The European Court of Justice judgment – Case McDonagh v Ryanair of 31 January 2013

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EU Regulation 216/04  sets out a number of rights that passengers enjoy in case they are confronted with disruptions in their air travel plans. This Regulation is doubtlessly the best known of the EU laws by European passengers. To a great extent thanks to the information campaign deployed by the European Commission in airports and elsewhere, most passengers know of its existence, although they might not always grasp its hidden intricacies. Generally, the Regulation establishes the rights of passengers to financial compensation and assistance (care) in the events of denied boarding, cancellations and long delays of flights.

Despite its popularity, since its early stages of practical application (or rather non application) it generated a great deal of disputes and controversy as well as fear opposition from the side of the air industry. As a result, many cases were brought before the national courts and before the European Court of Justice.

Right after its adoption in 2004, the airline industry already questioned, without success, the legality and validity of the Regulation. In virtually all of the subsequent court cases, the ECJ supports an interpretation of the Regulation favorable to the protection of the interests of passengers. This is also valid for the case that is commented here.

This article aims to analyze the recent ruling of the European Court of Justice as regards the duty of air companies to provide assistance and care to passengers when they are confronted with a cancellation or a delay of their flights, following the advent of an “extraordinary circumstance” (articles 5 and 9 of the Regulation). The case at hand was brought before the Irish courts by an Irish citizen (Ms. McDonagh) affected by a cancellation of her flight during the volcanic eruption, that occurred in Iceland in March 2010 and which ultimately led to the closure of the air space in many countries for a number of days.


“Extraordinary circumstances”

Under the Regulation at hand, passengers whose flights are cancelled following an “extraordinary circumstance”, do not have the right to be given any financial compensation (contrary to when the cancellation -or delay – results from other circumstances, not “extraordinary”), but are in contrast clearly entitled to receive care and assistance (meals, refreshments and hotel accommodation when needed) no matter what the cause for the cancellation or delay was. Further, the Regulation does not include any limit be it temporal or monetary to the duty to provide assistance and care; those have to be provided up until an alternative flight is found for the passenger.

The concept of “extraordinary circumstances” is not defined in the Regulation although the term reminds a great deal of the concept of “force majeure”. Also, article 5.3 of the Regulation offers a helpful indication of its meaning, by stating that companies can invoke extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, namely circumstances which are beyond the air carriers’ actual control. Finally, Recital 14 in the preamble of the Regulation offers a non-exhaustive list of circumstances that could be considered extraordinary. Recital 14 mentions political instability, meteorological conditions, security risks, unexpected flight safety shortcomings and strikes that affect the operation of an operating carrier.

Understandably, a volcanic eruption producing an ash cloud event was not foreseen at the time, by the legislator. Notwithstanding, by confining to a non-exhaustive list of circumstances, the legislator acknowledged the limitations of law making in relation to the exemption of “extraordinary circumstances”. Indeed, many different situations could arise that cannot be predicted but that could perfectly qualify as extraordinary. In the Wallentin ruling the Court already acknowledge that  the legislator did not mean that in all the cases mentioned in recital 14, “extraordinary circumstances” can be argued for (to exempt the company from paying compensation), neither did it mean, that other reasons (but those mentioned in recital 14) cannot lead to “extraordinary circumstances”. The ash cloud can easily be put into a category of unpredictable events, at least the first time it happened.

On the same occasion, the Court limits the extent to which some circumstances mentioned in recital 14 can be invoked as extraordinary, in relation to security risks. In particular the Court ruled that technical problems do not constitute “extraordinary circumstances” if they stem from events related to the normal exercise of the activity of an air carrier (e.g. maintenance obligations).

In the case at hand, Ms McDonagh, considering that the ash cloud qualified as an extraordinary circumstance, complained before the national court that the company (Ryanair) did not provide her with the due care during the time he had to wait (a total of 8 days, from 17 to 24 April) to be placed in an alternative flight. During this waiting period Mrs McDonagh had to cover her expenses amounting to EUR 1.129,41 including food, drinks, accommodation and transport. As a result, Ms McDonagh brought an action before the national court against Ryanair to recover those expenses.

Analysis of the ECJ answers

The first question asked by the national court to the ECJ was whether the advent of an ash could as that produced by the Eyjafjallajökull volcano in Iceland, should be considered an “extraordinary circumstance” under the Regulation, thus entitling passengers to be provided with food, drinks and accommodation until they were placed in another flight to reach their destination.

Ryanair argued, before the national court, that the advent of the ash cloud does not constitute an “extraordinary circumstance” but rather a “super extraordinary circumstance” which is not covered by the Regulation, and that as a consequence the company should be released from the obligation to provide care or assistance. The Court however argues that the concept of “extraordinary circumstances” is not related to the gravity or the nature of a particular event but refers to all circumstances that are beyond the actual control of the air carrier, whatever the nature of those circumstances or their gravity.

