The Dekagram 27th February 2023

Articles, News | Mon 27th Feb, 2023

Another week, another update on the Retained EU Law (Revocation and Reform) Bill, a piece of legislation which has the potential to disrupt the underpinnings of almost all of the law we in the travel and cross border world rely on as informing our worldview. We were reassured to see this week that a brace of peers, Baroness Randerson and Lord Fox, have tabled amendments to the Bill designed to ensure that the Package Travel and Linked Travel Arrangements Regulations 2018 and the Denied Boarding Regulations (Regulation (EU) No.261/2004) are saved from the REUL bonfire. These amendments are intended to highlight that in the absence of any definitive list of regulations the government intends to retain as part of EU-derived law, Parliament is voting on the destruction of swathes of laws, some of which provide important legal clarity to consumers and industry players alike. We feel better now that someone has noticed that the PTRs could be rescinded by accident by the end of 2023.

In the meantime, this week’s Dekagram features another in our series of Scottish cases, this one on the Montreal Convention; and a further addition to the glut of cases considering the operation of Part 36.

Agency and the Montreal Convention

In May 2022 we wrote about our fascination with the Scottish courts and in particular the Outer House of the Court of Session’s judgment in Mather v (1) Easyjet Airline Company Limited, (2) DRK Hamburg Mediservice [2022] CSOH 40. The matter subsequently ended up before the InnerHouse on an appeal (“reclaiming motion” in Scottish legal terminology) from Easyjet. Last week the Inner House upheld (almost entirely) the decision of the Outer House.

The Facts

The pursuer, who is paraplegic, had booked an Easyjet flight from Edinburgh to Hamburg, notifying the airline when he did so of his need for special assistance in embarking and disembarking the aircraft. The airline’s standard terms provided that:

“The provision of assistance through the airport, onto the aircraft, off the aircraft and through the arrivals process at the destination is the responsibility of the relevant Airport Authority.”

The flight duly arrived at Hamburg and Mr Mather was deplaned using an aisle wheelchair and then an airport wheelchair. One of the assistance personnel pushed the wheelchair ‘quite briskly’ between 10 and 20 metres up the ramp of the air bridge towards the terminal building, whereupon the wheelchair stopped very abruptly and Mr Mather fell from it, landing on his legs on the marble floor just inside the threshold of the airport building and sustaining compound fractures to both legs below knee level as a result. It was subsequently established that the accident was caused by the front wheels of the wheelchair hitting the raised edge at the point where the air bridge joined the airport building, formed by a narrow metal ramp at the join between the higher and lower floor levels.

Mr Mather sued Easyjet on the basis that the accident had occurred during the course of disembarkation within the meaning of the Montreal Convention. The airline contended that its liability was limited under the Convention because it had not been at fault for the accident; the assistance personnel were employed by DRK to carry out duties owed by the airport. In the alternative it sought a contribution or indemnity from DRK under the Civil Liability (Contribution) Act 1978. DRK averred that its personnel had been acting as agents for the airline in undertaking its duty to keep passengers safe whilst they disembarked, but that in any event that the accident had been caused by negligence on the part of the airport, for which it was not liable. It denied that the Act was applicable to the proceedings, since its contribution liability was governed by German law as the law of the tort.

The Decision of the Outer House

Back in May 2022, the Outer House undertook a review of the relevant caselaw under the Convention and held that ‘the test for determining whether a part was the carrier or an agent of the carrier was initially taken to be whether the task the party was undertaking was one which the carrier would otherwise be required by law to provide but this has developed into whether the task was executed in furtherance of the contract of carriage.’ Applying this test in this case DRK was acting as Easyjet’s agent even though there was no contractual relationship between the two companies, because it was disembarking the passenger from the aircraft at the time of the accident.

“What matters is that the services provided to easyJet were in furtherance of the contract of carriage by assisting Mr Mather to disembark the flight. They were also, in terms of the earlier test, services which easyJet would themselves have been required by law to provide had DRK not provided them as they were part of the process of disembarkation.”

The judge found as a matter of fact that the accident was due to the negligence of DRK’s staff in rushing; therefore Easyjet was liable to Mr Mather in an unlimited amount under the Convention.

As for the position as between Easyjet and DRK, the relevant law was that of Germany and not that of England and Wales, because DRK could not be bound by the choice of jurisdiction clause contained in Easyjet’s standard terms, and because the relevant tortious applicable law was that of Germany. Under German law Easyjet’s claim against DRK was time-barred, and the position was therefore that although it was liable for the acts and omissions of DRK’s employees, it could not claim a contribution or indemnity from their employer.

