Thursday, 17 September 2015

Compensation due by most technical defects - CJEU in van der Lans (C-257/14)

17 September 2015: CJEU judgment in case van der Lans (C-257/14)

Generally, airlines tend to perceive technical defects in air planes as extraordinary circumstances, which, pursuant to Regulation No 261/2004, release them from the obligation to pay compensation to air passengers whose flight has been delayed or cancelled as a result of such a defect. This practice continues despite the CJEU's judgment in case Wallentin-Hermann (C-549/07), where while the Court admitted that a technical defect could constitute an extraordinary circumstance that would only be possible if the defect could not have been prevented by regular maintenance, due diligence etc. or, more specifically, where it is: "not inherent in the normal exercise of the activity of the air carrier concerned and is beyond the actual control of that carrier on account of its nature or origin".

In the given case the flight of Ms van der Lans has been delayed for 29 hours due to a combination of two unexpected technical defects in the aircraft for which spare parts had to be flown over. KLM claimed that these defects affected engine parts that did not exceed their average lifetime and about which the manufacturer did not warn that could cause particular problems with certain use (para 39). The problems were thus not caused by either poor maintenance or lack of regular controls, which is how the airlines till now perceive a technical defect for which they would have to pay compensation to passengers. While the Court admits that such a technical defect could occur unexpectedly, it perceives it as a defect intrinsically connected to the airline's operating business (para 41). When could a technical defect then be seen as an extraordinary circumstance? "where it was revealed by the manufacturer of the aircraft comprising the fleet of the air carrier concerned, or by a competent authority, that those aircraft, although already in service, are affected by a hidden manufacturing defect which impinges on flight safety. The same would hold for damage to aircraft caused by acts of sabotage or terrorism" (para 38). It should then either not be limited to one aircraft (defect in a whole series of manufactured goods) or be completely out of the airline's control (terrorism). "Premature malfunction of certain components of an aircraft" (para 41) does not count as such as "air carriers are confronted as a matter of course with unexpected technical problems" (para 42). Repairing of such defects falls within the normal activity of air carriers and remains within their sphere of control. Airlines are also not allowed to refuse payment of compensation, believing that it's the manufacturer to blame. They may, however, redress their claims on the manufacturer.

This judgment significantly limits the options for the airlines to deny compensation to passengers of delayed or cancelled flights since most technical defects should fall under this category. So far, however, airlines managed to creatively interpret previous judgments and continue to ignore passenger rights. What impact this judgment may have will also depend on when the new Regulation will finally be adopted and what rules with regard to technical defects it will provide.