Consumer protection at a cost

Sometimes the law develops because someone cares enough to make a complaint and take it all the way to the highest court. That, of course, does not mean that the apparent benefits derived from that evolution are positive – and consumer protection can come at a cost.

In the case of the decision of the Court of Appeal involving Jet2 and the affected passenger, a Mr Huzar, that cost could be price rises for all passengers as airlines process claims related to previous delays and introduce added controls.

Background

The facts of this case were not subject to dispute. Mr Huzar and his family suffered a delay of 27 hours in their flight from Malaga to Manchester. The disruption was caused by a wiring defect. Importantly, the technical fault was unexpected and could not have been predicted by a regular system of inspection or maintenance and, further, that the wire which failed or was defective was within its expected lifespan.

The actual discussion was about the interpretation of the European Regulation (EC) No 261/2004 which deals with delays and cancellations. This legislative instrument, fairly generous in its provisions, had been stretched beyond its literal meaning by the European Court of Justice before. Although the actual regulation only contemplates compensation in the event of cancellation of flights, in previous decisions the right to compensation has been awarded to those affected by delayed flights. The reasoning of the ECJ was that when a flight is delayed more than three hours, compensation should also be awarded. That decision was justified as an interpretation with the overall principle of the law, but some national courts have rejected it.

As a consequence, the established test was that for a carrier to avoid compensation in the event of delay it would have to prove that there were exceptional circumstances and that the carrier must have been unable to avoid the cancellation even by taking all reasonable measures.

The legal issue

The question to resolve by the Court of Appeal was whether, in the facts of the case there was an exceptional circumstance beyond the control of the air carrier. So is defective wiring which could not have been detected in a routine check one of those situations, taking into account that exceptional circumstances also include ’unexpected flight safety shortcomings’?

Both parties had obvious disagreements about this interpretation and the Court of Appeal adopted a principle which seems to take the meaning of the regulation even further. This decision states that a technical failure is part and parcel of the everyday activity of an airline and therefore within the control of the company. Unexpected flight safety shortcomings, therefore, should be understood as external factors.

The court reasoning has a significant public policy component, namely, if the passengers were required to argue that the specific fault which caused their delay was normal and not exceptional, then the actual right for compensation would be frustrated. A company would be able to reject claims by merely saying ’routine control didn’t report any incidents’.

All considered it seems to be one of those cases where the judge has done justice, in spite of the legislation and not because of it.

Consequences

The fact that airfares will probably increase is not an absolute negative, particularly when set against the fact that companies will also increase their checks to make them more thorough.

More importantly, however, is the fact that the court was resolving on a principle of equity but based on a liberal interpretation of a judgement which in turn stretched the meaning of a European regulation. While protection of consumer is laudable, where is the legitimate legal expectation?

Alfonso Valero, senior Lecturer at Nottingham Law School