Sturgeon and Delay Claims Under EC Regulation 261: An Update

The industry has now had several months to adjust to the new landscape for delay claims under EC Regulation 261 which was created by the European Court of Justice ruling in Sturgeon v Condor/Böck v Air France published on 19 November 2009.

The Sturgeon judgment reinterpreted the Regulation so as to read into it an obligation on airlines to pay compensation of between €250-€600 for flight delays exceeding three hours. In doing so, the ECJ has essentially "rewritten" Regulation 261 by construing it in a manner which can never have been intended at the time this legislation came into effect in February 2005.

The Sturgeon judgment has been the focus of intense criticism from the airline industry and its professional advisers and of lobbying efforts with national regulatory authorities and the European Commission. The purpose of this note is not to rehearse the many criticisms which can be made of the judgment, or the many reasons why the ECJ erred badly in its reasoning. Those are only too well-known to airlines. Instead, this note will provide an update on developments since the judgment was published, will review the possibility of legal challenges to the judgment and will set out what options are realistically available to carriers who are now facing claims for compensation for flight delays under Regulation 261.

Status of the Sturgeon Case Itself

Carriers and National Enforcement Bodies ("NEBs") throughout EU Member States have been busy analysing how they should now react to the judgment and the industry has been assessing what legal avenues are available to overturn the judgment, or to restrict its application. Any legal challenge to the judgment - or to the validity of Regulation 261 as now construed - must be initiated in a national court of an EU Member State but will ultimately have to be referred to the ECJ for decision. An immediate line of attack was the Sturgeon case itself which, following the ECJ judgment, was remitted back to the Bundesgerichtshof (the German Federal Court of Justice). Condor, the defendant airline, tried to persuade the German Federal Court to refer the case back to the ECJ, arguing that the ECJ had exceeded its competence in its judgment. That referral would have given an immediate opportunity for a re-examination of the ECJ's reasoning. Unfortunately, on 19 February 2010, the Federal Court declined to refer the case back to the ECJ; the German Court took the view that the ECJ had answered the questions originally put to it when the case was referred for a preliminary ruling and that the case raised no further questions regarding the interpretation of Regulation 261. The Sturgeon case itself is therefore at an end. In light of the approach of the German Federal Court, which took the view that the ECJ judgment should be followed, it is now unlikely that either that court or any other court in Germany will be prepared to refer delay cases under Regulation 261 to the ECJ. The options open to carriers to defend delay claims in Germany are therefore limited.

As to the other part of the equation - the Böck v Air France claim - our understanding is that it remains in the Handelsgericht in Vienna, awaiting a decision.

What is the Position of the European Commission?

Individual carriers, industry associations and NEBs have all discussed the Sturgeon judgment and its consequences with the European Commission but so far the latter remains generally unsympathetic to carriers' predicament. That is perhaps inevitable. Regulation 261 is the EU's flagship air passenger...