On 10 July 2024, the UK Supreme Court handed down its highly anticipated judgment having considered whether passengers are entitled to compensation when pilot illness has resulted in a flight cancellation. The key question was whether the pilot's illness qualified as an "extraordinary circumstance" such as to provide the air carrier with a defence against claims for passenger compensation. The Court ruled in favour of the passengers. It held that the pilot's illness is inherent to the operations of an air carrier and cannot be considered "extraordinary". Air carriers are therefore expected to properly manage their crew planning and pay compensation to passengers where flight cancellations occur as a result of crew illness. As noted by the Supreme Court, “although the sum at stake is small, the decision has the potential to affect tens of thousands of claims which are made annually”.
What are the facts of the case?
On 30 January 2018, the Liptons were booked on a flight from Milan to London City Airport operated by BA Cityflyer Limited ("Cityflyer"). The flight was scheduled to leave Milan at 17:05 local time and arrive in London at 18:05 local time. An hour before take-off, the pilot reported feeling unwell and was declared unfit to fly. As there was no replacement pilot available in time, the flight was cancelled and the Liptons were booked onto another flight that arrived roughly 2 ½ hours after their scheduled arrival time. The Liptons subsequently made a claim for €250 worth of compensation. This claim has since been examined at every level of the Courts system.
The Road to the Supreme Court's Decision
The Liptons claimed €250 as compensation for their cancelled flight under the European Union ("EU") regulation (EC) No 261/2004 ("Reg 261"). Cityflyer contested their claim on the basis that Article 5(3) of Reg 261 provided a defence against any obligation to pay where the flight cancellation is caused by "extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken". A central issue was whether the pilot's illness could be considered an "extraordinary circumstance".
The Court determined this by considering if the circumstances were (a) inherent in the normal exercise of the air carrier's activity; and (b) within the carrier's control. Certain events, such as the mechanical wear and tear of an aircraft for example, would be deemed part of the air carrier's regular activities and would not be extraordinary. To consider whether the pilot's illness was extraordinary, Cityflyer argued that a further investigation into when, how and why the pilot became ill is required. It pleaded that a critical factor was that the pilot became ill while off duty; thereby making it an extraordinary circumstance that was beyond the control of the air carrier. In Cityflyer's opinion, the case would be different if it were circumstances at work that led to the said illness. The Court accepted Cityflyer's arguments at first instance and on the first Appeal.
However, the Court of Appeal decided in favour of the Liptons and overturned the earlier decision. It held that the details of precisely when, why and how the captain became ill were too granular and irrelevant to the Article 5(3) issue. Further, where the term "extraordinary circumstance" is given its ordinary meaning, the pilot's illness cannot be considered as extraordinary. On the contrary, staff absence is a mundane part of any business and preparations for the same should be made in advance. As concisely stated by Lord Justice Coulson, "the consumer's right to compensation under the Regulation cannot depend on when and where the member of staff ate the suspect prawn sandwich".
The Court also considered the spirit of the Community rules in the protection of consumer rights. It held that any derogation from said protection must be interpreted strictly and the regulation should be examined from the passenger's perspective, not the air carrier's perspective.
The Supreme Court's Decision
Following Cityflyer's appeal, the Supreme Court has provided finality on this issue in its judgment:
a) Ground 1 – Does the pilot's illness count as an extraordinary circumstance?
The Supreme Court agreed with the Court of Appeal and held in favour of the Liptons. Significantly, it also endorsed the CJEU's position in TAP Portugal v Flightright GmbH (Joined Cases C-156/22 to C-158/22) [2023] Bus LR 875 (“TAP Portugal”), a post-Brexit EU decision that UK courts regard as persuasive in nature (and not binding). In TAP Portugal, a flight was cancelled last minute after the entire crew declared itself unfit to fly following the sudden death of the co-pilot. The UK Supreme Court in Lipton v BA Cityflyer agreed that this was not an extraordinary circumstance as the "management of unexpected absence of staff, due to illness or death… was intrinsically linked to the question of crew planning and staff working hours and was therefore something that was inherent in the carrier's activities." The implications of this endorsement are discussed further below.
b) Ground 2 – Did Brexit have an effect on the Lipton's right to compensation under Reg 261 which accrued while the UK was still a part of the EU?
Between the cancelled flight that occurred in 2018 and the hearing before the Court of Appeal in 2021, the UK left the EU. The Liptons brought the claim under Reg 261 that was in force at the time of the cancelled flight. However, post-Brexit the protections afforded by Reg 261 were retained in identical form as Assimilated Regulation (EU) No. 261/2004 ("UK 261"), further to the Air Passenger Rights and Air Travel Organisers' Licensing (Amendment) (EU Exit) Regulations 2019/278.
The Supreme Court held that the Court of Appeal was wrong to apply the assimilated version UK 261 to the facts of the case as that was not the law in force at the time the cause of action arose. The correct approach was to apply the unamended version of Reg 261. It also held that the UK Courts are not bound by post-Brexit EU case law, and that the Supreme Court and other designated courts are able to depart from retained EU case law under certain circumstances. This interpretation aligns with the legal and political imperatives to create a clear distinction between UK and EU law.
Future Implications
The key significance of this case is the potential expansion of consumer rights under Reg 261 and UK 261. Cancellations and delays caused by pilot or staff illness are no longer likely to be considered extraordinary as they have now been held to be inherent to an air carrier's activities. The current expectation is for air carriers to properly manage their crew planning to accommodate unexpected staff absences.
The endorsement of the opinion in the post-Brexit EU case of TAP Portugal shows that the Court may be willing to extend this principle further in the case of sudden death and/ or absence of the entire crew. In considering TAP Portugal, the Court held that the staff absence, not the medical cause behind the absence, is what constitutes an inherent activity of the carrier. This backing also illustrates that the emerging post-Brexit case law is still persuasive (although not binding) to the UK Courts. Although this case is an interpretation of (unamended) Reg 261, UK 261 is identical in nature. The Lipton v BA Cityflyer decision is therefore likely a further step towards expanding consumer rights, with concerning implications for air carriers for what is an uninsurable loss.
