Members' Research Service By / December 3, 2015

Court of Justice rules on passenger compensation for flight delays

Written by Rafał Mańko According to EU law, passengers have the right to a fixed level of compensation if their…

© whitelook / Fotolia

Written by Rafał Mańko

According to EU law, passengers have the right to a fixed level of compensation if their flight is cancelled or subject to a long delay. However, airlines can escape liability if they prove that ‘extraordinary circumstances’ caused the cancellation or delay. The Court of Justice of the EU has recently ruled that unexpected technical problems cannot count as ‘extraordinary circumstances’.

Legal background

Airline liability towards passengers
Court of Justice rules on passenger compensation for flight delays
© whitelook / Fotolia

The Airline Passenger Compensation Regulation 2004 (‘the Regulation’) provides for compensation and assistance to passengers in the event of denied boarding and flight cancellation as well as long delays to flights. The Regulation sets a fixed scale of compensation, providing for €250 in the case of short flights (up to 1 500 km), €400 in the case of medium-distance flights (1 500-3 500 km) and €600 in the case of long-distance flights (over 3 500 km). Intra-EU flights of over 1 500 km always count as medium-distance flights. If the airline offers a re-routing to passengers within a certain time, as specified by the Regulation, the compensation may be reduced by 50%. For long-distance flights this time is set at 4 hours.

Exception in case of ‘extraordinary circumstances’

The Regulation provides for an exception from airline liability towards passengers in case of ‘extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken’ (Article 5(3)). The preamble to the Regulation additionally explains that such ‘extraordinary circumstances’ include in particular political instability, meteorological conditions, security risks, unexpected flight safety short–comings, as well as strikes (recital 14).

Scope of application in non-EU flights and discrepancy between language versions

In the case of flights departing from outside the EU, to a destination within the Union, the Regulation applies only if two conditions are jointly met: (1) the airline is an EU carrier and (2) the passengers had not received compensation in the third country (Article 3(1)(b)). However, the French, Romanian and Spanish versions of the Regulation do not mention that the passenger actually ‘received’ the compensation in the third country, but exclude the application of the Regulation also if the passenger is merely ‘entitled’ to compensation in a third country (bénéficent de…, disfruten de, beneficiat de…).

Claims on third parties

The Regulation does not limit in any way the possibility for airlines which have paid out compensation to passengers, to seek damages from third parties under the generally applicable rules (Article 13).

Facts of the case

Ms Corina van der Lans bought a ticket for a KLM flight from Quito (Ecuador) to Amsterdam. However, due to an engine failure the aircraft could not take off on time. Replacement parts had to be flown in from Amsterdam, and as a result the flight was delayed by a total of 30 hours and 15 minutes. Van der Lans took KLM to court demanding €600 of compensation for the delay under the Regulation.

Arguments of the parties and the legal question

The position of KLM

KLM argued that it does not have to pay compensation to Van der Lans because the delay was caused by ‘extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken’, as provided for in Article 5(3) of the Regulation. The air carrier pointed out that the defective parts of the engine had not exceeded their average lifetime and their manufacturer had not warned KLM about the possibility of defects. Furthermore, KLM pointed out that it did not detect the problem during a routine maintenance check a month before the cancelled flight.

Van der Lans’ position

According to Van der Lans, KLM cannot rely on the ‘extraordinary circumstance’ exception provided for by Article 5(3) of the Regulation because airlines cannot invoke technical problems as an exception from their liability towards passengers, as the Court ruled in the Wallentin-Hermann v Alitalia case (2008).

Opinion of the French government

The French government, one of the interveners in the proceedings, expressed the view that the Airline Passenger Compensation Regulation 2004 is not applicable to the case because Van der Lans can seek compensation from KLM under Ecuadorian law.

The legal question

In order to decide the dispute, the national court had to interpret the Regulation, and in particular receive guidance as to the meaning of ‘extraordinary circumstances’ in the context of an unexpected technical problem. Therefore, it submitted a preliminary reference to the CJEU (Case C-257/14 Van der Lans v KLM).

Reasoning of the Court of Justice

Linguistic discrepancy and applicability of the Regulation

At the outset, the CJEU had to determine whether the Regulation is applicable to Van der Lans’ case. Provided that she is entitled to compensation under Ecuadorian law, she would not be able to invoke the Regulation according to its French text, but under the English text she would have to actually receive such compensation (which was not the case). Referring to its earlier case law, the Court pointed out that in the case of linguistic discrepancy, a provision of EU law must be interpreted in light of its context and purpose.

The Court pointed out that the purpose of the Regulation is to guarantee a high level of protection for passengers. Therefore, the exception from the applicability of the Regulation should be read narrowly. For the Regulation not to apply, it would have to be proven that the passenger actually received compensation under the law of a third country and that such compensation is equivalent to that provided for by EU law.

Do unforeseen technical problems count as ‘extraordinary circumstances’?

The Court first of all pointed out that an exception to air carrier liability must be interpreted strictly. Referring to the judgment in the Wallentin-Hermann v Alitalia case, the judges argued that technical problems are an inherent element of the functioning of aircraft, and that air carriers have to deal with them on a regular basis. ‘Extraordinary circumstances’ are events like those listed in the preamble to the Regulation, such as political instability, meteorological conditions, security risks, unexpected flight safety shortcomings, as well as strikes. It is essential that such events are not inherent in the normal activity of air carriers and that they are beyond the actual control of the carrier due to its nature or origin.

For a technical problem to count as ‘extraordinary circumstances’, it would have to be a hidden manufacturing defect, revealed by the manufacturer or a competent authority. Likewise, damage done to the aircraft as an act of sabotage or terrorism would also be an ‘extraordinary circumstance’.

Referring to the technical problems encountered by KLM in the case at hand, the Court pointed out that it was caused by the premature malfunction of certain components of the aircraft, and as such it was unexpected. However, the Court observed that ‘no component of an aircraft lasts forever’ and premature breakdowns are ‘intrinsically linked’ to the operation of aircraft. Airlines are confronted with such unexpected problems ‘as a matter of course’. Furthermore, the Court observed that the technical problem at issue was not beyond the control of the carrier.

Court’s ruling

In conclusion, the Court ruled that an unexpected technical problem, which is not attributable to poor maintenance and which was not detected during routine maintenance checks does not qualify as ‘extraordinary circumstances’. Therefore, the airline remains liable towards passengers and must pay them compensation. However, this does not exclude the airline claiming damages from the manufacturer, thereby shifting the financial burden of the compensation. The CJEU’s ruling is certainly favourable to consumers and will make it more difficult for air carriers to escape liability for delayed or cancelled flights.

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