Italy: Flight Cancellation: The European Court Of Justice Rules On The Time-Limit For Bringing Actions For Compensation. Repercussions On The Italian Law System

1. European Court of Justice ruling of 22 November 2012

On the 22 November 2012 the European Court of Justice has decided a preliminary ruling from the Audiencia Provincial de Barcelona (Spain) regarding the interpretation of Regulation (EC) No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights.

In December 2005 a Spanish passenger suffered denied border by KLM for the cancellation of the flight and in 2009 he brought an action against KLM in Spain on the basis of Regulation (EC) No 261/200418, claiming a compensation for the damage sustained as a result of the cancellation of flight in question.

KLM contended that the action was started after the two-year period foreseen by Article 29 of the Warsaw Convention.

The Spanish judge decided to refer the question to the Court of Justice for a preliminary ruling establishing whether Regulation No 261/2004 is to be interpreted such as the time limit for bringing proceedings are those provided by Article 35 of the Montreal Convention (two-year period) or by other European Union provisions or domestic law.

The ruling of the ECJ states that Regulation No 261/2004 must be interpreted as meaning that the time-limits for bringing actions for compensation under its Articles 5 and 7 are determined in accordance with the rules of each Member State on the limitation of actions.

The decision of the ECJ is based on a fundamental principle established by case-law that, in the absence of provisions of EU law, the matter has to be subject to the domestic set of rules of Member States to lay down the detailed procedural rules governing actions for safeguarding rights which individuals derive from EU law (see, to that effect, Case C-429/09 Fuß [2010] ECR I-12167, paragraph 72).

Regulation No 261/2004 aims to improve the protection of passengers establishing on compensation and assistance to them in the event of denied boarding and of cancellation or long delay of flight.

On the basis of such Regulation in case of cancellation of a flight, the passengers have the right to receive assistance by the carrier also through the reimbursement of the ticket or an alternative flight and the right to compensation. The passengers have the right to compensation by the air carrier and assistance when a flight is delayed.

Regulation No 261/2004 contains no provision fixing a time-limit for bringing actions to enforce the rights guaranteed by that regulation.

Under these circumstances, KLM estimated that Article 29 of the Warsaw Convention and Article 35 of the Montreal Convention were applicable and therefore the action should have been brought to the Court within two years.

2. Regulation 261/2004/EC represents an autonomous compensatory regime in respect of the Montreal Convention

The defense sustained by KLM – which aims at a direct application of the provisions contained in the above mentioned international Conventions – does not take into consideration that the compensation foreseen by Regulation 261/2004/EC represents an autonomous compensatory regime for damage relating to inconveniences derived from flight delay or cancellation.

This is a principle already expressed by the European Court of Justice. The ruling of the Court of 10 January 2006, regarding the lawsuit C-344/04, had once more stressed that provisions contained in Regulation 261/2004/EC represent "standardised and immediate compensatory measures, they are not among those whose institution is regulated by the Convention"¹.

Such principle has been recently reiterated in the ruling of 23 October 2012, in cases C-581/10 and C-629/10 in which the Court intervened once more on the matter of air passengers' protection examining in depth the matter of flight delay.

In such an occasion, the Court, aiming to clarify if Articles 5 and 7 of Regulation 261/2004/EC are valid and compatible with Montreal Convention in the field of flight delay, stated that "the loss of time" – which constitutes an inconvenience, like other inconveniences due to denied boarding, flight cancellation or prolonged delay – "cannot be categorised as 'damage occasioned by delay' within the meaning of Article 19 of the Montreal Convention" and it has to be considered 'outside the scope of Article 29 of that Convention'"².

The Court continued asserting that "the obligation to pay compensation which stems from Regulation No 261/2004 is additional to Article 29 of the Montreal Convention"³.

Ultimately, Regulation 261/2004/EC, though being complementary to the regime of damage compensation provided by Warsaw and Montreal Conventions, is outside the field of application of the same Conventions, placing itself upstream of the provisions of the mentioned international Conventions.

3. Effects of the 22 November 2012 ruling on the Italian law system

Regarding the Italian law system, the application of the principle established by the ruling under exam does not produce substantial effects.

Indeed, even pursuant to the decision of the Court of Justice (stating that the national law system is due to establish the term by which the legal actions to obtain the compensation provided by Regulation 261/2004/EC have to be started), the consequence is to subject anyway the rights resulting from the transport contract of persons and baggage to the Montreal Convention, i.e. to the two years expiration period, as hoped by KLM in its lawsuit.

This occurs because, reforming the aeronautical section of the navigation code between 2005 and 2006, Italy has harmonised a consistent part of the provisions contained in the code to the discipline in force in the community and in the international field.

In fact, Article 941, paragraph 2 of the Italian navigation code, which identifies the regulations applicable to the transport of persons and baggage, establishes that such transport, "including the air carrier's responsibility for passenger's personal damage, is ruled by the community and international laws in force in the Italian Republic". Since Italy is a signatory country of Warsaw and Montreal Conventions, the provisions contained in such Conventions shall apply to the transport of persons and baggage, including the air carrier's responsibility.

As far as the prescription period of the rights resulting from the transport contract of persons and baggage is concerned, Article 946ter of the Italian navigation code states that "Rights deriving from the transport contract of persons and baggage are subject to the expiry provisions established by the international rules mentioned in Article 941".

Therefore, the reform of the navigation code has produced the effect of making applicable the uniform international rules on this matter to the national law system, whenever there are no contrary provisions.

Ultimately, considering the principle stated by the Court of Justice (by which "failing specific EU provisions, the national law system is due to rule the procedural terms aiming at guaranteeing the protection of individuals' rights on the basis of the EU law") and considering the reference to the international uniform rules made by the Italian legislator, the ruling under analysis does not entail special repercussions on the Italian law system, having the sole effect of subjecting the rights resulting from the transport of persons and baggage – and not only the air carrier's responsibility – to the Montreal Convention which in this regards establishes the two years expiration period.

Footnotes

1 pt. 46, decision of 10 January 2006.

2 pt. 49, decision of 23 October 2012.

3 pt. 57, decision of 23 October 2012

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