Defeat conceded in airlines’ bid for ash compensation

Lawyers have so far failed to win airline compensation from the government as a result of last year’s ash cloud as the latest crisis threatens further heavy losses for the industry.

Speaking at an Abta travel law seminar, Sean Gates, senior partner of Gates and Partners Solicitors, warned of a repeat of last year’s “comedy of massive errors” when airlines paid out millions in compensation to stranded passengers under European Commission regulation 261/2004.

Gates said: “My function was to help airlines in the UK to work out ways to recover massive amounts of money they had to spend because of the EC regulations 261. We had to investigate and decide whether we could sue one or more organisations; we got somewhere but not all the way.”

Gates told the seminar that the UK did not have a disaster response plan to deal with the ash cloud last year and decided on a blanket air space ban. “The Civil Aviation Authority went into ‘purple funk’ and decided they couldn’t open up airspace. After six or seven days things began to return to normal at a cost of several billion pounds to the industry,” he added.

Despite a partial apology from UK authorities for a lack of a disaster plan, Gates said his company’s attempts to recoup airlines’ money were fruitless under UK law.

He said: “We looked at whether we could sue anyone because our clients had suffered losses. Under UK law you cannot recover money from the CAA because they represent the UK taxpayer.”

European laws are less restrictive, however, and foreign authorities could be pursued for negligence, he claimed. “If you can prove negligence, you could recover the pure economic losses so there are ways some compensation can be had.”

The comments came as Gates warned of further airline collapses as a result of the current crisis. “Airlines are first in the line of attack. They have to acccommdate passengers who are delayed or reroute them. The new volcano will cause problems; it may well drive some airlines out of business.”

He urged the industry to consider lobbying for change. “We need to attack this somehow; the lobbying needs to be ferocious,” he said.