26
Apr
21
Articles, Travel & Cross Border Claims
The Weekly Roundup: the Captain Sensible Edition

As well as bringing the annual 1CL Uncorking of the Sun Screen ceremony, this week has seen a number of notable case management decisions, and another determination by the Court of Justice of the European Union on Regulation (EC) No.261/2004 (‘the Denied Boarding Regulation’). We were delighted to see two Chancery Division judges coming to eminently sensible (if we may say so) decisions in interlocutory matters. First, in Melars Group Limited v East-West Lothian Logistics LLP [2021] EWHC 874 (Ch) Adam Johnson J granted relief from sanctions to a party which had failed to meet a deadline for providing security for costs; although the breach was serious and significant, the agreed timetable for payment had never been realistic, and it would be unjust to hold a party to a date it could never have met. It is to be hoped that this outcome will encourage sensible, rather than wishful, timetabling between parties and amongst judges. Then, in Various Claimants v MGN Limited [2021] 3 WLUK 521 (Ch), Mann J reminded us that the cost of amending pleadings will not always be payable by the amending party, particularly where the necessity for amendment is caused by the other party. It will be interesting to see whether a party forced to plead its case in the absence of disclosure from the other litigant will in future be able to rely on this authority in obtaining its costs of amending from the party withholding information in breach of protocol.

But just when we thought the High Court might be taking a benevolently flexible approach to the Civil Procedure Rules, we read of the unfortunate case of Boxwood Leisure Limited v Gleeson Construction Services and Another [2021] 4 WLUK 137 (TCC). There but for the Grace of God go all of us…

 

UnHappy Talk: Boxwood Leisure Limited v Gleeson Construction Services and Another [2021] 4 WLUK 137 (TCC)

This week O’Farrell J handed down judgment in Boxwood Leisure v Gleeson. The issue before the court was whether to grant relief which would validate a late service of a claim form.

The time for service had been extended by a court order. The Claimants, within the time allowed for by that order, served Particulars of Claim, the Response Pack, initial disclosure… but no claim form. The mistake was made by a trainee solicitor. It was not picked up at the time due to changes in working practices necessitated by the Covid lockdown (meaning hard copies of documents to serve could not be checked by a partner as they would usually be).

The served documents were returned a few days later, marked “addressee gone away”. At that point the error came to light and the Claim Form was served a few days late: on the Claimants’ case, as a result of an understandable error which caused no prejudice to the Defendant.

The Claimants applied for relief from sanction under CPR 3.9. They argued that the failure to serve the claim form on time was a breach of the court order granting an extension – meaning that the court was not limited by the very restrictive rule set out in CPR 7.6. The Claimants contended the court could grant relief from sanctions; rectify an error of procedure; or vary the order to allow more time. The Defendant disputed this, arguing that the only way the court could extend the time for service of the Claim Form was under CPR 7.6(3).

Having undertaken a detailed review of the case-law, the judge noted that the court had wide, general powers to correct errors of procedure under CPR 3.10 or to grant relief from sanctions under CPR 3.9. However, these powers could not be used “to circumvent the specific conditions set out in CPR 7.6(3) for extending the period for service of a claim form”. This was sufficient to dispose of the matter.

However, the judge went on to state that she would not have granted relief from sanction under CPR 3.9 had this been open to her. The breach was “serious and significant”: the absence of timely service of the Claim Form meant the Defendant was not subject to the court’s jurisdiction. The judge accepted that what had happened had been fully explained and was the result of a genuine mistake. But, “having issued proceedings in circumstances where limitation was a live issue and where (the Defendant) had objected to the requested extensions of time for service of those proceedings, it was incumbent on the solicitors to ensure that the extended dates ordered by the court were met”. And when considering all the circumstances, the fact that granting relief would deprive the Defendant of a limitation defence meant it would not be appropriate to do so.

This case is a salutary reminder that there are limits to the indulgence litigants can expect from the court when errors are made because of altered working practices during the pandemic.

However, the error in this case – failure to serve the claim form – is a very particular sort of error, with specific consequences: as the judge noted, failing to serve the claim form meant the Defendant was not subject to the court’s jurisdiction. In fact, the result in this case echoes many previous court decisions which warn claimants not to leave issue and service until late in the day.

About the Author

Andrew Spencer was called to the Bar in 2004, and is listed in the Legal 500 as a Band 1 practitioner in travel law. He acted for the Claimant in the seminal case of Japp v Virgin Holidays Limited [2013] 11 WLUK 131, in which the Court of Appeal considered the time at which applicable local standards should be determined for the purposes of liability under Regulation 15(2) of the Package Travel Regulations; but he is equally comfortable acting for Claimants and Defendants in all travel related claims.

