ECJ Advocate General proposes the Court to confirm its "Sturgeon"-Judgement
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>>.
Germany: Supreme Court to hear cases on airline personnel strikes as "extraordinary circumstances"
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.
Germany: Fiscal Court decides over VAT on hotel vouchers
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>>.
UK: Hotel owner fined in fire safety trial
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
UK: OFT fines British Airways in fuel surcharges price-fixing case
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
Canada: Supreme Court decides on jurisdiciton over foreign companies
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>>.
ECJ Advocate General Bot: compensation for denied boarding not limited to overbooking
According to Advocate General Bot, an air carrier must compensate passengers if they have been denied boarding on account of the rescheduling of their flight following a strike at the airport which took place two days beforehand and affected a previous flight. Only denied boarding justified on grounds relating to the personal situation of those passengers may exempt the air carrier from that obligation.
Following a strike by staff at Barcelona Airport (Spain) on 28 July 2006, the scheduled 11:40 flight from Barcelona to Helsinki operated by the air carrier Finnair had to be cancelled. Consequently, Finnair decided to reschedule its flights so that the passengers for the cancelled flight should not have too long to wait.
Accordingly, those passengers were taken to Helsinki (Finland) on the 11:40 flight the following day, 29 July 2006, and on a specially arranged flight departing at 21:40 hours on that day. The consequence of that rescheduling was that some of the passengers who had bought their tickets for the 11:40 flight on 29 July 2006 had to wait until 30 July 2006 to go to Helsinki on the scheduled 11:40 flight and on a 21:40 flight which was specially arranged for the occasion. Similarly, some passengers, like Mr Lassooy, who had bought their tickets for the 11:40 flight on 30 July 2006 and had duly presented themselves for boarding, went to Helsinki on the special 21:40 flight.
Taking the view that Finnair had denied him boarding, Mr Lassooy brought an action before the Finnish courts seeking an order for that air carrier to pay him the flat-rate compensation of €400 provided for by European legislation in respect of intra-Community flights of more than 1500 kilometres.
The Korkein oikeus (Supreme Court, Finland), before which the case was brought at final instance, has doubts as to the interpretation of the concept of ‘denied boarding’ and seeks a ruling from the Court of Justice in this regard.
In his Opinion delivered on April 19, 2012, Advocate-General Yves Bot states, first of all, that the concept of ‘denied boarding’ must be interpreted broadly and cannot be limited to overbooking. That finding is apparent not only from the travaux préparatoires for the adoption of the relevant European legislation, but also from the objective which it pursues, namely that of ensuring a high level of protection for air passengers.
The Advocate General also states that ‘denied boarding’ cannot be justified by grounds relating to the rescheduling of flights as a result of extraordinary circumstances, such as a strike at an airport. According to the Advocate General, the denial of boarding to passengers may be justified solely on grounds relating to the personal situation of those passengers.
Denied boarding is an individual measure taken by the air carrier arbitrarily against a passenger who has nevertheless satisfied all the conditions for boarding. That measure loses its arbitrary character only if the passenger himself commits a fault, for example by presenting invalid identity documents, or if, by his behaviour, he endangers the safety of the flight and/or of the other passengers, for example if he is inebriated or shows signs of violence. In such cases, the decision not to allow the passenger to board is attributable to the passenger himself, who cannot claim any compensation or care. On the other hand, the decision to deny boarding based on reasons which are wholly unrelated to the passenger concerned cannot have the effect of depriving him of all protection.
Moreover, given that the airport strike cannot be attributed to Finnair, that air carrier has the right, if it considers that it does not have to suffer the consequences of that strike, to seek compensation from the persons responsible, in accordance with the national law applicable.
Such an interpretation is not contrary to the principle of equal treatment, even though the fate of the passenger denied boarding by the air carrier, as a result of extraordinary circumstances, is more favourable than that of the passenger whose flight has been cancelled or delayed as a result of those circumstances since the former is compensated but the latter is not. The principle of equal treatment requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. However, passengers who are the victims of a flight cancellation or delay are not in the same position as passengers to whom the air carrier has denied boarding. Whereas denied boarding affects one or more passengers, in cases of flight cancellation or delay all the passengers are concerned and affected in the same way.
