Blogs

On May 15, 2012, ECJ Advocate General Bot has delivered his opinion in two pending cases where the national courts sought a review of the "Sturgeon"-Judgement. In this judgement, the Court of Justice had ruled that passengers whose flights are delayed may be treated, so far as the right to compensation is concerned, in the same way as passengers whose flights are cancelled. Thus, if they reach their final destination three hours or more after the arrival time as originally scheduled, they may seek flat-rate compensation from the airline, unless the delay has been caused by extraordinary circumstances. In the two pending cases lodged by the Amtsgericht Köln (Cologne local court) and the High Court of Justice of England and Wales, Advocate General Bot sees no reason why the Court should reconsider its interpretation. That interpretation is based, amongst other things, on the very objective of the European legislation, which is to ensure a high level of protection for air passengers regardless of whether they are denied boarding or whether their flight is cancelled or delayed, since they are all caused similar serious trouble and inconvenience connected with air transport. In his view, that interpretation is also consistent with the principle of equal treatment, by virtue of which passengers may not be treated differently depending on whether a flight has been cancelled or delayed when they suffer on that account similar damage consisting in a loss of time and thus find themselves in comparable situations so far as the right to compensation is concerned. Furthermore, the Advocate General takes the view that EU law is compatible with the principle of proportionality. Compensating passengers whose flights have been delayed does not, in his view, result in an arbitrary and unduly severe financial burden on air carriers, particularly since the frequency of delays of more than three hours, which confer entitlement to compensation, appears to be limited. Moreover, airlines are not obliged to pay compensation if they can prove that the cancellation or long delay is caused by extraordinary circumstances. The Advocate General observes that EU law is also compatible with the Montreal Convention and with the principle of legal certainty which requires that passengers and air carriers should know exactly the extent of their respective rights and obligations. Finally, the Advocate General considers the submissions of certain airlines, which request that the Court limit the temporal effects of the judgment to be given. They submit that the interpretation given by the Court should not be relied on as the basis for passengers’ compensation claims prior to the date of judgment in the present cases, except with regard to passengers who have already brought court proceedings as at that date. Advocate General Bot recalls that, as a rule, the Court’s judgments apply to legal relationships which arose and were established before the judgment ruling on a request for interpretation. He points out that the Court has already had the opportunity, in its judgment in Sturgeon, to rule on the question of compensation for passengers whose flights have been delayed and that it did not limit the temporal effects of that judgment. Accordingly, there is no need to limit the temporal effects of the judgment to be given in the present cases. Source: ECJ press release 63/12 of May 15, 2012 Find full text of opinion here>>.

The European Commission will hold a half-day stakeholders' conference on the revision of the Package Travel Directive (90/314/EEC) on 05 June 2012. The conference will take place at Charlemagne, room Jenk –– Rue de la Loi 170 – 1049 Brussels. It will primarily aim at hearing and collecting stakeholders' views on certain key issues related to the revision of the Directive.

On June 5, 2012, the German Civil Supreme Court (BGH) will hear two cases involving flight cancellations due to airline personnel strikes. In one case the appelate court (LG Köln) had held that the operating carrier may not refer to a strike of its own personnel as an "extraordinary circumstance", in the other case the second instance court (LG Frankfurt/Main) had decided to the contrary. There is no consensus yet whether or not a strike of the opreation carrier's own personnel can constitute "extraordinary circumstances" pursuant to article 5 sec 3 of Reg. 261/2004. It may therefore well be that the BGH lodges another reference for a prelimiary ruling of the ECJ to get a binding interpretation.

In a decsion of Sep. 8, 2011, the German Federal Fiscal Court (BFH) decided that the sale of hotel vouchers qualifies as a procurement of hotel accommodation rendered in exchange for an advance payment of the customer, which service has to be taxed  in the month in which the sale of the voucher (and not the redemption) took place. However, if subsequently  the customer redeemed the voucher for accommodation in a foreign country, the procurement service is not taxable in Germany and the respective VAT adjustments have to be made accordingly.   BFH judgement V R 42/10 of Sep. 8, 2011, availbale in German here>>.