 

This is Your Captain Speaking: WZ v Austrian Airlines Ag (Case C-826/19)

As Brits prepare to take to the skies again from next month, our thoughts return to the Denied Boarding Regulation (Regulation (EC) No. 261/2004), which continue to apply post-Brexit as ‘retained EU law’.

WZ v Austrian Airlines AG (Case C-826/19) involved a passenger whose flight from Vienna to Berlin Tegel was diverted, due to an earlier delayed flight, to Berlin Schönefeld. The passenger ultimately arrived 58 minutes late, and at an airport outside the city of Berlin. As a result, he landed some 16km further from his home, and his journey from the airport to his home took half an hour more. He was offered no assistance of any kind from the carrier.

The passenger sued the carrier for €250 on the basis that his flight had been cancelled and that he ought to have been provided with assistance in getting home. At first instance the Austrian court held that the flight had not been cancelled and that the diversion to another Berlin airport did not constitute a significant alteration to the flight itinerary.

In a judgment handed down on Thursday 22nd April, the Court of Justice of the European Union (CJEU), concurring with the opinion of Advocate General Pikamae, decided that the diversion of a flight to an airport serving the same city, town, or region does not entitle the passenger to compensation as for a cancelled flight. The carrier must however, on its own initiative, offer to bear the cost of transferring the passenger either to the intended airport or to another mutually agreed nearby destination.

The practical points emerging from the decision are as follows:

  • For the arrival airport to be regarded as ‘serving the same town, city or region’ as the intended airport it must be in close proximity to that territory. The fact that the arrival airport is not in the same territory (in an administrative sense) as the town, city or region in which the intended airport is situated is not determinative.
  • Where however the passenger arrives at his final destination three hours or more after the scheduled arrival time, he is entitled to fixed compensation. For the purposes of calculating such delay, the Court must take into account the onward journey from the arrival airport to the intended airport or mutually agreed destination.

The question as to whether the arrival airport is sufficiently ‘proximate’ to the intended airport is, of course a factual question which is bound to provoke debate. Whether, for instance, London Heathrow and London Southend (situated some 36 miles from central London) could be described as ‘serving the same town, city or region’ remains to be seen.

About the Author

Called in 2010, Tom Collins is ranked in the Legal 500 as a specialist in Travel Law. He has considerable experience across a wide range of travel and private international law disputes and has advised claimants and defendants in multi-party actions.

 

Missing the Boat: Lambert v Travelsphere and the Package Travel and Linked Travel Arrangements Regulations 2018

Loyal readers will no doubt recall the article on Lambert v Travelsphere [2005] CLY 1977 penned by Alan Saggerson (now HHJ Saggerson) and Sarah Prager when the decision was first made. No? A mere 16 years ago? Really? Well, to bring you up to speed, the claim was heard in the context of the SARS epidemic which took place in Spring 2003. The facts will have a certain familiarity to them…

The Appellant tour operator appealed against a decision that it had not been entitled to charge the Respondent holidaymakers a cancellation fee following their cancellation of a package tour booked in January 2003. The tour was to have begun at the end of April 2003. The package had included flights to Beijing and a tour of China, with the holiday ending with three days’ stay in Hong Kong. In March 2003, as a result of the SARS epidemic, the World Health Organisation had issued warnings to people intending to travel to Hong Kong. On 2nd April, the WHO and the Department of Health had strongly advised people not to travel to Hong Kong. On 8th April the tour operator had written to the holidaymakers informing them that it was rearranging some travel itineraries, but that the visit to Hong Kong at the end of the holiday might still be possible. On 12th April the holidaymakers had cancelled the holiday, but reserved their rights as to the cancellation fee charged under the tour operator’s standard terms. On 23rd April the tour operator had cancelled the holiday and provided other holiday makers with a full refund in accordance with Regulations 12 and 13 of the Package Travel, Package Holidays and Package Tours Regulations 1992, then in force.

Insofar as they are relevant, Regulations 12 and 13 provide:

“In every contract there are implied terms to the effect that—

(a) where the organiser is constrained before the departure to alter significantly an essential term of the contract…he will notify the consumer as quickly as possible in order to enable him to…withdraw from the contract without penalty…

The consumer is entitled—

(c) to have repaid to him as soon as possible all the monies paid by him under the contract.”

The holidaymakers sued, claiming to have been entitled to cancel the holiday without having to pay a fee since the tour operator had been constrained to alter the itinerary before departure. The tour operator argued that its notification had not constituted an alteration because it was still possible that the holidaymakers might have been able to travel to Hong Kong, and its inclusion in the itinerary was not an essential term of the contract.

At first instance the judge held that the tour operator’s notification that it “would or might” alter the itinerary was a significant alteration in one of the essential terms of the holiday contract which it had been constrained to make as a result of the SARS epidemic.

