Following the collapse of Thomas Cook we brought a number of claims under s.75 of the Consumer Credit Act 1974 against credit card suppliers in relation to the tour operator's alleged breach of contract. All very satisfactory, and a neat way of recovering damages where a potential Defendant does not have funds to satisfy any judgment or settlement. But what was the position, we often mused, where the Claimant was not the cardholder, but merely a member of the holiday party in respect of whom the booking had been made? Where (for example) a parent booked a holiday on behalf of his or her family, and one of the children was injured as a result of the negligence of a supplier, it seemed an odd result if the cardholder who made the booking could recover for his or her diminution in value, even a secondary victim claim for psychiatric damage, but the primary victim could not. And yet the wording of the Act is clear; in order to make a claim under s.75 the Claimant must be the debtor, and nothing else is good enough. We now know the answer to this conundrum; the Court of Appeal, in Cooper v Freedom Travel Group  EWCA Civ 1557, has decided that the clear wording of the Act has primacy, and in such circumstances the Claimant must indeed be the credit card holder. Another Travel Law Mystery solved.
Are Consumers still getting duped by airlines?
Investigations by Which? Travel in summer 2022 and by the Hungarian Competition Authority in October 2022 reveals how some airlines bend, ignore and potentially break the law.
In October 2022, the Hungarian Competition Authority ("GVH") concluded a set of checks on websites associated with the air travel sector to identify breaches of consumer protection law. The GVH found that the majority of the websites of airlines operating in Hungary (including low-cost airlines) and ticket price comparison websites distort consumers' choices through undetectable methods. The GVH provided recommendations to the operators of these websites and to consumers to comply with consumer protection regulations. Depressingly the GVH findings seem to be on a par with the findings by Which? that major airlines could be breaching passenger rights.
Which? looked at seven major airlines' Terms & Conditions and found some making misleading claims about compensation or charging unreasonable fees. One airline, Tui, implied that it could choose to simply refund passengers instead of rerouting them. In fact, under Regulation (EC) 261/2004 - the Denied Boarding Regulation - when a flight is cancelled the passenger decides whether they want to be rerouted or refunded. Furthermore, the investigation revealed that some carriers, including Ryanair, even have terms that allow passengers who have attempted to claw back money from airlines via a chargeback on their credit card, to be put on a blacklist. Ryanair in response to the blacklisting allegation claims that fewer than 850 passengers had unlawfully processed chargebacks via their credit card.
Summer 2022 saw passengers facing travel chaos, with large scale cancellations from British Airways and EasyJet. Some other airlines struggled to cope with staff shortages as the travel industry recovers from the impacts of Covid-19 and Brexit. Consequently, British Airways was reported to the Civil Aviation Authority (CAA) earlier this year for failing to inform customers of their right to compensation or to reroute them when their flight was cancelled or disrupted. British Airways was criticised by Which? for having misleading terms including that it will compensate passengers in some circumstances if it 'delays a flight by five hours or more' but under the Denied Boarding Regulation passengers are entitled to up to £520 in compensation after delays of over three hours, not five.
Most of the airlines looked at by Which? had terms that were potentially unlawful. American Airlines terms say that if passengers are severely delayed their 'sole obligation is to refund the remaining ticket value and any optional fees'. It even claimed that the law in Texas, where it is based, will apply to the flight. However, if you are a passenger flying from the UK, British law applies which means that compensation is available under the Regulation. Tui's terms gives the impression that it will decide whether to refund or reroute passengers in the event of cancellations, whereas the law is that it is the passenger who can choose between these options.
Many airlines' terms, including Eurowings and British Airways, could also have confused passengers about how long they have to bring claims. Passengers have up to six years to make a claim if they are denied boarding or severely delayed but only two years if they want to make a claim for something more serious such as injury under the Montreal Convention. When Which? checked Lufthansa's Terms & Conditions it made no mention of the Regulation. When Which? contacted Eurowings it did agree to amend its terms, to make it clear that passengers have up to six years to claim compensation under the Regulation but as at the date of this article their general conditions of carriage appeared unchanged.
On one of its forms Ryanair tells customers that they can be compensated for 'delays within the control of Ryanair' but Which? considered this to be disingenuous because airlines are expected to be able to cope with events outside their immediate control such as poor weather and industrial action. Airlines are still obligated to pay compensation unless the events are considered 'extraordinary circumstances' such as very extreme weather conditions. Wizz Air also incorrectly told its passengers that they were not due compensation in the event of a diversion.
