“The consumer’s right to compensation under the Regulation cannot depend on when and where the member of staff ate the suspect prawn sandwich” – Coulson LJ, Lipton v BA City Flyer Ltd  EWCA Civ 454.
The Court of Appeal has handed down judgment on a cancellation claim and the post-Brexit status of EU Regulation 261/2004 in Lipton v BA City Flyer Ltd. This judgment has opened the gates for further flight delay claims after ruling that cancellation due to a pilot’s illness before take-off was not a reason to refuse compensation.
Flight delay litigation is major in the industry, particularly in light of COVID-19. Airlines can avoid making payments under EU Regulation 261/2004 by demonstrating that the cancellation was caused by extraordinary circumstances under Article 5(3) of the Regulation. In this case, the non-attendance of the pilot due to sickness was held to be an inherent part of the air carrier’s operations, and not an “extraordinary circumstance” within the meaning of Article 5(3). Further, the Regulation formed part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018.
The pilot of a flight from Milan to London fell ill shortly before he was due to report for duty, leading to the cancellation of the flight. The passengers were transferred to another flight and arrived in London 2.5 hours after their scheduled arrival time.
The airline argued that as the pilot fell ill while off-duty, his non-attendance was an extraordinary circumstance, an argument with which the lower courts agreed. On appeal, the passengers submitted that the pilot’s non-attendance was not an extraordinary circumstance because making provision for staff non-attendance, regardless of when staff members fell ill, was an inherent part of the airline’s operations.
In order to be an "extraordinary circumstance", the event in question could not be inherent to the normal exercise of the air carrier's activities, and it had to be something that was beyond the air carrier's control. The Regulation aims to provide a high level of protection for consumers and, as a derogation from that protection, Article 5(3) should be strictly interpreted. The term "extraordinary circumstance" required something out of the ordinary, and the need to accommodate staff illness was not out of the ordinary. The non-attendance of an aircraft captain due to illness was an inherent part of an air carrier's activity and operations. This was the case regardless of whether they fell ill before reporting for work or while at work.
This interpretation was consistent with EU caselaw on the application of Article 5(3) to cases where flights were cancelled or delayed due to strike action of airline staff, where strike action was held to be inherent in the running of an airline and within its control. EU authorities which held that various events were extraordinary circumstances concerned rare or infrequent events and were very different from the circumstances of this appeal.
Post-Brexit status of EU Regulation
The Regulation had been adopted before Brexit and was therefore part of UK domestic law, and the court had jurisdiction to determine the appeal.
The Regulation became retained legislation under the European Union (Withdrawal) Act 2018, taking effect under UK law as amended by the Air Passenger Rights and Air Travel Organisers' Licensing (Amendment) (EU Exit) Regulations 201. The Regulation had to be given a purposive construction, taking into account its recital and other principles, and its effect was to be determined by reference to case law of the European Court of Justice made before the end of the Brexit transitional period on 31st December 2020. Although general principles of EU case law were relevant to the interpretation of the regulation, the court was not bound by such principles and could depart from them if it considered it right to do so.
The likely consequences of this judgment will be that more claims are payable and, according to the claimant’s solicitors, airlines will now have to reopen thousands of cases where they had previously rejected compensation. This will also lead to further contingency planning being required by airlines, such as maintaining relief staff at airports, as staff illness is now officially deemed to be an inherent part of their operation and could leave them open to compensation claims by passengers.
Further reading: Lipton v BA City Flyer Ltd  EWCA Civ 454