It was held, allowing the appeal, that although as at 8th April 2003 the tour operator was constrained to consider altering the itinerary, it was not constrained actually to alter it. Any uncertainty in the holidaymakers’ minds as to whether or not they would be able to go to Hong Kong was a product of the SARS epidemic and not of the tour operator’s letter. Therefore it had not added any uncertainty as to the itinerary, but was merely notifying them that their itinerary was subject to consideration. Regulation 12 was not engaged, therefore, and the contractual cancellation fees were due. The appeal judge went on to find that a tour operator could not shut its eyes to an obvious danger so as to deny that it was constrained to alter an essential term, but it was permissible for it not to alter the term until there was not ‘a flicker of hope’ that the contract could be performed in accordance with the original term. In order for a tour operator to be held to have been constrained to alter a term, it had to be absolutely inevitable and unavoidable for it to be altered.

Holidays booked on or after 1st July 2018 are governed not by the 1992 Regulations, but by the Package Travel and Linked Travel Arrangements Regulations 2018, which are couched in slightly different terms. The relevant provision, Regulation 11, states as follows (insofar as it is relevant):

“(3) Paragraphs (4) to (11) apply where, before the start of the package, the organiser—

(a) is constrained by circumstances beyond the control of the organiser to alter significantly any of the main characteristics of the travel services…

(4) The organiser must, without undue delay, inform the traveller in a clear, comprehensible and prominent manner on a durable medium, of—

(a) the proposed changes referred to in paragraph (3)…

(5) The traveller may, within a reasonable period specified by the organiser—

(a) accept the proposed changes; or

(b) terminate the contract without paying a termination fee…

(8) Where—

(a) the traveller terminates the contract pursuant to paragraph (5)(b), and (b) the traveller does not accept a substitute package,

the organiser must refund all payments made by or on behalf of the traveller without undue delay and in any event not later than 14 days after the contract is terminated.”

So far, so similar to the provisions with which Lambert v Travelsphere was concerned. It is to be anticipated, therefore, that the decision will continue to be regarded as good law even following the passage of the new Regulations, so long as the court is considering alteration of one of the main characteristics of the travel services.

However, Regulations 12 and 13 of the new Regulations deal with the position where the package travel contract is terminated, and they comprise a different regime:

“(7) … in the event of unavoidable and extraordinary circumstances occurring at the place of destination or its immediate vicinity and which significantly affect—

(a) the performance of the package, or

(b) the carriage of passengers to the destination,

the traveller may terminate the package travel contract before the start of the package without paying any termination fee…

(2) Paragraph (3) applies where…

(b) the organiser is prevented from performing the contract because of unavoidable and extraordinary circumstances and notifies the traveller of the termination of the contract without undue delay before the start of the package.

(3) The organiser—

(a) may terminate the package travel contract and provide the traveller with a full refund of any payments made for the package;

(b) is not liable for additional compensation.”

So it appears that where the tour operator is constrained to alter an itinerary or make some similar alteration in a holiday the ‘flicker of hope’ test applies, and a cancellation fee may be payable on the part of the traveller if he or she cancels precipitately; but where the entire contract has to be terminated, the test may or may not be the same. That is to say, where a holidaymaker believes that the holiday contract is likely to be significantly affected due to the effects of the pandemic at the destination, it may be that he or she can cancel without fee even where a flicker or hope that the pandemic may ease remains. However, because the Great Refund Saga is at a relatively early stage, there is no authority on the subject and it may be that the decision in Lambert v Travelsphere can be read over into Regulations 12 and 13.

One thing is certain: the decision will be revisited and reconsidered in the context of the new Regulations, and sooner rather than later.

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 was recently named Best Lawyers’ Travel Lawyer of the Year 2020/2021 and the Lawyer Monthly Women in Law Awards 2020: Personal Injury.

 

…And Finally…

We were intrigued to read the recent Reasoned Report into the updated Baremo tables governing Spanish damages awards for personal injury. In summary, the Report concludes that even the updated tables do not do justice to injured litigants, and ought to be amended accordingly. More of that in a separate Special Briefing. The Report’s concern with compensating Claimants adequately contrasts sharply with the trend in the UK and the Republic of Ireland towards reducing general damages; the controversial Whiplash Reforms here, and the new Personal Injuries Guidelines brought into force in Ireland from 24th April by way of the Judicial Council Act 2019 (Commencement) Order 2021, both seek to achieve consistency and a reduction in costs at the expense of what the Spanish would refer to as restitutio in integrum. But we at 1CL foresee all sorts of unforeseen consequences in both jurisdictions, not the least of which will be arguments in respect of the transitional arrangements, which in both instances are as unstraightforward as we have come to expect from reforms of this nature.

Written by or involving: Sarah Prager, Andrew Spencer, Tom Collins

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