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Articles | Mon 23rd Nov, 2020
This week the Court of Justice of the European Union has provided still further guidance on the operation of the Denied Boarding Regulations (in Ryanair v DelayFix, Case C-519/19), the Court of Protection has provided guidance to experts on litigants’ capacity (in AMDC v AG, CI), the County Court has provided guidance on the operation of the QOCS regime (in Waterfield and others v Dentality Limited and others (No.2), unreported, 13th November 2020), and we learnt that the Defendant in Griffiths v TUI  EWHC 2268 (QB) is appealing the decision of Martin Spencer J, on which we have previously reported extensively. Not only that, but it was the Queen and the Duke of Edinburgh’s wedding anniversary on 20th November. We at 1CL love a commemorative plate, and what with The Crown and the Queen’s Gambit on the chambers telly, we felt the time was right for a Royal Edition this week.
King of the Skies? Ryanair v DelayFix, Case C-519/19
It seems that once the Court of Justice of the European Union starts commenting on Regulation (EU) 261/2004 (the Denied Boarding Regulations, do keep up), it just can’t stop. This week brought another decision, albeit this one focussed more on Regulation (EU) 1215/2012 (recast Brussels, to you and me).
The facts are not unfamiliar. A passenger had assigned to DelayFix his right to claim for €250 for the cancellation of a Ryanair flight. Ryanair refused to pay DelayFix, on the basis of an exclusive jurisdiction clause in its standard terms and conditions which stated that any claim against it had to be brought in the Irish courts.
The Polish court at first instance rejected Ryanair’s jurisdictional argument and accepted jurisdiction over the claim, on the basis that the jurisdiction clause was an unfair contract term within Directive 93/13 (the Unfair Contract Terms Directive – honestly, why don’t they just name them?), and that DelayFix was not bound by it in any event, not having been a party to the contract between the passenger and Ryanair.
Ryanair appealed on the basis that because DelayFix was not a consumer, they could not benefit from provisions of Eurolaw expressly designed to assist consumers (and not assignees). The appeal court referred the question to the CJEU of whether an assignee of consumer rights could be regarded as a consumer; or failing that, whether it could be treated as if it were a consumer.
The Warsaw Regional Court put the question in this way:
‘Should Articles 2(b), 3(1) and (2) and 6(1) of Directive 93/13 … and Article 25 of Regulation [No 1215/2012], as regards examination of the validity of an agreement conferring jurisdiction, be interpreted as meaning that the final purchaser of a claim acquired by way of assignment from a consumer, which final purchaser is not a consumer himself, may rely on the absence of individual negotiation of contractual terms and on unfair contractual terms arising from a jurisdiction clause?’
The CJEU answered the question in this way:
“Article 25 of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters must be interpreted as meaning that, in order to contest the jurisdiction of a court to hear and determine an action brought for compensation under 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 and against an airline, a jurisdiction clause incorporated in a contract of carriage concluded between a passenger and that airline cannot be enforced by the airline against a collection agency to which the passenger has assigned the claim, unless, under the legislation of the Member State whose courts are designated in that clause, that collection agency is the successor to all the initial contracting party’s rights and obligations, which it is for the referring court to determine. Where appropriate, such a clause, incorporated, without having been subject to an individual negotiation, in a contract concluded between a consumer, that is to say, the air passenger, and a seller or supplier, that is to say, the airline, and which confers exclusive jurisdiction on the courts which have jurisdiction over the territory in which that airline is based, must be considered as being unfair within the meaning of Article 3(1) of Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts.”
The clause was unfair, and the assignee could rely on that unfairness in asking the court not to apply it.
Ryanair must have seen this result coming, because between referral and judgment it made the €250 payment and then asked the Court not to consider the question referred to it, on the basis that there was nothing left for the parties to argue over. The Court gave this tactic short shrift, however, on the basis that although one refund had been made, others were still outstanding.
Self-styled King of the Skies Michael O’Leary is unlikely to be happy about this; claims management companies have been targeting Ryanair ever since the Denied Boarding Regulations came into force, and only the operation of Ryanair’s exclusive jurisdiction clause has been able to stop them (cf the decision of Liverpool County Court in Menditta v Ryanair, unreported, April 2017, in which the author had the honour of appearing). Now, it seems, it’s likely to be Open Season on such claims.
About the Author
Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at 1 Chancery Lane, Matthew Chapman QC and Jack Harding, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She was recently named Best Lawyers’ Travel Lawyer of the Year 2020/2021 and the Lawyer Monthly Women in Law Awards 2020: Personal Injury.
QOCS: Queen of Costs Schedules?
In Waterfield & Ors v Dentality Ltd & Ors (No2) (County Court at Oxford, 13th November 2020), HHJ Melissa Clark held that claimants in personal injury claims do not acquire the benefits of QOCS until the claim form is issued.
The proposed claim involved allegations of clinical negligence, and the Claimants sought a group litigation order (“GLO”). None of them had yet issued a claim form. The application for the GLO was dismissed on the basis that it was inadequate and premature. It was accepted that in those circumstances the Claimants, as the unsuccessful party, should pay the Defendants’ costs of the application. However, the Claimants asserted that they should have the benefit of QOCS, while the Defendants contended that, since there no proceedings afoot, QOCS did not apply.
Rule 44.13 provides that the QOCS regime applies “to proceedings which include a claim for damages – (a) for personal injuries;…but does not apply to applications pursuant to section 33 of the Senior Courts Act 1981 or section 52 of the County Courts Act 1984 (applications for pre-action disclosure)...”
The key issue was therefore the meaning of the word “proceedings” in rule 44.13. HHJ Clarke considered various authorities which had considered this definition. However, the parties had not found any where it was considered in the context of pre-action applications.
