Jet2 v Huzar

Posted by Daniel Scognamiglio on
The Court of Appeal helps us understand when an airline can rely on the 'extraordinary circumstance' defence for a claim brought under the Denied Boarding Regulations.

Summary

An airline will normally need to pay compensation if there was a technical fault to a plane that caused a delay of three hours or more in the EU.  If there is an ‘extraordinary circumstance’ an airline will usually not need to pay any compensation. In this case a technical fault that can be detected during an inspection was not an ‘extraordinary circumstance’ and the airline therefore needs to pay damages.

Why it is important for insurers

Travel insurers will often be the first port of call for passengers who have suffered a delay. Subject to policy wording, travel insurers should be looking to recover payments over the last six years to see what can be recovered from an airline where an airline has argued that a technical fault was an ‘exceptional circumstance’ and refused to return payments made to a passenger for a delay.

The Case

Introduction

The Court of Appeal yesterday followed a European ruling that is helpful for passengers who have had their flight delayed or cancelled. It is helpful that the English Court has followed the European ruling. The claim was rather modest and this has left a precedent. The point at issue was whether a technical fault with the airplane was an 'extraordinary circumstance' that would exonerate the airline of their liability to pay compensation for a delay.

Briefly, Mr Huzar and his family had a flight delayed by 27 hours at Malaga airport when they were trying to return to the UK. Mr Huzar and his family were fed and watered and were provided with accommodation, but the airline would not offer any compensation for the delay. Jet2.com claimed that the fault with the airline was an 'extraordinary circumstance' as defined by the European regulations. If the airline could show ‘extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken’ they would not have to pay compensation.

The airline won at the small claims hearing, and then lost on appeal in the county court. The airline then appealed to the Court of Appeal.

The Law

The European Regulations (Denied Boarding Regulations 261/2004) state that where there is a delay of 3 hours or more compensation is payable by the airline as follows:

  • 250 Euros for flights of 1,500 km or less;
  • 400 Euros for intra-community flights of more than 1,500 km and all other flights between 1,500 and 3,500 km;
  • and 600 Euros for all flights not in the aforementioned categories.

In addition they need to provide food, water, accommodation and transportation. The obligations only apply to flights leaving a Member State of the European Union or to airlines that are based in a Member State.

In this case there was a wiring defect in the fuel valve circuit that apparently could not have been prevented by prior maintenance or visual inspection. Jet2 argued that it was unexpected, unforeseen and unforeseeable and as such amounted to an “extraordinary circumstance”.

So as to not pay compensation, the burden is on the carrier to show that:

  1. the cancellation must be caused by 'extraordinary circumstances'; and
  2. the carrier must have been unable to avoid the cancellation even by taking all reasonable measures.

It had already been decided that the airline had taken all reasonable measures. The only issue in dispute was whether this fault was an ‘extraordinary circumstance’.

The European Court had previously looked at a cancellation due to a technical fault in Wallentin-Hermann v Alitalia [2009] and decided that technical problems in themselves cannot constitute ‘extraordinary circumstances' where the come to light or should come to light during routine maintenance. In that case there had been an engine failure that meant the passenger arrived three and a half hours late.

There are some key passages that help define ‘extraordinary circumstance’ and as to why a technical fault is not an ‘extraordinary circumstance’:

'Air carriers are confronted as a matter of course in the exercise of their activity with various technical problems to which the operation of those aircraft inevitably gives rise. It is moreover in order to avoid such problems and to take precautions against incidents compromising flight safety that those aircraft are subject to regular checks which are particularly strict, and which are part and parcel of the standard operating conditions of air transport undertakings. The resolution of a technical problem caused by failure to maintain an aircraft must therefore be regarded as inherent in the normal exercise of an air carrier's activity. '

Technical problems that the airline was informed of by a manufacturer or due to acts of sabotage or terrorism were given examples of technical problems where the airline can claim there is an ‘extraordinary circumstance’.

‘..the fact that it was unexpected and unforeseeable is also irrelevant. The reality is that once a technical problem is identified it is inherent in the normal activity of the air carrier to have to resolve that technical problem.’

In McDonagh v Ryanair Ltd The European Court described ‘extraordinary circumstance as ‘something out of the ordinary.’

The limitation period for bringing this type of claim is six years in England/ Wales. There was an argument that such claims were limited to two years, but that was rejected by the by the European Court and it is a matter of domestic law, which in England/ Wales means it will be six years.

The Judgement

The Court of Appeal in Huzar considered the various authorities, the Regulation and the submissions from the various barristers and in his Judgement Elias LJ ‘In my view, the difference between the two arguments can, without undue distortion, be encapsulated in this way. The appellant is in effect construing the test as follows: “events by their nature or origin are not inherent in the normal exercise of the activity of the air carrier because they are beyond its actual control.”

The key concept, on this test, is actual control; if the event is beyond control it is necessarily not inherent in the normal exercise of the activity. By contrast, the respondent is saying; “events by their nature or origin are not inherent in the normal exercise of the activity of the air carrier and therefore are beyond its actual control.” The defining concept on this test is the notion of what is inherent in the normal exercise of the carrier’s activities; if it is not inherent, it is beyond control and vice versa.’

He goes on, helpfully for the consumer: the fact that a particular technical problem may be unforeseeable does not mean that it is unexpected. Problems of this nature frequently arise’.

The Court of Appeal did reach the same conclusion as the County Court Judge in that the airline should pay compensation, but with different reasoning, which may be of some consolation to the appellant. However the Judgement is clear. A technical fault that has been discovered or should be discovered is not an ‘extraordinary circumstance.'

About the Author

Daniel leads our travel insurance team. He is a specialist in multi-jurisdictional disputes, travel insurance litigation and tour operator liability and is qualified as a solicitor in England and Attorney at Law (non-practising) New York.

Daniel Scognamiglio
Email Daniel
023 8085 7339

View Profile