Both Ryanair and Wizz Air were found to make considerable profits from high fees that are not included in the initial ticket price that customers see on price comparison sites such as Skyscanner. They charge a premium for simple administrative services, such as ticket transfers, correcting names and checking in at the airport. Wizz Air lists 51 fees on its website, including up to ?13 for 'admin' and ?15 for booking through a call centre. Which? thought these were difficult to justify.
The Civil Aviation Authority ("CAA"), the UK airline regulator, launched its own investigation into Terms & Conditions in 2019. It criticised some airlines and recommended that they introduce a 'key terms' document to make them easier to understand. Despite this, Which? found in their investigation in 2022 that many terms were still confusing and difficult to understand. Since the CAA's review no enforcement action has been taken against airlines, despite rampant rule breaking during the pandemic. Which? Travel reported ten of the biggest carriers for failure to pay compensation on time but none were penalised.
The government has since said that it will give the CAA greater powers to take direct action when airlines break the law. However, whether the CAA will do so remains to be seen. The CAA has only once in almost 20 years applied to the courts for an enforcement order against an airline, which was in 2018 when Ryanair refused to compensate passengers whose flights were cancelled because of its own staff strikes. Although Ryanair lost in the High Court in April 2021, find the judgment here1, and in the Court of Appeal at a hearing in January 2022, find the judgment here. 2 the airline is seeking to appeal.
The Hungarian Competition Authority's recent sweep was designed to check compliance with consumer protection law. It particularly focused on the issue of the use of so-called dark patterns which are digital messages and user interfaces that can pressure consumers to make undesirable choices without being noticed. The most common distortions detected by the GVH were psychological pressure (e.g. "only 2 tickets available at this price"), manipulation of perception (i.e. some offers are highlighted in striking colours, while cheaper, simpler solutions are harder to spot), ambiguous wording, overloaded information which may confuse and distract consumers, and concealment of important information and options.
However, at this stage, the GVH has only made suggestions to eliminate the unlawful practices of market players. If the GVH finds that businesses do not take appropriate steps to ensure consumer protection regulations, it may initiate competition control procedures.
Clearly, there is much more that could be done, by major airlines operating throughout the UK and Europe and their Regulators, to bolster airline passenger protections and rights. The UK government announced in January 2022 that it was considering mandating all airlines to be part of the aviation Alternative Dispute Resolution (ADR) scheme, which would give consumers a route for escalating certain complaints that cannot be settled between the consumer and airline without needing to go to Court. Under the new proposals all airlines would have to join the scheme, rather than the present voluntary opt-in, which would give airline passengers access to this method of dispute resolution regardless of who they fly with. It remains to be seen whether this proposal is implemented by the UK Government or whether the CAA will step in more swiftly in future to protect consumers.
About the Authors
Stephen Glynn was called in 1990 and is ranked as a tier one personal injury practitioner in the Legal 500 and Chambers and Partners. He is highly experienced in claims involving catastrophic injury, with a particular interest in clinical negligence. He writes two chapters in Kemp & Kemp on the Quantum of Damages and edits Clinical Negligence Law and Practice and Asbestos Claims Law and Practice.
Called in 2018, Francesca Kolar accepts instructions over all of chambers' practice areas, including most particularly personal injury and clinical negligence. Prior to pupillage she spent two years teaching debating to students in inner-London secondary and primary schools, for the social mobility charity Debate Mate.
Late applications for new expert evidence
What test must a court apply when a party makes a late application to rely upon new expert evidence? This was the main issue in dispute in a recent appeal before His Honour Judge Glen at the County Court in Southampton, in the matter of Martin Warren v Yesss (A) Electrical Limited, unreported, 28th November 2022.
It sounds like a simple enough question, but, in fact, the question might be more complex than the answer. For starters, what rule is engaged by a late application for expert evidence? And how late does an application have to be before it is "late" or "very late"?
In this case, the District Judge allowed the Respondent's late application to rely upon new expert evidence. He held that, in the circumstances, the correct test to apply to the application was a consideration of the overriding objective.
The Respondent contended that the appropriate rule was that of CPR 35.4(1) – No party may call an expert or put in evidence an expert's report without the court's permission. Plainly, if case management directions have already been set, including permission for, and timing of, expert evidence, then any further expert evidence, not included in that order, requires the court's permission.
