Joined Cases C‑581/10 and C‑629/10

Emeka Nelson and Others

v

Deutsche Lufthansa AG
and
TUI Travel plc and Others
v
Civil Aviation Authority

(References for a preliminary ruling from the Amtsgericht Köln (Germany) and the High Court of Justice (England & Wales), Queen’s Bench Division (Administrative Court))

(Air transport – Regulation (EC) No 261/2004 – Articles 5 to 7 – Montreal Convention – Articles 19 and 29 – Right to compensation in the event of delay of flights – Compatibility)

Summary — Judgment of the Court (Grand Chamber), 23 October 2012

1.        Transport — Air transport — Regulation No 261/2004 — Common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights — Right to compensation in the event of cancellation of flights — Whether applicable in the event of long delay — Principle of equal treatment

(European Parliament and Council Regulation No 261/2004, Recital 3 and Arts 5, 6 and 7)

2.        Transport — Air transport — Regulation No 261/2004 — Common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights — Right to compensation in the event of delay — Conditions

(European Parliament and Council Regulation No 261/2004, Arts 5 to 7)

3.        Transport — Air transport — Regulation No 261/2004 — Common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights — Right to compensation in the event of delay —Whether or not compatible with the Convention for the Unification of Certain Rules for International Carriage by Air — Compatible

(European Parliament and Council Regulation No 261/2004, Arts 5 to 7; 1999 Montreal Convention, Arts 19, 22 and 29)

4.        Transport — Air transport — Regulation No 261/2004 — Common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights — Right to compensation in the event of delay — Breach of the principle of legal certainty — None — Breach of principle of proportionality — None

(European Parliament and Council Regulation No 261/2004, Arts 5 to 7)

5.        Questions referred for a preliminary ruling — Interpretation — Temporal effects of judgments by way of interpretation — Retroactive effect — Limitation by the Court — Legal certainty — Discretion of the Court

(Art. 267 TFEU)

1.        See the text of the decision.

(see paras 30-38)

2.        Articles 5, 6 and 7 of Regulation No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, must be interpreted as meaning that passengers whose flights are delayed are entitled to compensation under that regulation where they suffer, on account of such flights, a loss of time equal to or in excess of three hours, that is, where they reach their final destination three hours or more after the arrival time originally scheduled by the air carrier. Such a delay does not, however, entitle passengers to compensation if the air carrier can prove that the long delay is caused by extraordinary circumstances which could not have been avoided even if all reasonable measures had been taken, namely circumstances beyond the actual control of the air carrier.

(see para. 40, operative part 1)

3.        It does not follow from Articles 19, 22 and 29 of the Montreal Convention for the Unification of Certain Rules for International Carriage by Air, or from any other provision thereof, that the authors of that convention intended to shield air carriers from any form of intervention other than those laid down by those provisions, in particular action which could be envisaged by the public authorities to redress, in a standardised and immediate manner, the damage that is constituted by the inconvenience that delay in the carriage of passengers by air causes, without the passengers having to suffer the inconvenience inherent in the bringing of actions for damages before the courts.

The compensation measure laid down in Article 7 of Regulation No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights falls outside the scope of the Montreal Convention. The loss of time inherent in a long flight delay constituting an inconvenience within the meaning of Regulation No 261/2004 cannot be categorised as ‘damage occasioned by delay’ within the meaning of Article 19 of the Montreal Convention, and therefore falls outside the scope of Article 29 of that convention. Furthermore, a loss of time is suffered identically by all passengers whose flights are delayed and, consequently, it is possible to redress that loss by means of a standardised measure, without having to carry out any assessment of the individual situation of each passenger concerned. Thus, such a measure may be applied immediately. In addition, there is not necessarily a causal link between, on the one hand, the actual delay and, on the other, the loss of time considered relevant for the purpose of giving rise to a right to compensation under Regulation No 261/2004 or calculating the amount of that compensation. Consequently, the obligation under Regulation No 261/2004 intended to compensate passengers whose flights are subject to a long delay is compatible with Article 29 of the Montreal Convention and is additional to that article, inasmuch as it operates at an earlier stage than the system laid down in Article 29.

(see paras 46-49, 52, 53, 55-57)

4.        As regards the clarity of the obligations imposed on air carriers by Regulation No 261/2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, the principle of legal certainty requires that individuals should be able to ascertain unequivocally what their rights and obligations are and take steps accordingly. However, having regard to the principle of equal treatment, air carriers cannot claim that the obligation to compensate passengers imposed on them by Regulation No 261/2004 in the event of delay infringes the latter principle. Both air passengers whose flights were delayed and air carriers are able to know unequivocally the point from which those passengers may claim payment of compensation and the carriers will be required to pay that compensation, respectively, since the introduction of a clear time-limit also serves to prevent national courts from making different assessments of what constitutes a long delay which would, in some cases, give rise to legal uncertainty.

In addition, the obligation to compensate the damage caused to passengers of a delayed flight does not fail to observe the principle of proportionality. The importance of the objective of consumer protection, which includes the protection of air passengers, may justify even substantial negative economic consequences for certain economic operators. Besides, given that the loss of time suffered is irreversible, objective and easily quantifiable, the measure granting all the passengers affected by that inconvenience immediate fixed pecuniary compensation is particularly appropriate. Furthermore, the obligation to pay compensation concerns only long delays and the amount of compensation may be reduced by 50% where the delay is less than four hours. Lastly, compensation is not payable if an air carrier can prove that the cancellation or long delay was caused by extraordinary circumstances, which are beyond that carrier’s actual control. In addition, the latter may seek compensation from any person who caused the delay, including third parties.

(see paras 66-68, 75, 77-81)

5.        It is only exceptionally that the Court may, in application of the general principle of legal certainty inherent in the EU legal order, be moved to restrict for any person concerned the right to rely upon a provision which it has interpreted with a view to calling in question legal relationships established in good faith. In that context, it is, however, for the Court to determine a single point from which the interpretation which it has given to a provision of EU law is to take effect. In that connection, restricting the temporal effects of such an interpretation may be allowed only in the actual judgment ruling upon the interpretation requested. That principle guarantees the equal treatment of the Member States and of other persons subject to EU law, under that law, fulfilling, at the same time, the requirements arising from the principle of legal certainty. When the interpretation given by the Court corresponds to that given in an earlier judgment in which temporal effects were not restricted, there is no need to grant an application for temporal effects to be restricted in the context of the subsequent judgment.

(see paras 89-91, 93, 94)