Global menu

Our global pages

Close

Airlines Face Turbulence Over Compensation Payments Following Supreme Court Decision

  • Global
  • Transport

03-04-2018

Intro / Summary

The Supreme Court has refused to grant Emirates permission to appeal the Court of Appeal’s decision in the joint case of Gahan v Emirates and Buckley and ors v Emirates meaning the Court of Appeal’s decision to award compensation to passengers who were delayed as a result of missed connections outside the EU stands.

This is a significant decision with important implications for both airlines and consumers.

The Law / Background

In sturgeon v Condor Flugdienst GmbH, the European Court of Justice interpreted Regulation (EC) No 261/2004 (“Regulation 261”) as entitling passengers to compensation where they suffered delays of three hours or more. The case further established that where flights are operated by “non-community operators” (operators whose licence is issued outside of the EU), Regulation 261 and the right to compensation only applies to passengers on flights departing from an EU airport.

The carrier in this case, Emirates, is a “non-community operator” with its licence issued in Dubai.

Case 1

In the first of the two cases that formed the conjoined appeal, Gahan v Emirates, a passenger had flown from Manchester to Bangkok via Dubai. The passenger had arrived more than three hours late in Dubai and as a result missed her connecting flight, meaning she arrived at her final destination, Bangkok, 13.5 hours late. Emirates denied paying her compensation for the full 13.5 hours delay, arguing that the flight from Dubai to Bangkok did not fall within Regulation 261 as it had not departed from an EU airport. Instead, Emirates only compensated her for the delay suffered to her first flight from Manchester to Dubai.

The Court at first instance agreed with Emirates and held that the two legs of the journey had to be viewed separately and that only the flight from Manchester to Dubai was within the scope of Regulation 261.

The passenger appealed to the Court of Appeal.

Case 2

The second case, Buckley and others v Emirates, concerned three passengers flying from Manchester to Sydney via Dubai. The flight to Dubai was delayed by less than three hours but the delay nevertheless still resulted in the passengers missing their connecting flight causing them to arrive in Sydney 16.5 hours later than scheduled. Emirates argued that the passengers were not entitled to any compensation as the flight from Manchester to Dubai was the only flight to fall within the scope of Regulation 261 and that flight was not delayed by three hours or more.

In contradiction to the first case, the Court disagreed with Emirates’ argument finding that both the connecting flights were within the scope of Regulation 261 and thus the delay amounted to more than three hours, meaning compensation was payable.

Emirates appealed to the Court of Appeal.

Court of Appeal Decision

The Court of Appeal in hearing the conjoined appeal had to consider whether connecting flights should be taken into account when calculating the delay to a flight for which compensation was sought under Regulation 261. It held that it was incorrect to view the two legs of the flights separately and agreeing with the approach of the Court in the second case, determined that connecting flights starting or ending outside of the EU could be taken into account for the purpose of calculating whether there had been a delay of three hours or more. The Court of Appeal stated that when considering a passenger’s right to compensation, the significant point to consider is the delay suffered by a passenger in arriving at their final destination.

The Court of Appeal also clarified that Regulation 261 applied to non-community carriers where the flight departed from an EU airport, irrespective of its destination, even if its destination was a non-EU state.

Emirates applied to the Supreme Court for permission to Appeal the decision of the Court of Appeal.

Supreme Court Decision

The Supreme Court rejected Emirates application to appeal the decision, stating that Emirates' appeal did not raise an arguable point of law because the European Court of Justice had already given a clear answer.

Comment

The Court's decision confirms the Civil Aviation Authority’s interpretation of Regulation 261 who commenced enforcement action against five airlines in 2017 (including Emirates) for failing to compensate passengers that had suffered delays as a result of missed connections outside the EU.  Four of the airlines responded and began complying with that interpretation, however Emirates continued to defend its position. Emirates will now have to join the other airlines in making changes to its approach.

The decision of the Supreme Court to refuse Emirates permission to appeal, affirms the decision of the Court of Appeal and opens the door for passengers that suffered a flight delay or cancellation resulting from a missed connection outside of the EU to claim compensation.

For more information contact

< Go back

Print Friendly and PDF
Subscribe to e-briefings