The Decision of the Inner House on Appeal

On appeal, the Inner House noted that the words of the Montreal Convention, being an international treaty intended to bring uniformity and certainty to carrier liability , must be given an “autonomous meaning”. As such, the jurisprudence of other contracting states should be considered, with a view to promoting consistency.

The court observed that the Convention “does not define ‘agent’”. Scots law does not precisely define that term either, but that point of domestic law was of “peripheral relevance”. The courts of other jurisdictions had given it meaning, particularly those in the United States.

The court reviewed a recent such case, Vumbaca v Terminal One Group Association 859 F Supp 2d 343 (EDNY 2012), in which senior district judge Weinstein set out the US jurisprudence, and found the construction given was that a party would be acting as agent where the services provided were “a necessary part of the air carrier’s relationship with its passengers [as] demonstrated by the fact that …[the party was] contractually indemnified by [the carrier] for their services”.

Another US case, Carroll v United Airlines 325 NJ Super 353 (1999), also involving a wheelchair-bound passenger suffering injury on being disembarked by the employee of a company,  held the company to be an agent because it was acting “in furtherance of carriage”. That phrase had been used in other US cases as a test for determining whether a person is an agent of the carrier. It provided “a neat, clear, and easily understood principle”, and that was the test which the Inner House adopted in the present appeal.

Applying that test to the facts, there was little difficulty in determining that the employee was acting in furtherance of the contract of carriage, because it was conceded that the transportation of the pursuer (i.e. the claimant) “to at least the arrivals gate was part of the operation of disembarkation in terms of Article 17 of the Montreal Convention […] the gate-to-gate principle […] is a sound one. It too neatly and clearly defines the limits of the contract of carriage for the benefit of airlines, passengers and insurers”.

The court was of the view that “although there may be minor variations from airport to airport, the contract of carriage for all passengers commences, at the latest, when the passenger is checked through the gate at the airport of departure. It is at that point that the passenger for a particular flight, operated by a particular airline, is isolated from other airport users. The contract continues until the opposite occurs at the destination and the passenger is released into parts of the airport used by, amongst others, the passengers of other airlines”. Between those points, the passenger has “no way out, is restricted in his/her movement and needs guidance at least by the air carrier to get out. He/she is in [the] custody of the air carrier”, and the airline was responsible for the actions of all those assisting passengers along this route. The court rejected the suggestion that the decision would cause difficulty for insurers assessing risk because the neat and clear test meant “the extent of the airline’s liabilities will be clearly delimited.”

Conclusion

Aside from a minor point on the second defendant’s liability to the pursuer, the Inner Court upheld the Outer Court’s judgment. The decision brings useful affirmation of the construction to be placed on Article 17 of the Montreal Convention, as well as confirming that a claim would also lie against the second defendant under the relevant domestic German law where the Convention did not apply (i.e. against the second defendant other than in its capacity as an agent for the carrier).

About the Author

Called in 2011, prior to pupillage Conor Kennedy spent two years working with a leading insurance law firm, gaining experience across regulatory, employment, leisure, travel and public sector teams. He has a varied civil practice and is accredited for Direct Access instruction, but has a particular interest and expertise in claims involving fundamental dishonesty.

Part 36 and 90/10 Offers

Collins Rice J has been having a busy time of it lately. Fresh from hearing the appeal in Sherman v Readers Offers Limited, which we anticipate will lead to further elucidation of the test for cancellation/significant alteration of a holiday under the Package Travel, Package Holidays and Package Tours Regulations 1992, on 23^rd February she handed down judgment in Mundy v TUI UK Limited [2023] EWHC 385 (Ch), in which she grappled with the thorny issue of the potency of rejected offers.

The facts

Mr Mundy had brought a claim against the Defendant for food poisoning acquired during an all inclusive holiday to Mexico. So far, so ho hum. He sought damages of between £25,000 and £30,000, but was awarded £3,700 in respect of that head of loss. Again, a not unusual outcome, albeit no doubt personally irksome for Mr Mundy and his representatives. In respect of costs, the judge at first instance ordered the Defendant to pay the Claimant’s costs up to 19^th December 2019 (the date of expiry of the time for acceptance of the Defendant’s offer) and the Claimant to pay the Defendant’s costs thereafter, to be assessed on the standard basis if not agreed. Meanwhile, the Claimant’s damages were to be held by the Defendant on account, the Defendant to be entitled to set off its costs against the Claimant’s damages and costs. Nothing of any note to see here, we hear you cry.

The appeal

But Mr Mundy appealed against the costs order on the basis that on 2^nd November 2018 he had offered to accept the sum of £20,000 and, separately, to settle the claim on the basis of a 90/10 apportionment in his favour. The Defendant did not accept either offer, but (on 28^th November 2019) offered to settle the claim in the sum of £4,000 – it was this offer that operated to deprive Mr Mundy of his costs after 19^th December 2019.

