Lipton and another v BA Cityflyer Ltd

An air carrier cannot rely on the defence of extraordinary circumstances where a flight is cancelled because an essential crew member unexpectedly becomes ill. Staff illness and the management of resulting absence are inherent in the carrier’s normal activity. The inquiry should not turn on when, why or how the illness arose.

A cause of action accruing under a directly applicable EU regulation before the end of the implementation period is governed by the version applicable when the material events occurred. The majority considered that such accrued claims became retained EU law through section 3 of the European Union (Withdrawal) Act 2018. Consequently, pre-completion CJEU authority governs subject to the statutory power to depart, while later CJEU decisions are persuasive rather than binding.

The respondents’ flight from Milan to London was cancelled shortly before departure because its captain reported that he was unwell and no replacement was available. They claimed €250 under Regulation (EC) 261/2004. The airline relied on the defence in article 5(3) for cancellations caused by extraordinary circumstances.

The County Court dismissed the claim and a Circuit Judge dismissed the respondents’ first appeal. The Court of Appeal allowed their further appeal in [2021] EWCA Civ 454, holding that the captain’s illness was not an extraordinary circumstance. It also held that the post-implementation-period amended version of the Regulation governed the claim.

The Supreme Court considered whether unexpected crew illness was an extraordinary circumstance and which legal regime governed a cause of action that had accrued before the end of the Brexit implementation period.

1. Disposition. The appeal was dismissed unanimously. Lord Sales and Lady Rose, with whom Lady Simler agreed, gave the principal judgment. Lord Burrows agreed. Lord Lloyd-Jones agreed on the disposition and the extraordinary-circumstances issue but differed on the juridical basis for preserving the accrued claim.
2. Article 5(3) of Regulation 261 must be interpreted strictly because it derogates from passenger compensation rights. The established test asks whether the causative event was inherent in the normal exercise of the carrier’s activity and whether it was beyond the carrier’s actual control. Inherency is the principal inquiry. Individual factual analogies are less useful than the principles and broad patterns established by the authorities.
3. Unexpected illness of an essential crew member is inherent in an air carrier’s normal activity. Managing staff absence forms part of crew planning and ordinary business operations. It is immaterial that the captain became ill before going on duty or that the illness was unrelated to his work. Courts should not undertake granular inquiries into when, why or how illness arose. Cityflyer therefore failed to establish extraordinary circumstances.
4. The post-implementation-period amendments to Regulation 261 did not govern this accrued claim. The applicable substantive text was the EU text in force when the flight was cancelled. Applying later amendments would offend the rule-of-law principle that material events are ordinarily governed by the law then in force.
5. On the majority’s analysis, expressed to be strictly obiter because it did not affect the result, sections 2 to 4 of the European Union (Withdrawal) Act 2018 form a complete code. Section 3 preserved both direct EU legislation and causes of action already accrued under it. Such claims became retained EU law. Section 6 therefore governs the effect of CJEU authority: post-completion decisions are not binding but may be considered, while designated senior courts may depart from retained EU case law under the statutory test.
6. The post-completion decision in TAP Portugal was persuasive because it fitted the settled pre-completion jurisprudence. The same result followed independently from the earlier authorities.
7. Lord Lloyd-Jones considered, obiter, that section 16(1) of the Interpretation Act 1978 instead preserved the claim as an accrued EU-law right. This disagreement did not affect the governing text, the failure of the defence or the dismissal of the appeal.

1. United Kingdom Supreme Court: Dismissed Cityflyer’s appeal from [2021] EWCA Civ 454 . It upheld the conclusion that pilot illness was not an extraordinary circumstance, while correcting the Court of Appeal’s analysis of the governing version of Regulation 261.
2. Court of Appeal: In [2021] EWCA Civ 454 ; [2021] 1 WLR 2545, allowed the passengers’ appeal and held that the captain’s illness was not an extraordinary circumstance. It treated the domestically amended Regulation as the governing law.
3. County Court at Winchester: Dismissed the passengers’ appeal on 11 February 2020, holding that the captain’s absence resulted from circumstances external to the airline and satisfied the extraordinary-circumstances defence.
4. County Court at Portsmouth: Dismissed the claim on 28 June 2019 on the basis that article 5(3) of Regulation 261 was satisfied.