The team at 1CL are all of a doodah today. Not only are a number of courts re-opening today for live hearings, on Thursday the Court of Justice of the European Union released two decisions with relevance to travel lawyers, and on Friday three airlines launched judicial review proceedings against the British government. Could these be the first faltering steps towards some kind of normality? Let us hope so.
We love to hear from our readers, and in recent times we’ve been asked to write articles, give webinars and training, and answer questions on a wide range of interesting issues. This week Phillip Havelock of the Michael Hill Partnership asked us what would happen if an outbound flight to a holiday destination were cancelled as a result of the Covid-19 pandemic, but the return flight remained, apparently, operational. The holidaymaker, who booked the flights together, would clearly be entitled to a refund for the cancelled flight; but what about the operational one?
Andrew Spencer writes:
The answer is Article 8(1) of the Denied Boarding Regulations:-
Right to reimbursement or re-routing
- Where reference is made to this Article, passengers shall be offered the choice between:
(a) – reimbursement within seven days, by the means provided for in Article 7(3), of the full cost of the ticket at the price at which it was bought, for the part or parts of the journey not made, and for the part or parts already made if the flight is no longer serving any purpose in relation to the passenger’s original travel plan…,
So if the outbound flight is cancelled, and the customer chooses a refund, s/he is entitled to a refund of the parts of the journey not made, ie the outbound and the return flights.
If your flight is cancelled, your airline must let you choose between either receiving a refund or accepting an alternative flight.
If you choose a refund, you can get your money back for all parts of the ticket you haven’t used. For instance, if you’ve booked a return flight and the outbound leg is cancelled, you can get the full cost of the return ticket back from your airline.
Thank you to Michael for an interesting question.
Quarantine Quarrel: Judicial Review Launched
It’s no secret that the airline industry has been hit hard by the pandemic. IATA has warned that global airline losses are likely to exceed $100 billion; $84 billion in 2020 and a further $16 billion next year. Every day the industry loses a staggering $230 million, if IATA’s figures are to be relied upon. The World Travel & Tourism Council has warned that if the government’s quarantine proposals and advice not to travel are maintained, the tourism industry is likely to haemorrhage nearly three million jobs, and its economic modelling suggests a drop in UK GDP of $186 billion. It proposes a four-point plan: removal of the quarantine policy and replacement with air corridors to tourist destinations, revision of the FCO advice against travel, adoption by tourist destinations of its Safe Travels initiative, and implementation of a test and trace policy.
People do seem to be booking holidays again, but for 2021, not for this summer. Partly there is fear of the dreaded second spike; partly would-be holidaymakers are concerned about the prospect of booking a holiday at a time when the FCO is still advising against non-essential travel; and of course the availability of travel insurance is limited, and anyone travelling against FCO advice is likely to invalidate their insurance in any event. But the airlines take the view that the quarantine measures in place since 8th June are primarily responsible for the reluctance to travel.
So it is that on Friday BA, Easyjet and Ryanair (an unlikely trio if ever there was one) launched legal action in a bid to overturn the policy. The judicial review, which the airlines have requested should be heard as a matter of urgency, will seek disclosure of the science behind the measure, which must be justified on grounds of necessity. The airlines assert that it is not, and suggest an alternative, more restricted quarantine policy relating only to visitors from high risk countries. The government contends that the combination of air bridges between countries with similar infection rates and the blanket quarantine policy for people entering the country from all other countries is a more appropriate response to the risk.
Whether or not the airlines’ challenge succeeds, however, it seems unlikely that holiday bookings will increase significantly until the FCO also changes its advice regarding international travel; and there is no indication that it has any intention of doing so. The airlines already have grounds for complaint as a result of the government’s failure to bail out the industry (unlike, for example, France and Germany); they have legitimate reason to believe that their pleas for assistance are likely to continue to go unheard as time goes on and the 2020 summer season is lost.
About the author
Called to the Bar in 1997, Sarah Prager has been listed in the legal directories as a Band 1 practitioner in travel law for many years. Together with her colleagues at 1 Chancery Lane, Matthew Chapman QC and Jack Harding, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She is Best Lawyers’ travel lawyer of the year 2020/2021.
Extraordinary Circumstances and Denied Boarding: LE v TAP
The CJEU has ruled on whether the actions of an unruly passenger who behaved in such a manner as to cause the pilot to divert a flight to an airport other than the airport of arrival, so that the passenger could be disembarked, was inherent in the normal exercise of the activity of the air carrier. The court held that although carriage of passengers exposed air carriers to the duty to manage their behaviour, the behaviour of an unruly passenger was not, in principle, under the control of the air carrier, as it was the act of a passenger whose actions and reactions were not necessarily foreseeable, and the crew only had a limited means of controlling the passenger. However, if an air carrier took on board a passenger who displayed behavioural problems before or during boarding, any unruly behaviour of the passenger would be within the control of the carrier and the behaviour would not be considered an ‘extraordinary circumstance’. Presumably the same might be said of a passenger whose attention to the drinks trolley causes his or her behaviour to become uncontrollable.
However, an air carrier would not be deemed to have taken reasonable measures, thus releasing them from their obligation to pay compensation under the Denied Boarding Regulations, simply by re-routing a passenger on their next available flight which arrived a day later. There would have to be no possibility of either a direct or indirect re-routing of a flight by the carrier, or indeed any other carrier, arriving at a time that was not as late as the next flight of the air carrier concerned. In addition, an air carrier could argue that the implementation of such re-routing constitutes an intolerable sacrifice for that carrier, in the light of the capacities of its undertaking at the relevant time.
