by Joanna Kolatsis, partner at Hill Dickinson LLP
The ink has yet to dry on the Court of Appeal judgment handed down on June 11 in the case of Huzar v Jet2 and the aviation industry faces yet another damaging decision.
Thomson Airways took its case to the Court of Appeal following a loss in the Cambridge County Court against Mr Dawson who was fighting for the right to bring a claim for compensation under EC Regulation 261/2004 following a six-hour delay on a flight to the Dominican Republic.
The issue in this case was not whether Dawson was entitled to compensation per se, as Thomson agreed that under normal circumstances this would have been paid, but rather whether Dawson was time barred from bringing his claim.
The limitation period for bringing civil claims in England and Wales is usually six years (with limited exceptions). Dawson issued his claim against Thomson just before the six-year period was about to expire.
Thomson challenged the claim on the basis that Dawson was time barred from bringing his claim in accordance with the Montreal Convention 1999 which governs the liability of carriers by air. Montreal provides for a two-year limitation period.
In a decision that is undoubtedly a blow to Thomson, the Court of Appeal decided the six-year limitation period should apply to Dawson’s claim in accordance with domestic law in England and Wales.
Thomson has since announced its decision to take the case to the Supreme Court.
This is not the first time the question of limitation has arisen in relation to claims under Regulation 261.
It is important to airlines, which have for some time championed the exclusivity of the Montreal Convention when dealing with claims arising out of air travel and the two-year limitation that applies.
When Regulation 261 came into force its purpose was to establish common rules within the EU in respect of airlines providing compensation and assistance to passengers who had suffered a cancellation, delay or denied boarding.
However, the regulation did not provide for compensation in respect of delays.
European case law over the last few years has changed the effect of the regulation and the criteria for compensation payments and has had a significant impact on the way airlines have to deal with such claims.
Several cases paved the way to the current decision:
Sidhu v British Airways (1997) – this House of Lords decision confirmed the Montreal Convention as an exclusive regime in respect of claims arising out of carriage by air. This judgment has been followed in many cases, not only in England and Wales but internationally.
R (IATA) v Department for Transport (2006) – the airline industry challenged the validity of Regulation 261 in respect of claims for delay, reimbursement and assistance on the grounds that this was at odds with the Montreal Convention.
The Court of Justice of the European Union (CJEU) disagreed and held that Montreal provided for individual remedies for passengers whereas Regulation 261 provided remedies common to all passengers affected by a delay.
Sturgeon v Condor (2012) – this led to compensation being payable for flight delays in excess of three hours or more (unless extraordinary circumstances can be cited as a defence).
Nelson v Deutsche Lufthansa (2013) – held that loss of time as a result of a flight delay, in accordance with Regulation 261, was not the same as damage caused by delay under the Montreal Convention. The CJEU held that Regulation 261 was therefore compatible with Montreal.
Cuadrench Moré v KLM (2013) – the court held that the time limit for issuing a claim in accordance with Regulation 261 was subject to the national law of the country in question.
In the case of Moré, Spanish law provided for a 10-year limitation period versus the two-year limitation under the Montreal Convention.
This brings us to the scenario in Dawson. During the County Court hearing, Thomson accepted the decision in Moré meant that national law dictated the applicable limitation period.
However, it contended that English law pointed towards the Convention in terms of limitation i.e. that claims should be brought within two years not six. The court rejected Thomson’s arguments.
At the Court of Appeal, Thomson repeated its submissions and maintained that English Law recognises Montreal as an exclusive jurisdiction for carriage-by-air claims in accordance with Sidhu.
Thomson’s counsel argued that any claim for compensation under Regulation 261 was, in reality, a claim for loss and damage under the Montreal Convention.
Therefore, under English law a valid claim should fall within the scope of Montreal and be subject to a two-year limitation.
Thomson also promoted the view that there is an “irreconcilable conflict” between English law and the CJEU decisions and while the English courts were bound to accept the decisions in Sturgeon and Nelson, they were not bound to accept that a claim for compensation under Regulation 261 fell outside the scope of Montreal.
Counsel for Dawson relied on the Iata case, so it followed that the European Court could determine the meaning and effect of Regulation 261, the meaning of Montreal and the relationship between the two.
The Court of Appeal agreed that Montreal was, indeed, an exclusive authority but only in respect of claims falling within its scope.
It cited the case of Stott v Thomas Cook (2014) as a case where Montreal did not permit a claim.
In Stott, a passenger with reduced mobility brought a claim for damages as a result of injury to feelings. Such claims are precluded under Montreal and the UK Supreme Court found in favour of Thomas Cook, agreeing that such claims could not be raised under the Montreal Convention.
In Dawson, the Court of Appeal used the Stott ruling to argue European Law should apply. The court did not agree that Dawson’s claim fell within the scope of Montreal. Therefore, it was not governed by the exclusivity of Montreal or the two-year limitation.
Tomorrow on Business:am Joanna Kolatsis will analyse the consequences of the latest judgment.