The Claimant founded his appeal on the contention that he had beaten his liability offer – at trial the Defendant had been found to be 100% liable for his illness. At first sight this appears to be a well founded argument; 100% beats 90%, surely. However, the judge found that the offer was not a genuine attempt to settle the claim, observing that there was no realistic prospect of a finding of contributory negligence (notwithstanding that – as usual – it had been pleaded in the Defence):

“It seems to me that the only sensible or realistic way to interpret the claimant’s Part 36 offer is that he was offering to accept 90% of the value of the claim. If that is correct, he failed to recover a judgment which was at least as advantageous to him as the proposals contained in his Part 36 offer, and the CPR 36.17(4) consequences cannot follow. If I am wrong in that, and the claimant’s offer should be understood as discounting for the contributory negligence plea, then I take the view that in all the circumstances it would be most unjust for the usual consequences to follow, having regard in particular to CPR 36.17(5)(e).”

The Defendant, on the other hand, had made a clear offer in a sum greater than that awarded at trial. It had therefore beaten its offer, although the situation did not call for indemnity costs to be awarded thereafter.

“Mr Mundy’s 90/10 liability offer was not an offer to settle the claim, or a quantifiable part of or issue in the claim. It is difficult to fit into the Part 36 scheme altogether. If accepted, in what sense will that produce the result that ‘the claim will be stayed’ (CPR 36.14(1))? If rejected, in what sense does that produce a quantifiable proposition capable of being compared with what a claimant got ‘in money terms’ from a judgment – that is, from the judgment itself and not from a private algorithm pre-attached to the judgment? A simple case like this in which liability is not fought on a distinct issues basis but in its entirety cannot produce anything other than a 100% result on liability either way; the value of a win on liability ‘in money terms’ is difficult if not impossible to separate from the quantum of damages awarded, and that will always and axiomatically be more advantageous to a claimant than 90% of it. There is a problematic degree of artificiality in all of this…

the effects of rejection of the liability offer do not speak for themselves. And the effect proposed by Mr Mundy in this appeal goes far beyond incentivising the avoidance of a liability trial. It makes a 90/10 liability offer into a means for a claimant, who fails to beat a money offer to settle his claim, to recoup a substantial premium for ‘winning’ the case nevertheless. It is an attempt at a unilaterally imposed insurance policy to reverse the losses otherwise provided for by CPR 36.17. It is, in other words, an attempt to use CPR 36.17 against itself, contrary to both its letter and its spirit.”

The offer made by the Claimant therefore did not carry Part 36 consequences, because in an all or nothing case it was a nonsense to try and compare 90% with 100% of liability other than in terms of the sum eventually awarded – and the Claimant had not beaten his money offer; far from it. Indeed:

“It may be that 90/10 liability offers, where no issue of split liability genuinely arises, largely need to rely on any inherent attractiveness and incentivisation they may have in the context of a particular case to achieve an outcome – agreement to avoiding a liability trial – if that is in the commercial best interests of both parties. It may be that they cannot rely on the incentivisation furnished by the ‘Part 36’ consequences of rejection. It may be, in other words, that in a simple case like the present they are all carrot and no stick. If so, that is a result which seems to me entirely consistent with the letter and spirit of the Part 36 code, and its focus on backing sensible money offers to settle claims or quantifiable parts of claims.”

The appeal was therefore dismissed, save on the ground that the question of set-off had since been resolved in favour of the Claimant by the Supreme Court in Ho v Adelekun [2021] UKSC 43 (now, of course, reversed by the changes to the CPR coming into force on 6^th April 2023).

Comment

Although at first sight surprising that a finding of 100% liability did not operate to activate the consequences of a 90% apportionment offer, it is suggested that the decisions at first instance and on appeal must clearly be right. As was shown by the money offer he made and by his subsequent rejection of the Defendant’s offer of £4,000, he was not prepared to take a sum of or less than the sum awarded, and cannot therefore be said to have been willing to make a Part 36 offer which, in real terms, he bettered at trial. The only way of determining whether an offer has been beaten, in an all or nothing case, is to compare monetary offers made and rejected with the eventual sum awarded.

Practitioners should therefore make monetary offers whenever possible in all or nothing cases, although liability apportionment offers will of course remain a highly useful tool in their armoury in cases involving contributory negligence or other interlocking issues.

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 Deka Chambers, Matthew Chapman KC, Jack Harding, Dominique Smith, Tom Yarrow and Henk Soede, 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 undertakes purely domestic high value personal injury work as well as cross border work and has a wealth of experience of difficult and sensitive cases. She will be appointed a KC in March 2023.