The Appellant contended that an application of this sort engaged CPR 3.9 – On an application for relief from any sanction imposed for a failure to comply with any rule, practice direction or court order, the court will consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need - (a) for litigation to be conducted efficiently and at proportionate cost; and (b) to enforce compliance with rules, practice directions and orders. It was common ground that there was no express sanction in this case, but the Appellant contended that the Respondent's application attracted an implied sanction and pointed, primarily, to Boyle v Commissioner of Police of Metropolis  EWCA Civ 1477, to Karbhari v Ahmed  EWHC 4042 and to Elliot v Stobart Group Limited  EWCA Civ 449. In Karbhari, Mr Justice Turner said (at paragraph 23) that:
In my view no legitimate conceptual distinction can be drawn between the consequences of a failure to serve an expert's report and a failure to serve a witness statement. Where the court has ordered witness statements to be served by a certain date and they have not been served by that date then to obtain the court's permission ... the party in default must persuade the court to grant relief under CPR 3.9
This was the thrust of the Appellant's argument - that in all three cases, a party had failed to serve either an expert's report or a witness statement in time, in all three cases it had been held that, as a rule had been broken, an application for relief from sanction was necessary, and that any failure to serve an expert's report in time attracted an implied sanction. This was all set within the context of the recognition that, in recent years, the courts were much less tolerant of failure to serve expert evidence in accordance with previous orders of the court, just as they had been becoming less tolerant of other breaches of court orders.
However, the thrust of the Respondent's argument was that those authorities were distinguishable because they concerned a qualitatively different situation: namely, that there could not have been a failure to serve the expert's report, as it did not yet exist - the Respondent had sought permission to rely upon expert evidence in a wholly new discipline, one which the Respondent had not contemplated relying upon until late in the day.
HHJ Glen agreed that those cases were distinguishable and noted that, in each of those cases, the party seeking relief had failed to comply with a deadline set either by the Court or by the rules and where therefore the evidence or other step in question could not otherwise be deployed.
In T (a child proceedings by his litigation friend M) -v- Imperial College Healthcare NHS Trust  EWHC 1147 (QB) permission was sought to rely upon an expert's report in a new field, over a year after agreed directions had been ordered. Approving of the decision in Mark v Universal Coatings & Services Limited  EWHC 3206 (QB), Mr Justice Stewart noted that CPR 35.4 did not contain an express sanction. He held that it did not contain an implied sanction either - the rule simply stating that no party may call an expert or put in evidence an expert's report without the court's permission. The rule simply requires the court to give permission. The Respondent contended that this was the correct approach in the circumstances and HHJ Glen agreed: 'There is a logical distinction between cases where a party has defaulted in respect of a time limit imposed by a Rule or order and those where there has been no such default. In the former case, the applicant requires an order to cure their default. In the latter case, the applicant simply seeks to engage the Court's discretion.'
Mr Justice Stewart held that the correct test to be applied to late applications for expert evidence depended upon whether the application was "late" or "very late". He ruled that a "very late" application was one where (i) the trial date had been fixed, and (ii) permitting the application would cause a trial date to be lost. A late application fell to be determined on a consideration of the overriding objective, whereas a very late application had to be measured against four specific considerations (see Heiser v The Islamic Republic of Iran & Anor  EWHC 2073 (QB)):
- Whether there is a good reason for the late application;
- The significance of the new material;
- Consideration of prejudice to each party;
- The need to do justice to all the parties having regard to the overriding objective.
A further point of dispute in the appeal was that the Appellant contended that the District Judge at first instance should have held that the application was very late, because two trial dates had already been fixed and had both been vacated. But for the good fortune of witness unavailability, and an administrative error made by the court, the Appellant argued, the Respondent's application would have come at a time when a trial date was fixed and permitting the application would have been likely to cause the loss of the trial date. The Appellant also argued that acceding to the application meant that fixing of the trial date would be delayed. HHJ Glen dealt with this point simply. He held that 'The District Judge had to deal with this application on the basis of the circumstances as they existed at the time that it came before him. On that basis, neither of these requirements were met.' Herejected the argument that the requirements were also met if fixing the trial date may be delayed.
HHJ Glen therefore held that (i) CPR 35.4 did not imply a sanction into late applications for new expert evidence (ii) the District Judge at first instance applied the correct test, by considering whether the application was late or very late. Appeal dismissed.
Bernard Pressman acted for the Respondent in this case.
About the Author
Bernard Pressman was called in 2004, and now specialises in personal injury claims. He has a particular interest in claims involving issues around fraud and fundamental dishonesty and is at ease with the complex rules on the disapplication of qualified one way costs shifting.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.