The Dekagram: 22nd May 2023

Articles, News | Mon 22nd May, 2023

This week the team was aghast to read an extremely surprising judgment interpreting Regulation (EU) No.261/2004 (‘the Denied Boarding Regulation’). No, not the decision of the Court of Justice of the European Union in the pilot death cases (discussed below) – but the extraordinary decision of the Amtsgericht Hannover that Aperol spritz is not a ‘refreshment’ within the meaning of Article 8 of the Regulation and is therefore not reimbursable in the event that passengers purchase it after their flights have been delayed. The court held that alcoholic beverages are not refreshing, contrary to all sense and reason, and also to a good deal of advertising the team has been subjected to over the years. In contrast, the airline accepted that the Camden Hells purchased by the passengers could be regarded as refreshing, and reimbursed the cost of them; and the court considered that since craft beer might be non-alcoholic, this might have been a reimbursable expense in any event. The team is at a loss to understand the decision; surely a drink can be both refreshing and alcoholic? We consider ourselves to have something of an expertise in the subject and stand ready to give evidence in support of the proposition at any time and in any jurisdiction. And there is authority for it, too – in 2019 the Amtsgericht Dusseldorf held that champagne cocktails and dessert wine are reimbursable refreshments. It’s always facinating when local courts conform to stereotype; we would be interested to know whether Newcastle County Court would consider brown ale a refreshing beverage, or Dublin District Court reject the notion that Guinness might be reimbursable.

Does an unexpected absence, due to illness or death constitute ‘extraordinary circumstances’ in flight delay compensation claims?

Introduction

The Court of Justice of the European Union has ruled that the unexpected death of a co-pilot just before a planned flight was due to depart does not amount to ‘extraordinary circumstances’ in exempting airline carriers from paying compensation to delayed passengers.

The judgment can be accessed here.

The factual background

On 17^th July 2019, TAP Portugal was operating a flight departing from Stuttgart to Lisbon, with a scheduled departure time of 06:05am. That same morning, the co-pilot who was due to operate the flight was found dead in his hotel room in Stuttgart. The entire crew was shocked and declared itself unfit to fly. No replacement staff were available since the flight concerned was to take place from outside the ‘TAP base’. The flight was cancelled. A replacement crew were flown to Stuttgart and the passengers were transported on a replacement flight, which departed for Lisbon that afternoon at 16:40pm.

TAP refused to pay the passengers compensation provided for in Article 7(1) of the Regulation No 261/2004 claiming that the unexpected death of the co-pilot was an extraordinary circumstance within the meaning of Article 5(1) of that regulation.

Legal Framework

Article 5 of that regulation, headed ‘Cancellation’, provides:

“1. In case of cancellation of a flight, the passengers concerned shall:

…

(c) have the right to compensation by the operating air carrier in accordance with Article 7, unless:

…

3. An operating air carrier shall not be obliged to pay compensation in accordance with Article 7, if it can prove that the cancellation is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken.”

Article 7(1) of that regulation, which is headed “right to compensation” is as follows:

“1. Where reference is made to this Article, passengers shall receive compensation amounting to:

In determining the distance, the basis shall be the last destination at which the denial of boarding or cancellation will delay the passenger’s arrival after the scheduled time.”

The decision

It is settled case-law that the concept of ‘extraordinary circumstances’ within the meaning of Article 5(3) of the Regulation No 261/2004 refers to 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 that carrier’s actual control; those two conditions are cumulative and their fulfilment must be assessed on a case by case basis.

The Court’s starting point was determining whether the unexpected absence, due to illness or death of a crew member, shortly before the flight’s scheduled departure, is capable of constituting, by its nature or origin, an event which is not inherent in the normal exercise of the activity of the operating air carrier.

It was held that measures relating to staff do fall within the normal exercise of the carrier’s activities, which is also true of measures relating to working conditions and renumeration of the staff of such a carrier, including measures relating to crew planning and staff working hours.

From a legal point of view, the unexpected death of a member of staff, though tragic and final, is no different from a flight than cannot be operated because a member of staff has unexpectedly fallen ill shortly before the flight. The carrier must expect such unforeseen events to arise in the context of planning its crews and the working hours of its staff.

The result is that Article 5(3) must be interpreted as meaning that the unexpected absence – due to illness or death of a crew member whose presence is essential to the operation of a flight – which occurred shortly before the scheduled departure of that flight, does not fall within the concept of ‘extraordinary circumstances’ within the meaning of that provision.