In sum, the Court concluded that the ash cloud caused by the volcanic eruption is an “extraordinary circumstance” in the sense of article 5.3 of the Regulation and that as a consequence the duty to provide care and assistance should be fully respected by the airlines.

By its fourth and fifth questions, the national court asks the ECJ whether the obligation to provide care and assistance is limited in temporal or in monetary terms and, if not, whether those obligations should be considered invalid in the light of the principles of proportionality and non-discrimination and the principles of equitable balance of interests (referred to in the Montreal Convention).  Another Ryanair’s claim was that the Regulation is contrary to articles 16 and 17 of the Charter of fundamental rights of the European Union.

As regards the temporal and monetary limits, the Court easily finds that the text of the Regulation does not put any limit to the obligation to provide care neither monetary nor temporal. It says that article 9.1 (b) imposes this obligation on the carrier as long as it is ”necessary”, thus until the passenger can be rerouted to reach his/her final destination. The Court went on saying that any interpretation of the Regulation as seeking the introduction of limits, whether temporal or monetary, beyond which the passengers would be left to themselves, would jeopardize the aim of the Regulation, namely to achieve a high level of protection for passengers.

Regarding the observance of the principle of proportionality by the Regulation, Ryanair argued before the national court that the obligation to provide care and assistance entails undoubted financial consequences for air carriers and that this obligation is thus disproportionate. However, the Court, supporting the Advocate General Opinion, considers that any air carrier has to foresee the costs linked to the fulfillment of their legal obligations. It then concludes that the obligation to provide care and assistance cannot be considered disproportionate to the aim of ensuring a high level of protection for passengers. What is more, according to the Court, the importance of the objective of consumer protection may justify even substantial negative economic consequences on the airline.

However, at this point the Court introduces ruled that the passenger may only obtain the reimbursement of amounts which are necessary, appropriate and reasonable to make up for the shortcomings of the airline in the provision of care.

Turning to the issue of the compliance with the principles of non-discrimination and equal treatment, Ryanair claimed that in circumstances similar to those in the case at hand, the Regulation imposes obligations on air carriers that do not fall upon other modes of transport such as in rail, maritime and coach transport, enshrined in the corresponding EU regulations.  In the view of Ryanair such difference in the establishment of rights and obligations of the parties, is not justified and violates the principle of non-discrimination between different transport operators.

Yet, the Court finds that different modes of transport are not always comparable as regards the rights and obligations of the contractual parties. In particular, the Court states that the conditions governing the accessibility and the distribution of the network undertakings, operating different modes of transport, are not always interchangeable as regards the conditions of their use. The same conclusion was reached by the Court in the first case submitted to the Court on the Regulation (point 96 of the IATA and ELFAA case).

Consequently, the Court ruled that Regulation 261/04 does not infringe the principle of non-discrimination, in line with Beuc's view.

The fifth and last question of the national court, relates to the alleged illegality of the obligation to provide assistance in relation to the Charter of fundamental rights of the European Union (The Charter). Ryanair argued that the obligation to provide assistance to passengers in extraordinary circumstances, is contrary to the right to property and to the freedom to conduct a business (articles 16 and 17 of The Charter) and that it has the effect of depriving air carriers of part of the fruits of their labour and of their investments.

The Court once again dismissed the claim of Ryanair by arguing that the rights to property and to the freedom to conduct a business, are not absolute rights and that the Charter accepts limitations to those rights as they might have to be reconciled with other equally important rights.  The Court reminds that in these cases there is a need to strike a fair balance between the different rights at stake. The Court mentions in particular article 38 of the Charter as well as article169 of the Treaty on the functioning of the European Union, which seek to ensure a high level of protection for consumers, including air passengers.

Thus, the Court rules that the Regulation does not infringe articles 16 and 17 of The Charter.

What will the future bring?

As said earlier, since the adoption of Regulation 261/04, the Court has always held that passengers deserve a high level of protection. This can and is certainly applauded by European passengers and consumer organizations alike around Europe and beyond. So far, also the European Commission has supported the interpretation of the European Court of Justice in the different cases even argued that those judgments are directly applicable and thus obligatory for the air industry.

But what the future will bring is another matter. In the aftermath of the revision of Regulation 261/04, the air industry may succeed in undermining the strong “messages” of the European Court of Justice in relation to the rights of air passengers when interpreting the Regulation. The impact of the current economic crisis and the strong lobbying of the airline industry compared to consumers and passengers’ groups, might impact on the choices to be made by the legislator when revising the Regulation. In the meantime, let us hope the best for European air passengers.

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BEUC (Bureau Européen des Unions de Consommateurs)

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