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ECJ ruling on flight delays: Consumer champion warns against third-party claim firms

European Court of Justice rules on airline delay compensation

For details on how to claim What to do when your flight is delayed

Decision in favour of passengers follows last year’s similar ruling by the Supreme Court

The European Court of Justice (ECJ) this morning ruled that airline passengers can claim compensation for delays caused by technical faults. You could be forgiven for thinking that this rule has already been passed last year. It was in fact the Supreme Court in the UK.

In October 2014 the Supreme Court ruled that consumers had 6 years to claim compensation for delays and upheld the ruling regarding that technical difficulties are not “extraordinary circumstances” for the purposes of a compensation claim [1]. The Dutch airline KLM had tried to argue that spontaneous technical issues are “extraordinary circumstances” and many cases have been on hold whilst the case was appealed at the ECJ.

The ruling demonstrates how poor the regulation is: so many claim cases around the EU have had to go to court, to the Supreme Court in the UK and now the European Court of Justice. Well-written regulation should shape the minimum standards and compensation rules but they have not been clear enough which has led to confusion and legal cases. Reform of the regulation is underway in Brussels, but progress has stalled due to disagreements between member states.

An increase in the already large number of compensation claims is now inevitable.

Helen Dewdney consumer campaigner and author of How to Complain: The Essential Consumer Guide to Getting Refunds, Redress and Results! whilst welcoming another win for consumers says that, in her opinion, compensation should not be a set amount for each claim, it should be a percentage of the ticket price. She says:

“In some cases the compensation will be higher than the price of the ticket which is ridiculous and will result in only one thing, an increase in prices.” She also warns of the increase in number of no-win no-fee organisations claiming on behalf of people who have been delayed. “There is nothing that an organisation or lawyer can do regarding delayed or denied boarding that a consumer cannot do themselves and get 100% of the compensation figure (which varies on length of flight and delay).” (For details on what you need to know to claim compensation see here.)

Notes to editors:
[1] The decisions made in the Huzar v Jet2 and Dawson v Thomson cases confirmed that routine technical difficulties are not extraordinary circumstances. Ron Huzar was delayed for 27 hours on a Malaga to Manchester flight. The delay had been caused by faulty wiring and Jet2 had claimed that this was unforeseen and categorised as an ‘extraordinary circumstance’. In the Dawson v Thomson case, James Dawson was claiming for an eight-hour delay on a flight to the Dominican Republic in 2006; his claim was made in 2012. The airline refused to pay, citing the Montreal Convention, which limits claims to two years after an incident. On October 31st 2014 the Supreme Court upheld the rulings at appeal. Delays caused by technical problems cannot be categorised as ‘extraordinary’ circumstances and not liable for compensation and consumers have up to six years after the flight to make qualifying compensation claims. A judge in Liverpool county court threw out applications on the 25th February 2015 by Jet2, Ryanair, Flybe and Wizz Air to keep claims on hold until a case in Holland about technical delays (Van dear Kans v KLM) was decided. He stated that cases should be settled in line with existing passenger-rights rules.

BBC Breakfast 5th August 2015 flight delays

Categories
ADR Ombudsman Press releases Topical

The ADR Directive and Ombudsman Omnishambles

Update to this story Ombudsman Omnishambles: New report exposes serious failings in ombudsman approval and oversight

Further update Landing in court with Ryanair provides links to more reports, articles in the FT  and Which? regarding the mess.

New privatised system of Alternative Dispute Resolution threatens consumer complaints chaos – but even its own implementation has now been delayed…

The ADR Directive

A new EU-mandated system of private ombudsmen which was due to come into force today, 9 July 2015, will not now be implemented 1 October 2015. Private companies will then be handling consumer complaints in sectors including retail, aviation, furniture and property.

Under the new system companies would be obliged to point customers to private complaints-handling companies but would not be bound by their decisions.

Issues in ADR approval and monitoring

Apart from the delay in implementation, there are many problems with the system as it is proposed.

For example:

  • There are two ombudsmen for the retail sector: One run by the company The Retail Ombudsman, the other by Ombudsman Services. There are also three ombudsmen for the property sector. This will lead to considerable confusion for the public. [1]
  • There are no criminal records checks for ombudsmen employees or directors: The company calling itself The Retail Ombudsman employs a convicted criminal as its communications director. [2]
  • One private company already running another ombudsman service pre-launched an Aviation Ombudsman without obtaining CAA permission. [3]
  • The CAA had previously confirmed that it would be winding down its own complaints scheme in favour of a privatised operation from 1 September 2015 (depending on certain conditions). [4]
  • There is no “ombudsman of ombudsmen” – The body responsible setting up Alternative Dispute Resolution (ADR) schemes, the Trading Standards Institute (TSI), has no consumer complaints system.
  • The chairman of the trade body The Ombudsman Association, Lewis Shand Smith, is also the CEO of one of the ombudsman companies. [5]
  • When the law eventually comes into force from 1 October 2015, traders will be obliged to tell consumers where to go for ADR but are not obliged to use ADR services.
  • Update 12/10/15 Ombudsman services have set up a Consumer Ombudsman for “everything else” increasing the likelihood of more doubling up.

Supermarket comments on The Retail Ombudsman

Asked about the retail ombudsman via Twitter in May this year, Sainsbury’s social media staff replied candidly.

Further details of these issues are available on request.

About the authors

Marcus Williamson, Editor of the consumer information website CEOemail.com, says “These new companies are in this for the money and will be charging the companies whose customers are complaining. Those costs will inevitably be passed onto consumers through higher prices of products and services.”

More about CEOemail.com:  http://www.ceoemail.com/ceoemail-faq.php

Helen Dewdney, Consumer Champion and author of the book “How To Complain: The ESSENTIAL Consumer Guide to Getting REFUNDS, Redress and RESULTS!”, says:  “This ongoing Ombudsman omnishambles is helping no-one and will only result in confusion for consumers. If an ADR regime is to work well for consumers it needs a single ombudsman per sector, a clear code of practice and independent oversight.”

More about Helen Dewdney: //www.thecomplainingcow.co.uk/
Email: helen@thecomplainingcow.co.uk

Notes

[1] For example: http://www.theretailombudsman.org.uk/ and
http://www.ombudsman-services.org/retail-and-other-sectors.html
[2] http://www.theretailombudsman.org.uk/contact/
Neville Thurlbeck, former News of the World chief reporter, was jailed for 6 months in July 2014 for phone hacking. The Trading Standards Institute has confirmed that criminal record checks are not necessary for ombudsman directors or staff.
[3] Screenshot available on request
[4] https://www.caa.co.uk/application.aspx?catid=14&pagetype=65&appid=7&mode=detail&nid=2446
[5] http://www.ombudsmanassociation.org/association-executive.php

Radio 4 appearance discussing ombudsmen:

Ombudsman Omnishambles discussed on You and Yours Radio 4

 

How approval bodies are failing to properly approve and monitor Alternative Dispute Resolution -