About the Author

Francesca Kolar was called in 2018 and acts for both Claimants and Defendants in claims spanning all areas of chambers’ practice, including travel and cross border work. She also has an interest in ethics and human rights, having undertaken a Masters degree in the subject. Prior to pupillage she spent two years teaching debating to students in inner-London secondary and primary schools, for the social mobility charity Debate Mate.

Interested in Interest? There’s Been Another One

Hot on the heels of the judgment in Nicholls, AXA Assistance v Mapfre and Woodward v Mapfre, unreported, 4^th May 2023, which deals with the nature and recoverability of Spanish penalty interest, Ritchie J has handed down judgment in Smout v Wulfrun Hotels Limited [2023] EWHC 1128 (KB), its companion piece on the English equivalent provisions.

At first instance the Claimant had obtained judgment against the Defendant for damages in respect of pain, suffering and loss of amenity, and interest on those damages pursuant to s.69 of the County Courts Act 1984 at a rate of 6% rather than the more conventional 2% rate. The Recorder had increased the rate on the application of counsel for the Claimant to take into account the manner in which the Defendant had defended the claim.

From the off the litigation had been characterised by the extraordinary manner in which the Defendant’s representative conducted himself. As the company secretary for the Defendant company, he clearly did not feel himself bound by the shackles of courtesy recognised by most legal representatives, and he made the most of this freedom in correspondence with the Claimant’s (forbearing to the point of saintly) solicitors. In his judgment Ritchie J set out some egregious examples of his correspondence, which he (fairly) described as ‘abusive’. One exchange in particular will suffice to give readers a flavour of the parties’ conduct. The Defendant’s representative sends this zinger to the Claimant’s solicitor:

“rather than looking at things in objective fashion (sic) Mr. Khan you had impulsive urge to making claims against our company without carrying out necessary due diligence. If you were a solicitor, I would have you struck off for incompetence but unfortunately you never made the grade.”

In response, Mr Khan replies in measured terms:

“may I remind you that all such correspondence are able to be put before the judge dealing with the case, and so you may wish to moderate your tone in future.”

The judgment does not relate whether or not this response had the desired effect, but it seems unlikely.

At trial the Recorder took such a dim view of the Defendant’s intemperate correspondence that he acceded to the submission that interest should be awarded on damages for pain, suffering and loss of amenity at a rate of 6% and not 2% – this in turn had the knock on effect that the Claimant bettered a Part 36 offer, and triggered the usual Part 36 consequences, all of which were ordered.

The Defendant appealed on the basis that the Recorder was wrong to award what was effectively penalty rather than compensatory interest, and that therefore the interest award was too high, meaning that the Part 36 offer ought not to have been bettered and the consequences should not have been triggered.

Ritchie J considered the rationale underpinning the award of interest in the English courts, namely to compensate claimants for delay in receiving the damages to which they are entitled. Having given an interesting overview of the relevant authorities, he concluded:

“There are various methods for the Courts to deal with inappropriate conduct by parties to litigation. Costs can be awarded on an indemnity basis. The party can be deprived of the costs it might otherwise be awarded as a result of its conduct. However, no authority has been put before me that abusive or unprofessional conduct by the representative of a Defendant company has previously justified a tripling of the conventional interest rate awarded on damages for pain, suffering and loss of amenity. Whilst it is true, that the statute provides a broad discretion when awarding interest on damages generally in all forms of litigation, for all types of loss, it is clear that the body of case law built up since the 1970s has, for good reason, produced the conventional interest rate on awards for pain, suffering and loss of amenity…

In my judgment, on the authorities, it was clearly wrong in law and not justifiable on the facts for the Recorder to award interest on pain, suffering and loss of amenity at 6% based on conduct. Interest on damages is awarded to compensate the Claimant for being kept out of his compensation not to punish him for his poor conduct in defending the claim.”

On recalculation of the interest award, the total award for damages and interest came to less than the Claimant’s Part 36 offer, and the Part 36 consequences were not triggered. This may be regarded as something of a pyrrhic victory, however; Ritchie J was persuaded that he should award indemnity costs against the Defendant from the date of the start of its abusive correspondence, on account of its ‘rude and abusive’ tone, and there was no order for costs on the appeal notwithstanding that it had been successful.

Comment

As well as providing an example of what happens when litigation correspondence is untrammeled by any considerations of courtesy or professionalism, this case reminds us that the English and Welsh provisions relating to interest are compensatory, not punitive. In this regard they are entirely different to the Spanish provisions we have looked at recently. Might it therefore be argued that the courts of England and Wales should not apply Spanish penalty interest as a matter of public policy, the legislature and judiciary having determined that interest provisions should not be used in this way? Or do different considerations apply in cases with a cross border element? The author looks forward to finding out.

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 was appointed a KC in March 2023.