Last week’s decision by the UK’s Supreme Court to refuse further appeals by Emirates against a ruling that found it liable for passenger delay compensation under EU Regulation 261/2004 will allow hundreds of similar claims against non-EU airlines to proceed in the English courts, but lawyers are divided on whether this will result in a net benefit for travellers.

The Supreme Court issued its order denying Emirates the right to challenge the Court of Appeal’s October 2017 decision on 15 March, saying the airline had failed to raise an arguable point of law to rebut the application of Regulation 261 on delayed flights to carriers from outside the EU, including for journeys with multiple legs.

The Court of Appeal’s ruling in the joined cases of Gahan v Emirates and Buckley v Emirates itself upheld an earlier decision by the Liverpool County Court, which found that passengers flying from the EU to a non-European destination via a non-European connecting hub were due compensation for a delay of more than three or more hours to their overall journey. This was true even if delays on the European leg fell below the ordinary three-hour threshold but led to missed connections.

The Liverpool court said the wording of the regulations and subsequent interpretative case law clearly stated that delays were quantifiable based on a passenger’s time of arrival at their final destination, irrespective of whether that journey was broken into two separate legs.

Following the Supreme Court’s affirmation, Emirates will be expected to compensate passengers whose flights from Manchester to Dubai were delayed leading to missed connections to destinations in Asia. If it doesn’t pay, the UK Civil Aviation Authority (CAA) has confirmed that it will bring an enforcement action, including demands that Emirates amend its current policies regarding connecting flights that originally depart from EU member states.

Mark Walker of compensation firm Hughes Walker Solicitors in Manchester, who acted for the passengers in the appeal, said the order “should enable many hundreds of cases stayed in the County Court to be concluded.” He added that the threat of CAA enforcement would lead several airlines to “fall in line and accept their liability to pay compensation for missed connections.”

Partners Sue Barham and Giles Kavanagh at Holman Fenwick Willan in London agreed that the order would clear the way for a large number of outstanding missed connections claims, which had been on hold since before the Court of Appeal’s decision last year, to revive and be dealt with. However, they said that beyond this there was not likely to be a large increase in overall claims activity off the back of the Supreme Court order.

“Passengers were already bringing missed connections claims against airlines prior to the Court of Appeal judgment and that can be expected to continue at a similar rate,” they told ALN. “The difference is that there is now a final position on the issue in the English courts”.  Similarly, they said there was unlikely to be a surge in CAA enforcement actions following the order, as most airlines had already accepted the findings of the Court of Appeal and were not reluctant to “deal with claims in accordance with what is now settled case law”.

Joanna Kolatsis, head of aviation and travel at Hill Dickinson in London, and associate Lucy Schofield note that a number of non-EU carriers – including Etihad, American Airlines, Singapore Airlines and Turkish Airlines – had all previously been investigated by the CAA and already have policies in place to pay compensation to passengers on directly connecting flights. “Third country operators currently not compensating for delays such as this will need to give consideration to their internal policies to avoid the risk of separate enforcement action,” they note.

One area where the Court of Appeal ruling was “unsatisfactory”, Barham and Kavanagh said, was that it left some uncertainty as to the extent of airlines’ liability in journeys that are operated by two or more different airlines: “it is possible there will be future cases that explore those remaining grey areas”. Airlines, while reviewing any cases that had been stayed in the courts pending the Supreme Court’s decision, will likely wish to analyse these grey areas and take a view as to “whether there are potential defences available in any circumstances, such as delays on multi-sector journeys involving more than one carrier,” they said.

"Other than opening the floodgates for passenger claims in respect of connecting flights operated by non-Community carriers, the Gahan decision may have some unexpected consequences for consumers,” according to Stephenson Harwood’s Chloe Challinor.

She points out that the typical cost of paying compensation for connecting flights – around €600 per passenger – could lead airlines to raise their fares on journeys where the first flight departs from an EU airport.

“The decision may also have an adverse effect on interlining arrangements,” she told ALN. “Quite understandably, an airline operating short-haul feeder flights from the EU that connect with the network of a long-haul airline may not be prepared to pay compensation of €600 per passenger in respect of minor delays that mean that the passenger misses an onward connection”.

If airlines become less willing to interline, that could have a negative effect on passenger choice and competition between airlines, Challinor said. “As such, the Gahan decision may not prove to be the triumph for passengers that at first it may appear.”

Alan Polivnick of Watson Farley & Williams in Bangkok disagreed. "Although airlines may be tempted to increase fares to offset these costs and reduce their interlining arrangements, competitive market pressures and commercial objectives are likely to restrain fare increases," he said.

"If the Gahan appeal results in more expensive tickets or reduced options and choices for consumers, it will be an ironic outcome for regulations which were introduced to protect consumers and provide them with a relatively straightforward and user friendly means of obtaining compensation for the inconvenience of delayed or cancelled flights," he added.

In the Supreme Court of the United Kingdom

Emirates v Gahan and others

  • Lady Justice Hale (President)
  • Lord Justice Hodge
  • Lord Justice Lloyd-Jones

In the England & Wales Court of Appeal

Gahan v Emirates, Buckley v Emirates

  • Lady Justice Arden
  • Lord Justice Lewison
  • Lord Justice McCombe

Counsel to claimants

  • 23 Essex Street Chambers

Brad Pomfret

  • Hughes Walker Solicitors

Partner Mark Walker in Bury

Counsel to Emirates

  • Quadrant Chambers

Tim Marland

  • DLA Piper

Partner Kathryn Ward in London

Counsel to UK Civil Aviation Authority (as an intervenor)

  • Gough Square Chambers

Iain MacDonald and Anna Medvinskaia

Counsel to International Aviation Transport Association (as an intervenor)

  • Clyde & Co

Partner Rob Lawson in London