such as a time limit to file a claim, or the requirement to first attempt an amicable settlement of the claim. Cf. Loos, M, Individual Private Enforcement of Consumer Rights in Civil Courts in Europe (January 13, 2010), Centre for the Study of European Contract Law Working Papers Series No. 2010/01. Available at SSRN: <http://ssrn.com/abstract=1535819>
127 Ibid.
128 Art. 7 Regulation (EC) No 261/2004
129 The calculation was made by Bart Combée (Director Dutch Consumer Organization Consumentbond) in the Panel Session during the 2015 IACL Conference at the University of Amsterdam, June 29, 2015
130 A one way, second class rail ticket from Amsterdam to Paris with NS International will cost me €132 if I leave tomorrow. Under the same conditions, a rail journey to Berlin will cost me €119. The maximum
individual compensation would then be respectively €65 and €60. If I would decide to leave from Rotterdam to Hull tomorrow by boat, the most expensive one-way ticket (without a car) would cost me €250, which results in a maximum compensation of €125. (Accessed <www.NSInternational.nl> and
<http://www.poferries.com/quote > on July 3, 2015). 131 Annex I of COM(2011) 898 of 19.12.2011 132
A European vision for Passengers: Communication on Passenger Rights in all transport modes, COM(2011) 898, 19.12.2011
