The sky’s the limit for flight delay claims

Can a technical fault that is not detectable by a system of maintenance or inspection be classified as an ‘extraordinary circumstance’ so that…

Can a technical fault that is not detectable by a system of maintenance or inspection be classified as an ‘extraordinary circumstance’ so that compensation for a delayed flight is not payable? No, said the Court of Appeal, in Limited v Ronald Huzar.  The arguments advanced by the airline according to LJ Eilas, sought to make ‘an event extraordinary which in common sense terms is perfectly ordinary’. Read the decision

This decision has huge ramifications for the airline industry as it is akin to applying strict liability. Airlines will be liable to pay compensation if the flight is delayed, even if there were no steps they could have taken to prevent the fault arising.  The decision penalises smaller airlines that don’t have spare aircraft to immediately step in with a replacement flight to minimise delays. 

Many cases had been stayed pending the decision and the floodgates have been opened; it is estimated that 30% of all flight delay claims are as a result of a technical fault.  Compensation to individual claimants is typically low, but multiply  this by a plane load of passengers and the figures become significant and impacts upon the fine margins within which airlines compete. This is especially true on short haul flights where the compensation is often more than the price of the original ticket or holiday for the whole family.

With a Court of Appeal decision in Dawson v Thomson Airways Limited due imminently on limitation, claimant firms are already farming for back book claims which have previously been denied.

Both decisions have the potential to threaten the value for money which airlines offer their customers. Will we see prices increasing to factor in any potential claims? There may be a knock on effect to contractual arrangements between airlines and their ground handlers, testing indemnity clauses in relation to delay.

The risk is that through no fault of the airlines, this claims process becomes the next PPI scheme and members of the public should expect texts and phone calls inviting them to claim. This seems counter intuitive given the lengths the court and the government have gone to in order to reduce the compensation culture in the PI market. It is particularly harsh for airlines and travel operators who have also been denied the benefits of the reforms in that injury market, such as the portal.

The Civil Aviation Authority (CAA) has written to airlines and noted that as an appeal is likely, airlines may face some difficulty in handling current claims as if an appeal was to be granted cases would be stayed until after the appeal. The CAA envisages that airlines may wish to wait until the outcome of an appeal before dealing with claims and envisages them contacting passengers and putting a statement on their website if they intend to adopt this approach.  We understand that airlines are planning to adopt this approach so for passengers nothing really will change and the claims will be deferred pending the outcome of the likely appeal; it seems the fight is not yet over.

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