Graham & Anor v Thomas Cook Group

A passenger cannot claim damages merely because an air carrier breached Article 8 of Regulation EC No. 261/2004. Article 12 preserves compensation rights arising from another source, such as the contract of carriage or the Montreal Convention, but it does not create a damages action for additional loss caused by breach of Article 8.

For a simple contract of carriage, damages for distress and disappointment are unavailable except in rare cases such as a holiday contract. Third-party losses outside the parties’ reasonable contemplation are too remote. Exemplary or punitive damages are also unavailable. The appeal was dismissed, and the Montreal Convention issue was left undecided.

Ms Graham’s flight from Manchester to Jamaica was cancelled after volcanic ash closed UK airspace. She sought rerouting under Article 8 of Regulation EC No. 261/2004 and damages for distress, wasted expenditure and exemplary damages. She was later rebooked, so the rerouting claim became irrelevant.

The District Judge struck out the claim. HHJ Hampton dismissed the appeal, holding that the Montreal Convention applied and, alternatively, that the Regulation created no private damages action. The Court of Appeal heard a second appeal concerning the availability of damages for breach of Article 8, possible contractual remedies, and the application of the Montreal Convention.

Appeal dismissed. Toulson LJ gave the judgment, with Jacob and Laws LJJ agreeing.

1. Procedural issue. The court could consider whether breach of Article 8 gave rise to a damages action, even though the point had not been argued on the earlier appeal. A court may strike out a hopeless claim on its own initiative, provided the claimant has a fair opportunity to address the issue. That opportunity had been provided.
2. Effect of the domestic enforcement scheme. The Civil Aviation (Denied Boarding, Compensation and Assistance) Regulations 2005 made breach of specified obligations a criminal offence and designated the Civil Aviation Authority as the enforcement body. Civil enforcement powers were conferred by sections 212 to 214 of the Enterprise Act 2002. The domestic scheme did not impose a statutory duty actionable in damages, although it did not remove any independent contractual or other cause of action.
3. Article 12. Article 12 preserved rights to compensation from sources outside the Regulation, including contract, the Montreal Convention or national law. Following and applying Sousa Rodriguez v Air France SA [2012] 1 EMLR 40, it did not provide a legal basis for damages for additional loss caused by failure to comply with Article 8. The remedies for that breach were those specified in Article 8.
4. Contractual and other damages. The possible contractual claim was considered on its merits. This was a simple contract of carriage, not a contract to provide a holiday. Damages for distress, disappointment and inconvenience were therefore unavailable. Such damages arise only exceptionally, as with a holiday contract. Exemplary or punitive damages had no arguable basis, whether for breach of Article 8 or breach of the carriage contract.
5. The alleged third-party expenditure was outside the reasonable contemplation of the parties and too remote to be recoverable, even if supported by credible evidence.
6. The court did not decide whether the Montreal Convention applied to cancellation, because that issue was unnecessary to the result. It declined to give wider guidance on a potentially uncertain issue when only one party was legally represented.

1. Court of Appeal (Civil Division) — [2012] EWCA Civ 1355: dismissed the second appeal and upheld the striking-out decision.
2. Leicester County Court, HHJ Hampton — 19 September 2011: dismissed the appeal from the District Judge and held that the Montreal Convention applied; alternatively, the Regulation created no private damages action.
3. Leicester County Court, District Judge Merriman — 21 June 2011: struck out the claim, holding that the damages claims were unsustainable.
4. Leicester County Court, Deputy District Judge Wylie — 20 April 2011: dismissed the claimant’s summary judgment application, save for determining that the carrier had no real prospect of defending the alleged breach of Regulation 261.