IFTTA Europe Rostock, Germany

April 2012

Marc McDonald

(formerly of Dublin Institute of Technology)

Reflections on the Opinion of AG Bot in McDonagh v Ryanair

ECJ, C12/11 How long will it take for the ECJ to

speak out clearly on the legal nature of the care obligation?

Facts

• McDonagh's Ryanair flight to Dublin from Faro cancelled due to volcanic ash cloud in April 2010

• Stranded in Faro for 7 days

• Under 261/2004, McDonagh claimed costs of accommodation, meals, etc from Ryanair who refused to pay

Questions Referred

• Does ashcloud-induced airspace closure 'go beyond “extraordinary circumstances” ' in 261/2004?

• If yes, is care liability excluded? If not excluded, do Article 5/9 infringe ... and ..(wait for it) 'equitable balance' from Montreal Convention 1999?

Questions ...

• Do Art. 5 and 9 contain implied time and money limits on care obligation?

• If not, do they infringe ... ?

• Questions reflect common law view that courts can imply terms into written rules

• And (although not mentioned) that 'public policy ' is a principle available to courts to avoid 'absurd' consequences

Beyond Extraordinary Circumstances (ExC)

• Odd question provoking unnecessary analysis of ExC by AG Bot which ECJ should ignore

• No analysis needed because Art 5 could not be clearer is saying ExC defence does not apply to the care obligation

• Proportionality/non-discrimination arguments were legless when judged from a consumer perspective

Implied Time/Money Limits on the Care Obligation?

• Ryanair argued care obligation is limited to €80 per night for 3 nights ...

• Of course, 261/2004 contains no such limits

• But Ryanair might take some comfort from Commission suggestion (disagreed with by AG Bot) of factors airlines can take into account in deciding how to offer care

• Highlights lack of care specifics in 261/2004 to guide national courts

BUT ...

• Ryanair was not alone in thinking 261/2004 was not really intended to apply to the closure of airspace over half a continent for an unknown duration

• Imagine an even worse scenario where air traffic is grounded for months/years ... could courts/Commission reasonably say airlines must continue to apply 261/2004?

BUT ...

• Theoretically ... yes

• But, realistically, only with relief measures contained in other EU measures

• say, – suspending the obligations for defined period– authorising state aid for airlines

Equitable Balance ...

• Ryanair tried to use Montreal preamble to support its arguments

• Attempt based on a misconception of relationship between 261/2004 and Montreal

• Because, if McDonagh didn't base claim, at least partly, on Montreal, its preamble is irrelevant to a 261/2004 claim

• They deal with different issues

261/2004 and Montreal

• Since IATA (C-344/04, para 43-48 and Wallentin C-549/07 para 32) it is clear air passenger claims for standardised compensation for non-compliance with 261/2004 are not preempted by Montreal

• What remained unclear was whether breach of the care obligation was actionable under 261/2004 or Art. 19 of Montreal or some combination of both ?

261/2004 and Montreal

Question is important because:

• Lawyers need to plead the correct legal basis for their claims

• Defence of reasonable measure and compensation cap apply under Art 19 of Montreal

• Possibly different limitation periods

Rodriguez

• Recently ECJ had another opportunity to address this question in Rodriguez (C-83/10)

• Passengers were not offered care by airline when flight was cancelled

• They claimed compensation for expenses including meals, taxis, dog kennel fees etc

• Two questions referred

Rodriguez

• Only second question relevant to present discussion

• ECJ was asked how the phrase 'further compensation' in Art.12 should be interpreted

• Question poorly phrased ... Art 12 is only...

• ECJ should have rephrased question to ask:

Rodriguez

Should Arts. 5/8/9/12 of 261/2004 be interpreted as meaning that claims for compensation for breach of the care obligation must be legally based either fully on Montreal or fully on 261/2004 or partly on both and, if so, how? (Plus consequential questions)

Rodriguez• Some ECJ passages seem clear, others do not and the overall position is still unclear

• Para 42 – ECJ seems to say airline cannot be forced under Arts 8/9 of 261/2004 to pay compensation for failure to provide care

• Para 44 – ECJ says when airline fails to honour its Arts. 8/9 obligation ''air passengers are justified in claiming a right to compensation on the basis of the factors set out in those articles.'

Rodriguez

• It might just be possible to reconcile these views, but only by drawing inferences and possessing some knowledge of Montreal

• That is a long way from providing the clear and unambiguous statement needed by airlines and passengers about how breach of care claims are to be dealt with

261/2004 and Montreal

Legal position might therefore be that when seeking compensation for breach of care obligation in Article 9 (meals, hotel, hotel/airport transfers, communications), passengers must base their legal claim on a breach of Article 9 of 261/2004

261/2004 and Montreal

They should also plead under Montreal because the claim will (under Art 29 of Montreal) be subject to the conditions and limits of Montreal – which means subject ...

All other expenses (dog kennel fees) must be claimed under Montreal only

261/2004 and Montreal

• It remains the case under Art. 16 of 261/2004 that the enforcer must consider seeking sanctions against airlines who fail to honour the care obligation

• Perhaps much of the practical difficulty with the care obligation could be dealt with by much more robust and immediate action by enforcers

261/2004 and Montreal

• The implications of this for ash cloud victims is that there is no automatic entitlement to compensation for hotel/meal expenses

• Where an airline raises the reasonable measures defence, a court will have to undertake a case-by-case analysis to see if compensation is payable

261/2004 and Montreal

• This may seem to undermine the policy of 261/2004

• If a court wanted to avoid this by basing a breach of care obligation compensation award solely on 261/2004 it would face a serious legal difficulty

• 261/2004 cannot provide a civil remedy for breach of Article 9, nor can such a right be inferred

261/2004 and Montreal

This is because such compensation would be non-immediate and also non-standarised and these are the two key points of distinction relied on by the ECJ in IATA to place 261/2004 beyond the preemptive reach of Montreal

261/2004 and Montreal For 261/2004 to remain beyond Montreal

all elements of a claim must be standardised – the legal duty, its breach, the damage and the amount of compensation

When care is not provided care compensation is neither uniform or pre-determined ... unlike overbooking/cancellation amounts

261/2004 and Montreal

None of this is satisfactory for ...

• Cause of the problem with 261/2004 is the use of the language of civil remedies without paying enough attention to the preemptive reach of Montreal

• But, from a policy point of view 261/2004 remains good policy

• There are perhaps three ways of providing a sound legal basis for the care obligation:

How to overcome the difficulty?

Chanel all legal activity for breach of the care obligation through the enforcer

Amend 261/2004 to create standard compensation amounts for breach of the care obligation ... see Ryanair suggestion in McDonagh

Go back to Montreal and enter a caveat/reservation so that no defence/cap applies to breach of care obligation

Conclusion

• ECJ should ignore AG Bot's analysis in McDonagh of the ExC defence because it was unnecesary

• ECJ should agree with AG Bot that there are no express limits on the care obligation and that national courts must decide what is proportionate compliance

Conclusion

Although it is unlikely to do so, ECJ should take the opportunity in McDonagh to finally and unambiguously clarify:

• The precise legal basis for compensation claims for breach of the care obligation

• Whether the Montreal defence of reasonable measures/cap apply

• What limitation period applies to such claim

THANK YOU

marcglenarm@gmail.com