The recent Advocate General’s opinion suggests this Regulation may be here to stay. There are still unanswered questions of interpretation in this Regulation, one of the main sources of uncertainty being when the "extraordinary circumstances" defence can be relied on by carriers. Examples of where this defence has been considered over the last few months include cancellations due to strike action, including those forced on British Airways at Heathrow in August. It is difficult to think of a more obvious example of what the extraordinary circumstances defence ought to cover than the BA flight cancellations caused by sudden, secondary and possibly illegal strike action.
When EC Regulation 261/2004 finally came into force on 17 February 2005 airlines pretty quickly faced demands from passengers keen to take advantage of their new rights.
Whilst airlines’ experience of the Regulation in operation seems to have varied, all will agree that passenger expectations have been raised. Sooner or later some of the grey areas in the Regulation which have attracted so much criticism will be tested in the courts. However, for the time being there are probably still as many questions as answers on how some parts of the Regulation are to be interpreted.
Carriers do not have to pay compensation under the Regulation for flight cancellations if they can prove that the cancellation is due to "extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken"."Extraordinary circumstances" are not defined and only limited (and non-binding) guidance as to what it means is provided in the preamble to the Regulation. Before the Regulation came into force, this term was a source of intense debate and uncertainty. That uncertainty has continued now that the Regulation is law. Questions remain as to the applicability of the defence to cancellations resulting from matters such as strike action, technical problems, or unavailability of technical crew.
Cancellations due to industrial action have recently been in the news following August’s secondary action at Heathrow in support of employees of the catering company, Gate Gourmet, which brought British Airways’ services at the airport to a standstill for over 24 hours and caused wholesale cancellation of flights.
British Airways moved swiftly and pragmatically to meet its obligations under the Regulation by re-routing passengers on different airlines and providing refunds, hotel accommodation and refreshments. Were the passengers entitled, in addition, to compensation? To rely on the "extraordinary circumstances" defence, a carrier must show, not only that the strike is an "extraordinary circumstance", but also that it could not have avoided the strike even if it had taken all reasonable measures. Every case will therefore depend very much on its own facts. In some cases it might be shown that a carrier, acting reasonably, could have taken measures to avoid a strike by its staff and, if so, it might not have a defence to paying compensation under the Regulation. It is difficult to see what could have been done to avoid the secondary and sudden industrial action which led to widespread cancellations at Heathrow in August. If this does not qualify as "extraordinary circumstances" it is hard to see what would.
Legal Developments
The European Commission continues to pursue enforcement of the Regulation with religious zeal. In July this year it initiated infringement proceedings against Austria, Belgium, Italy, Luxembourg, Malta and Sweden for failure to meet their obligations to establish penalties to be imposed on carriers if they do not comply with the Regulation. The UK, as carriers will be only too aware, implemented its own legislation making it a criminal offence if carriers do not comply.
In the meantime, the legal challenge to the validity of the Regulation is moving towards a conclusion – one which is looking pessimistic for carriers in the light of the Advocate General’s opinion referred to on page 1. Whatever the ultimate outcome of the ECJ case, for the time being carriers must continue to strive to comply with the Regulation as drafted, interpreting it as best they can.
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