The Claimant submitted that the application was made in the course of their pursuit of claims for personal injury. The intention of the GLO application was to seek binding orders in relation to the issues in the proposed GLO order. It was therefore an intrinsic part of the claims which they would have issued had the application been successful. The CPR permitted them to make the application before their claims were issued and, had the applications been made after issue, there would have been no doubt that QOCS would have applied. The Claimants submitted that the narrow definition for which the Defendants contended undermined the purpose of the QOCS regime, namely to ensure access to justice. Finally, the Claimants relied on Wagenaar v Weekend Travel Limited t/a Ski Weekend  EWCA Civ 1105 in support of their submission that “proceedings” should be widely defined and given a purposive construction in light of the QOCS rules as a whole.
The Defendants contended that rule 7.2(1) provides that proceedings are started “when the court issues a claim for at the request of the claimant.” Therefore until a claim was issued there were no proceedings. Although rule 44.13 had been construed to include appeals (see Parker v Butler ) and Wickes Building Suppliers Limited v William Gerarde Blair (No2) (Costs)  EWCA Civ 17), there was no doubt that there were proceedings in those cases. Further it would be strange if applications for pre-action disclosure were excluded from the QOCS regime, but not rarer GLO applications.
HHJ Clarke rejected the Claimants’ submission that Wagenaar provided authority that the word “proceedings” in rule 44.13 should be widely defined. True, Vos LJ observed that it is “a wide word which could, in theory, include the entire umbrella of the litigation in which commercial parties disputed responsibility for the payment of personal injury damages.” However, he held that that would not be an appropriate construction and in that case gave it a narrower meaning (excluding Part 20 proceedings).
Vos LJ further held that the correct starting place for the construction of rule 44.13 was the QOCS rules themselves and that it should be given a purposive construction within the context of the QOCS regime as a whole. Nevertheless, HHJ Clarke held that she was justified in having regard also to rule 7.2(1). In her judgment Vos LJ did not direct himself to that rule because the question of whether “proceedings” encompasses pre-action claims was not a feature of the dispute before him. In the dispute before her, HHJ Clarke considered that rule 7.2(1) was not only relevant but directly on point.
HHJ Clarke accepted that she should still give rule 44.13 a purposive construction. In this context she considered what was said about the QOCS regime in Wickes and Parker v Butler, albeit in the different context of appeals. At paragraph 29 of Wickes, Baker LJ held that “…any appeal which concerns the outcome of the claim for damages for personal injuries, or the procedure by which such a claim is to be determined, is part of the “proceedings” under CPR rule 44.13.” The Claimants argued that therefore any procedure by which a claim is to be determined is part of proceedings for the purposes of rule 44.13, including their GLO application. HHJ Clarke rejected that submission holding that Baker LJ was intending to clarify that both appeals from a final determination of claims, and from interim case management decisions, would have the benefit of QOCS protection.
HHJ Clarke held that the issue in Wickes and Parks v Butler was fundamentally different. The claimants in those cases had “already accessed the protections of the QOCS regime in bringing their claims.” The issue was whether they should then be excluded from it at the appeal stage. In the case before her, the Claimants had the option of making the GLO application before issuing their claim form, or issuing the claim and then making the same GLO application when they would, it was agreed, have the benefit of QOCS.
She concluded that the general rule at 7.2 did not conflict with any specific rule and that defining the word “proceedings” in rule 44.13 in accordance with rule 7.2 did not conflict with the aim and purpose of the QOCS regime. Accordingly, “proceedings” for the purposes of rule 44.13 start when the court issues a claim form and so the QOCS rules do not apply to pre-action applications.
This is only a county court decision and does not, therefore, strictly set a precedent. However, those representing claimants will naturally be concerned about the possibility that their clients do not have QOCS protection until a claim is issued.
In practice, it is rare that pre-action cost orders will be made. PAD applications were already expressly excluded and GLO applications are rare. A claimant who intimates a claim and then decides not to pursue it before issue will not be faced with the deemed cost order which is made on discontinuance of a claim after issue. Further, the cost consequences of rule 36.13 strictly only apply where a Part 36 offer is accepted after the issue of proceedings (unless incorporated into the settlement agreement – see the commentary in the White Book at 36.7.1).
One perhaps surprising effect of this decision, however, may be that it will encourage some claimants to issue earlier than they otherwise would have in order to secure QOCS protection. This would seem to run contrary to the general purpose of innovations such as the pre-action protocols to encourage the resolution of disputes in whole or in part without the need to issue a claim.
About the Author
Ella Davis was called to the Bar in 2013. She now undertakes work in the cross border field on behalf of both Claimants and Defendants. She has particular expertise in claims involving allegations of fundamental dishonesty and has a good deal of experience in conducting trials around the issues which arise from such allegations.
Never let it be said that we at 1CL don’t have our priorities right. We know that our readers have been concerned about Brexit; and we know why. But Her Majesty’s Government has found time in its busy schedule to address the issue we’ve all be worrying about for some time: Duty Free. It has now provided guidance on the Duty Free limits for passengers returning to the UK from abroad: https://commonslibrary.parliament.uk/research-briefings/sn01223/
We at 1CL generally use the chambers private jet to go on our hols, of course; but with the value of Duty Free booze on private flights capped at £390, we’d barely be able to bring two bottles of champagne back with us. Even travelling with the masses, we’re staring down the barrel of a mere 18 litres of still wine each. Enough to keep us in 1CL quizzes for a couple of months, granted, by which time we must hope that the various lockdowns and tiers we’ve all been enduring will be a thing of the past. Just in time for the first of Her Majesty’s birthdays next year.
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