A  hotel owner has paid the price for ignoring fire safety laws and been hit with a  £210,000 fine following a successful prosecution by London Fire Brigade. The case was a landmark hearing for the UK fire and rescue service, believed to be the first time that a jury – rather than magistrates or an individual judge - has convicted a defendant under the Regulatory Reform (Fire Safety) Order 2005. The Chumleigh Lodge Hotel Limited and its sole director Michael Wilson, had pleaded not guilty to 12 offences under the Regulatory Reform (Fire Safety) Order 2005. The defendants were sentenced at Blackfriars Crown Court on Monday (6 February). The offences date back to 18 May 2008 when London Fire Brigade was called to a fire at the hotel on Nether Street, Finchley. The blaze had spread quickly from a first floor guest bedroom, up a staircase to the floor above and along a corridor. Three people escaped from the fire, two by using the stairs and a  third by climbing out of a second floor window. Following the fire, London Fire Brigade fire safety inspectors visited the hotel and raised a number of serious fire safety concerns. These included defective fire doors, blocked escape routes and no smoke alarms in some of the hotel’s bedrooms. Mr Wilson was also unable to produce a suitable and sufficient fire risk assessment and was found not to have provided staff with adequate fire safety training. Source: London Fire Brigade press releaseof Feb. 8, 2012

The Institute for Human Rights and Business and Tourism Concern are convening a multi-stakeholder roundtable to explore the challenges and human rights responsibilities faced by the Tourism Industry. The event will take place in London on May 29, 2012. The event will explore what corporate human rights due diligence means for the tourism industry. For detailed information look here>>.

The U.S. Department of Transportation (DOT) issued on April 19 a notice to provide guidance to airlines and U.S. travel agents regarding compliance with the FAA Modernization and Reform Act of 2012. One of the issues addressed in the guidance letter is the requirement that, effective April 14, airlines and travel agents disclose to consumers countries that require the use of insecticides by airlines. Guidance document available here>>.

On April 19, 2012, the UK Office of Fair Trading (OFT) has announced its decision that British Airways (BA) and Virgin Atlantic Airways (VAA) engaged in anti-competitive practices in relation to the pricing of passenger fuel surcharges, and has imposed a fine of GBP 58.5 million on BA. VAA brought the matter to the OFT's attention and, under the OFT's leniency policy, has not been fined. The OFT has concluded that between August 2004 and January 2006, BA and VAA co-ordinated their surcharge pricing on long-haul flights to and from the UK through the exchange of pricing and other commercially sensitive information. This decision brings the OFT's investigation to a conclusion. Source: OFT press release 33/12 of 19 April 2012

Two cases, consoldiated on appeal, both involved personal injury claims by Canadian citizens arising from accidents they suffered during their holidays in Cuba. One of the defendants, Club Resorts Ltd., was the company that managed the two hotels where the accidents took place. Club Resorts argued that Ontario lacked jurisdiction over the actions, or in the alternative, that the doctrine of forum non conveniens should apply. The motion judges in both cases dismissed this argument and held that the Ontario courts had jurisdiction. The Ontario Court of Appeal upheld both decisions. The Supreme Court dismissed the appeals: applying the recognized presumptive connecting factors, the Ontario court had jurisdiction, and Club Resorts had failed to refute those presumptions. In the first case, the presumptive factor applied, whereby the litigation was connected to a contract entered into in Ontario. With respect to the second case, the presumptive factor was established on the basis that Club Resorts maintained an active commercial presence in Ontario. In both cases, the Supreme Court also declined to exercise its discretion under the doctrine of forum non conveniens, on the basis that considerations of fairness weighed in favour of the plaintiffs. Supreme Court Judgement Club Resorts Ltd. v Van Breda (2012 SCC 17) available here>>.

The Cruise Lines International Association (CLIA) announced that the United Nations' International Maritime Organization (IMO) agreed to the proposal of the United Kingdom, CLIA, and the Philippines to develop guidelines to address concerns related to alleged serious crimes and persons missing at sea. All 24 delegations that spoke at the IMO meeting on April 18 expressed their appreciation for the proposal and supported it without exception. Building upon an earlier proposal from CLIA, the United Kingdom led a coalition of government and industry stakeholders in support of the proposal. Key elements of the proposal include: preservation of evidence; medical and pastoral care for victims; effective and timely reporting to governments; and cooperation between governments with regard to investigations. The technical work necessary to complete the guidelines will begin immediately and will be led by the United Kingdom working with other member states of the IMO to ensure that the development of guidelines are proportionate for different ship types and without excessive burden to the Master and crew. A crucial element will be consultation and input from CLIA and other organizations with specialized expertise and consultative status within the IMO. Reoprted to IFTTA by Larry Gore.