EU 261 Delay Compensation: The ECJ has an Opportunity to put Things Right

The Sturgeon/Böck ruling by the European Court of Justice ("ECJ") has been the subject of continued controversy and uncertainty ever since the judgment was published in November 2009. It will be recalled that, apparently undeterred by the express and unambiguous wording of EC Regulation 261/2004, the ECJ adopted what might kindly be described as an inventive interpretation of the Regulation in order to conclude that it entitles passengers to compensation for flight delays of over three hours. Whilst some carriers have gritted their teeth and reluctantly paid delay compensation, others have bided their time on delay claims, waiting to see whether the judgment will be allowed to stand in the long term.

Now, following judicial review action in the English court against the UK Civil Aviation Authority ("CAA") brought by BA, Easyjet and TUI and supported by IATA, the High Court has been persuaded to refer the issue to the ECJ to take a further look at passengers' rights under Regulation 261 in the event of a delay. Assuming the ECJ accepts the reference, it will now consider the following questions:

Is Regulation 261 to be interpreted as requiring compensation to be paid to passengers whose flights are subject to delay and, if so, in what circumstances? If not, are Articles 5-7 of Regulation 261 invalid for breach of the principle of equal treatment? If Question 1 is answered in the affirmative, are Articles 5-7 of Regulation 261 invalid, in whole or in part, for (a) inconsistency with the Montreal Convention; (b) breach of the principle of proportionality; and/or (c) breach of the principle of legal certainty? If Question 1 is answered in the affirmative and Question 3 in the negative, what, if any, limits are to be placed upon the temporal effects of the Court's ruling in this case? If Question 1 is answered in the negative, is the Court's ruling to have retrospective effect? The questions referred go to the heart of the criticisms of the Sturgeon judgment and will, one hopes, require the ECJ to apply a level of legal analysis that seemed to be lacking in last November's judgment. The ECJ will now have to consider fully whether the construction of Regulation 261 adopted in Sturgeon can possibly be correct in light of the express wording of the Regulation, previous ECJ case law, and the provisions of the Montreal Convention 1999. It will also have to address whether in reality there is a fundamental legal invalidity in the delay and...