Furthermore, where the flight cancellation or delay is due to extraordinary circumstances, the air carrier is not required to pay the compensation provided for by EU law since it had no control over those events. By contrast, that is not the case where a passenger is denied boarding after the air carrier has decided to reschedule flights owing to extraordinary circumstances. Simply by making that decision, the air carrier makes one or more passengers selected completely arbitrarily suffer trouble and inconvenience. For that reason, because the harm suffered is attributable to the air carrier, compensation remains payable in order to dissuade the carrier from resorting to such a practice and to give preference to calling for volunteers to surrender their reservations.
Source: ECJ press release No 45/12 of April 19, 2012
Full text of Opinion in case C-22/11, Finnair Oyj v Timy Lassooy available here>>.
German Supreme Court decides on organizer's liability for changing the departure of the return flight to an earlier time
The plaintiff's spouse had booked a one week package holiday to Turkey at EUR 369 per person for the plaintiff and himself. The return flight was scheduled to depart on June 1, 2009, 16:40 hrs. One day before, the organizer changed the departure time to 05:15 hrs and thus the plaintiff and her spouse were to be picked up at the hotel as early as 01:25 hrs. They therefore looked for an alternative return flight which they booked on their own and which departed at 14 hrs.
The plaintiff (to whom her spouse had assigned his claim) sued for reimbursment of the full package price (except EUR 70 for meals), compensation for the costs of the alternative flight and compensation for loss of holiday enjoyment.
The organizer referred to his general conditions of contract due to which
he had reserved the right to alter the times of fligths as long as this would not affect the overall arrangement of the package;
consumers were not allowed to assign any claims to other persons.
Both the first instance court and the appelate court only granted a small reduction of the package prize for the plaintiff herself.
Upon further appeal of the latter, the German Civil Supreme Court (BGH) held that the change of the departure time of the return flight constituted malperformance of the contract which entitled the plaintiff to claim for damages if either she had asked the organizer to provide an alternative flight before booking same on her own or such demand seamed unreasonable according to the circumstances . There was no justified interest on behalf of the organizer to interdict an assignment of such claims. However, as the change did not cause any significant detriment with regard to the holiday arrangement there was no claim for loss of holiday enjoyment.
As a result, the Supreme Court referred the matter back to the appelate court to complete the findings on a potential demand to the organizer and the actual costs of the alternative flight booked by the plaintiff.
Source: BGH press release 47/12 of April 17, 2012
Austria: tricky copyright traps in hotel advertising
The plaintiff, a painter, had made a sales exhibition of her paintings in the premises of the defendant hotel company. After the exhibition, the paintings (none of which had been sold) remained in the hotel for some time for a monthly fee to be paid by the defendant. During the exhibition, pictures of the hotel were taken which the defendant then used on its website. On one of these pictures, the plaintiff's painting "Mozart Symponie No 41" could be seen hanging on a wall in the background. By clicking on the picture it could be enlarged and then, when printed out in A4 format, showed the painting in a size of 11x12 cm. The defendant had not asked for the plaintiff's permission to publish the picture on the website. The plaintiff filed a motion for an injunction.
In its decision of August 9, 2011, the Austrian Civil Supreme Court (OGH) upheld the lower courts' judgments dismissing the claim.
The Supreme Court held that making the picture available on the website constituted a copy of the painting shown in the picture as the enlargement gave a sufficient impression of the main characteristics of the original painting. However, the plaintiff had been aware that pictures for advertising purposes were taken of the hotel during the exhibition. As she had not objected the taking of these pictures, the defendant could have relied on her implicit consent to make these pictures availble on the website. Taking into account, that the picture had been removed from the website as soon as the lawsuit had been served to the defendant, the claim had to be dismissed.
Full text of OGH decision 4 Ob 101/11y of August 9, 2011 available in German here>>.
Summary available on the ECJ's hearing in pending cases seeking a revision of "Sturgeon"
The joined cases Nelson v. Deutsche Lufthansa (C-581/10) and TUI et al v. CAA (C-629/10), both seeking a revision of the "Sturgeon" judgement (joined cases C-402/07 and C-432/07), have been heard at the Court of the European Union in Luxembourg on March 20, 2012. In his blog, Cees van Dam, visiting Professor at King’s College London, provides a brief summary of the hearing. Reportedly the the Governments of France and Poland, the European Commission and the European Parliament filed statements arguing that Sturgeon was in line with the Montreal Convention while the Governments of the United Kingdom and Germany and by the EU Council of Ministers supported the view of Lufthansa and TUI that the right to compensation in case of delay as set out in Sturgeon was not in line with the Montreal Convention. According to Cees' report, the Judge-Rapporteur in the two pending cases is Judge Malenovsky who has also been Rapporteur in the cases IATA and Sturgeon.