This case, which is the subject of a longer briefing, also published today, is an interesting addition to the ever-growing body of CJEU caselaw on the Denied Boarding Regulations and what they mean. It is also a salutary reminder to airlines that the obligation on them to take reasonable measures is a stringent one, and factors such as cost and logistics bear very little weight in relation to it.
About the author
Dominique Smith was called in 2016 and has a busy practice in travel law. She undertakes work for both Claimants and Defendants in package travel claims, contractual disputes, and other related claims. Dominique has a particular interest in cross-border clinical negligence claims and regularly appears in the Coroners’ Courts.
Territorial Limitation in Insurance Contracts: RB v TÜV Rheinland LGA Products GmbH & Allianz IARD SA
The auspices are not normally good for economic agents arguing for territorial restrictions in front of the Court of Justice of the European Union. If there’s one thing we ought to have learned from listening to Michel Barnier for three and a half years it’s that the EU does not suffer distortions of the Single Market gladly. A simple heuristic for predicting CJEU judgments might well be whichever party is arguing for drawing lines around Member States will probably lose.
Insurance company Allianz, therefore, may have expected their augurs to tell them this week that Jove’s eagle had been spotted in the left quadrant tearing a Gallic rooster limb from limb. For those not familiar with the interpretation of such signs, that would have meant the CJEU ripping up an Allianz insurance policy which limited the geographical extent of their cover to only France. But on this occasion the birds told a different story.
The facts of the case arose from the well-known PIP breast implants scandal of 2010. The applicant was a German national who underwent a breast implantation procedure in Germany involving implants manufactured by PIP (a French company) containing unauthorised and potentially harmful silicone. The applicant brought proceedings in the German courts against three Defendants: first, the doctor who had carried out the procedure; second, TÜV Rheinland who had inspected PIP’s products, approved their quality and certified them with the ‘CE’ marking; and third, Allianz, who were the inheritors of the insurance policy covering PIP’s product liability. PIP themselves had been liquidated in 2011.
After losing at first instance, the applicant appealed and the higher German court referred various questions to the CJEU. Relevant for the reference, the insurance policy by which Allianz provided cover to PIP included a clause which limited the geographical extent of the insurance to harm that occurred in France or the French overseas territories. The referring court were uncertain whether such a clause was compatible with Article 18 TFEU –
“Within the scope of application of the Treaties, and without prejudice to any special provisions contained therein, any discrimination on grounds of nationality shall be prohibited”.
The German court seem to have pounced on an opportunity which the facts of the case threw up to eke out from Luxembourg some clarity on an as-yet-not-fully-resolved issue: could the Court of Justice please answer once and for all in explicit and unequivocal terms whether Article 18 TFEU had horizontal effect?
The Court of Justice could not.
They skilfully dodged the question by going after the premise that Article 18 was even applicable to these proceedings. This could only be the case, they reasoned, if the situation that gave rise to the discrimination fell within the scope of EU law. However, they found that there was no EU Directive covering the particular facts of this case: not the Medical Devices Directive (93/42/EEC), not the Product Liability Directive (85/374/EEC), and not the Services in the Internal Market Directive (2006/123/EC). With no Directive, the only other inroad was if the discrimination touched on a fundamental freedom (i.e. free movement of goods, services or people). Again, in the CJEU’s finding, it did not. The applicant in this case had not exercised her FMoP rights – she was a German national who had undergone the procedure in Germany; the insurance contract did not engage FMoS issues – the insurer and the insured were both French companies and the applicant was not a party to the contract; and although there was clearly a cross-border FMoG element (i.e. transporting the implants from France to Germany), this was irrelevant to the discrimination at issue. It followed that no fundamental freedoms were in play in the proceedings, no EU law applied, the first condition of Article 18 was not satisfied, and it was not therefore applicable. It followed that the CJEU need not provide any further answers and they resolved there should be no further resolution.
Allianz could, therefore, chalk up a considerable (and possibly unlikely) victory leaving their territorial restriction intact, and return happily back to their legitimately-bounded France, presumably to offer a sacrifice of thanksgiving for their numinous victory.
Postscript: The case throws in contrast a recent domestic authority examining territorial restrictions in insurance contracts and EU law. In Hutchinson v Mapfre  EWHC 178 (QB), amongst other issues, the High Court ruled that a clause in the Defendant’s insurance contract limiting cover to “claims submitted within Spanish jurisdiction for events that have taken place in Spain” was an impermissible attempt to avoid the special jurisdictional rules of the Brussels (Recast) Regulation that were designed to protect the economically and legally weaker party. We will discuss the interplay and possible implications of these two judgments on territorially restrictive insurance policies at greater length at a later date.
About the Author
Tom Yarrow is chambers’ latest acquisition, having been called in 2018. Before joining chambers Tom was a civil servant working in various government departments, including as a policy advisor on the UK-EU Withdrawal Agreement at the Department for Exiting the European Union. During pupillage he worked with the Government Legal Department, practising in public law in the fields of public international law, justice and security, human rights and immigration. He has regularly appeared in judicial review proceedings for the Secretary of State for the Home Department, and as a member of the Attorney General’s ‘junior junior’ scheme, he is able to take instructions directly from government clients. He now practises in all of chambers’ practice areas and is an enthusiastic and valued member of the travel team.
Whilst most hotels would be only too pleased to welcome any guest who might walk through its doors just now, one hotelier in Germany is reported to have banned anyone weighing over 20 stone from staying at her premises. She took the decision after being sued by an overweight man whose bed collapsed as he slept. Given the choice between designer furniture and large guests, she chose the former, and has placed a disclaimer on the hotel website warning that its interior is not suitable for those weighing over 130kg.