Lipton and another v BA Cityflyer Ltd

The Supreme Court rejected the airline's appeal and held that the sudden illness of the captain did not amount to "extraordinary circumstances" within article 5(3) of Regulation (EC) 261/2004, so the respondents remained entitled to compensation for the cancelled flight. The court analysed the settled CJEU test (as stated in Wallentin-Hermann) requiring that an event be not inherent in the normal exercise of the carrier’s activity and beyond the carrier’s actual control; the illness of a crew member was held to be inherent in crew planning and ordinary operations. The court also addressed, at length, the effect of Brexit on pre‑Brexit accrued EU causes of action and concluded (on the majority view) that accrued causes of action under directly applicable EU instruments form part of "retained EU law" under the European Union (Withdrawal) Act 2018 so that section 6 of that Act governs the court's treatment of CJEU case law.

Background and facts:

• Mr and Mrs Lipton were booked on a Cityflyer flight from Milan Linate to London City scheduled to depart 30 January 2018; the flight was cancelled when the captain reported he was unwell shortly before duty and no replacement could be found. The passengers were rebooked and arrived about 2 hours 36 minutes late; they claimed compensation under Regulation (EC) 261/2004. Cityflyer relied on article 5(3)'s defence of "extraordinary circumstances" and refused to pay.

Procedural posture:

• The claim was dismissed at first instance (County Court, 28 June 2019) and dismissed on the first appeal (11 February 2020). The Court of Appeal ([2021] EWCA Civ 454) allowed the Liptons' appeal. The airline appealed to the Supreme Court.

Issues considered by the Supreme Court:

1. Ground 1: The meaning and scope of "extraordinary circumstances" in article 5(3) of Regulation 261 and whether pilot illness falls within that defence.
2. Ground 2: What law applies to pre‑Brexit accrued causes of action — in particular whether accrued rights under directly applicable EU instruments were carried forward as "retained EU law" by the European Union (Withdrawal) Act 2018 (the "Complete Code" or "retained EU law" analysis) or preserved by general saving rules (the Interpretation Act 1978) and so sit outside the retained EU law regime.

Court's reasoning in summary:

• On Ground 1 the court applied the CJEU framework (Wallentin‑Hermann and subsequent authorities). The principal inquiry is whether the cause of cancellation is "inherent in the normal exercise" of the carrier’s activity. The sudden illness of a captain was found to be part of the normal operational risks that an airline must manage (crew planning, rest and fitness rules, off‑duty periods, foreseeable sickness), not an "extraordinary" or external event of the kind addressed by the recital list. The court emphasised reasons of practicality and the consumer‑protection purpose of the Regulation which militate against granular enquiries into when or how a crew member first became unwell. The CJEU decision in TAP Portugal (post‑IP completion day) was regarded as persuasive and aligned with pre‑Brexit jurisprudence.
• On Ground 2 the majority held that the Withdrawal Act was intended as a comprehensive code bringing forward direct EU legislation and accrued causes of action into retained EU law (sections 2–4 and definition in section 6(7)), so that section 6 governs the effect of pre‑ and post‑IP completion day CJEU case law. The court preferred this "Complete Code/retained EU law" analysis to the Interpretation Act analysis because it better fits the statute as a whole and avoids practical difficulties about the role of section 6. Lord Lloyd‑Jones dissented on this narrow point, taking the view that accrued EU rights remained rights under EU law preserved by the Interpretation Act 1978 and not converted into a separate body of retained domestic law; he considered the general non‑retroactivity rule in section 16 of the Interpretation Act determinative.

Outcome:

• The appeal by BA Cityflyer Ltd was dismissed; the Court of Appeal's decision in favour of the Liptons stands.

The appeal is dismissed. The Supreme Court held that (1) the sudden illness of the captain was not an "extraordinary circumstance" under article 5(3) of Regulation (EC) 261/2004 because crew illness is inherent in an air carrier’s ordinary operations and within the carrier’s operational responsibility; and (2) on the majority view pre‑Brexit accrued causes of action under directly applicable EU instruments are carried forward as "retained EU law" by the European Union (Withdrawal) Act 2018 so that section 6 governs the treatment of CJEU case law (the Interpretation Act point was taken but was not outcome‑determinative).

County Court at Portsmouth, Deputy District Judge Printer, claim dismissed (28 June 2019); appeal to County Court at Winchester, His Honour Judge Iain Hughes QC, appeal dismissed (11 February 2020); Court of Appeal, [2021] EWCA Civ 454 (Green LJ, Coulson LJ), Lipton allowed; appeal to Supreme Court, [2024] UKSC 24, appeal dismissed.