Lipton & Anor v BA City Flyer Ltd

An air carrier cannot avoid liability for cancellation compensation merely because a necessary member of staff became ill while off duty. Staff illness and the need to provide for resulting non-attendance are inherent in the normal operation of an airline. They are therefore not extraordinary circumstances under Article 5(3) of Regulation (EC) No 261/2004.

The exception must be construed strictly and from the passenger’s perspective. Courts should not investigate precisely when, where, why or how the illness arose. The Regulation establishes modest, standardised compensation and generally requires claims to be resolved summarily and inexpensively.

The appellants’ flight from Milan to London was cancelled after its captain reported sick while off duty. No replacement captain was available. The Deputy District Judge held that the illness arose from an external event unrelated to work and constituted extraordinary circumstances under Article 5(3) of Regulation (EC) No 261/2004. HHJ Iain Hughes QC dismissed the passengers’ first appeal.

The passengers appealed again. The principal issue was whether a crew member’s illness, particularly illness arising off duty, was inherent in the normal exercise of an air carrier’s activity. The court also considered the Regulation’s status and interpretation following the United Kingdom’s departure from the European Union.

1. Appeal allowed. The captain’s non-attendance through illness was inherent in the respondent’s activity and operations as an air carrier. It was not an extraordinary circumstance within Article 5(3) of Regulation (EC) No 261/2004. The respondent was ordered to compensate the appellants.

2. Article 5(3) is a derogation from a consumer-protection measure and must be construed strictly. Under the approach in Wallentin-Hermann and Jet2.com Ltd v Huzar, the extraordinary-circumstances inquiry has the related limbs of inherency and actual control. Inherency is the crucial question; the control limb helps identify the limits of what is inherent in the carrier’s normal activity.

3. Staff illness is an ordinary incident of commercial life. An airline necessarily depends upon its personnel and must make provision for predictable non-attendance. Illness is analogous to mechanical wear and tear: both human and mechanical resources form part of the carrier’s operating system. The conclusion does not change because the employee became ill before commencing duty. Off-duty obligations and events affecting fitness for work remain connected with airline operations.

4. An event does not become extraordinary merely because it is external to the carrier. Conversely, rare external events may satisfy the inherency test. Frequency is not determinative, but it can indicate whether an event is out of the ordinary. The ordinary and recurrent risk of staff illness was materially different from runway debris, petrol spillage, severe passenger misconduct or unusual weather.

5. The Regulation does not require a granular investigation into when, where, why or how a crew member became ill. Such inquiries would be difficult, frequently unsupported by available medical evidence and inconsistent with modest, standardised compensation claims that should ordinarily be decided inexpensively and, where possible, on the papers.

6. Per Green LJ, Regulation (EC) No 261/2004, as amended domestically, remained part of domestic law under the European Union (Withdrawal) Act 2018. Pre-completion CJEU authority remained relevant under the retained-law regime. Although the Court of Appeal could depart from retained CJEU case law by applying the Supreme Court’s departure test, there was no reason to do so.

7. Section 29 of the European Union (Future Relationship) Act 2020 automatically modifies existing domestic law only so far as necessary to implement the Trade and Cooperation Agreement. The existing passenger-compensation regime already implemented its consumer-protection requirements when construed purposively. Coulson LJ’s conclusions also secured efficient and summary complaint handling. Haddon-Cave LJ agreed with both judgments.

1. Court of Appeal (Civil Division): The court allowed the appeal and ordered the air carrier to compensate the appellants under Regulation (EC) No 261/2004.
2. Portsmouth Combined Court, Circuit Judge: HHJ Iain Hughes QC dismissed the passengers’ appeal on 11 February 2020. He upheld the conclusion that the cause of the captain’s illness made the circumstances extraordinary.
3. Portsmouth Combined Court, Deputy District Judge: DDJ Printer dismissed the compensation claim on 26 June 2019. He found that the off-duty illness arose from an external event outside the airline’s control.