Bott & Company Solicitors Ltd v Ryanair Dac
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Simon,Lord Justice Lindblom |
| Judgment Date | 12 February 2019 |
| Neutral Citation | [2019] EWCA Civ 143 |
| Docket Number | Case No: A3/2018/0871 |
| Court | Court of Appeal (Civil Division) |
| Date | 12 February 2019 |
[2019] EWCA Civ 143
Lord Justice Lewison
Lord Justice Simon
and
Lord Justice Lindblom
Case No: A3/2018/0871
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, CHANCERY DIVISION
Mr Edward Murray (sitting as a Deputy Judge of the Chancery Division)
HC-2016-003081
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr George Bompas QC & Ms Anna Markham (instructed by Rosenblatt Solicitors) for the Appellant
Mr Brian Kennelly QC & Mr Tom Coates (instructed by Oracle Solicitors) for the Respondent
Hearing dates: 5 th and 6 th February 2019
APPROVED JUDGMENT
Under EU law airline passengers are entitled to be compensated by airlines if a booked flight is cancelled at short notice or delayed for a substantial period. Bott & Co Solicitors Ltd (“Bott”) is a firm of solicitors which specialises in handling such claims on behalf of passengers. Its business model depends on processing a high volume of such claims all of which are of low value. Ryanair is one of Europe's largest airlines, and processes many such claims. Almost all of them result in the payment of compensation. Where Ryanair decides to make a direct payment to a customer who has instructed Bott, Bott claims to be entitled to an equitable lien over the payment which would require Ryanair to hold back part of the compensation in order to cover Bott's entitlement to fees; or to make payment of the whole of the compensation direct to Bott.
Bott began its claim under Part 8 of the CPR. That is a procedure designed for cases in which there is no substantial dispute of fact. As a result, none of the witnesses was cross-examined.
Mr Edward Murray, sitting as a judge of the Chancery Division, rejected Bott's claim to an equitable lien. The first issue raised by this appeal is whether he was wrong to do so.
In the summer of July 2016 Ryanair changed its standard terms and conditions. Since then they have included in clause 15 a claims procedure which the passenger is required to follow. The passenger is required to deal directly with Ryanair; and to allow Ryanair 28 days to respond before instructing a third party to act on their behalf. Bott argues that that term is invalid under EU law. The judge rejected that argument too. The second issue on the appeal is whether he was wrong to do so.
I can take the facts from the judge's careful judgment, which is at [2018] EWHC 534 (Ch), [2018] 3 Costs LO 275.
An air passenger whose flight is delayed for a specified period beyond its scheduled time of departure is entitled, subject to certain conditions, to compensation for the delay under Regulation (EC) No 261/2004 (“Regulation 261”). Regulation 261 does not expressly provide for compensation for delay. It does provide for compensation under article 4 in a case where an air passenger is denied boarding against their will and under article 5 in a case where a flight is cancelled. Article 6 deals with delay of a flight beyond its scheduled time of departure, but it expressly provides only for assistance to be given by the carrier. But the CJEU has decided that the Regulation must be interpreted as if it did provide for compensation for delay. In any of these cases, compensation is payable under article 7, subject to certain conditions, including, in relation to a case under article 5, that the cancellation does not arise as a result of “extraordinary circumstances”. Examples of “extraordinary circumstances” are given in recitals (14) and (15) to the Regulation.
The principal conditions, apart from the delay exceeding a prescribed length of time (which, in turn, depends on the distance covered by the flight), are broadly that (i) the air passenger is departing from an EU member state or is travelling to an EU member state with an EU airline and (ii) the delay is not caused by “extraordinary circumstances”. Compensation is, in principle, fixed by the Regulation. The amount depends on the route and distance of the flight and the length of the delay. Depending on these variables it is either €250, €400 or €600. The highest level of compensation is, in effect, for long-haul flights. Ryanair does not operate long-haul flights; so that the compensation that it pays will be either €250 or €400. There are some circumstances in which the compensation may be reduced by 50 per cent.
Article 15 of Regulation 261 provides:
“ Exclusion of waiver
1. Obligations vis-a-vis passengers pursuant to this Regulation may not be limited or waived, notably by a derogation or restrictive clause in the contract of carriage.
2. If, nevertheless, such a derogation or restrictive clause is applied in respect of a passenger, or if the passenger is not correctly informed of his rights and for that reason has accepted compensation which is inferior to that provided for in this Regulation, the passenger shall still be entitled to take the necessary proceedings before the competent courts or bodies in order to obtain additional compensation.”
Bott began handling flight delay compensation claims in February 2013, since when it has acted on approximately 125,000 claims. It has a Flight Delay Compensation Department, which is staffed by one solicitor, Mr Benson, assisted by paralegals. Bott has developed an on-line tool, accessible on its website, which enables a prospective client to enter their flight details and then check whether their claim satisfies the basic eligibility conditions. Those conditions concern time limits and length of delay in article 6 of Regulation 261, distance in article 7 of the Regulation and whether a flight was to or from an airport in an EU member state as required by article 1 of the Regulation. The on-line tool operates without human intervention on the data entered by the prospective client and includes a check against a database of weather reports in order to anticipate whether a problem with the weather might have caused the delay, constituting “extraordinary circumstances” and thus a defence of the airline to a claim for compensation for the delay.
After it has operated on the data entered by a prospective client, Bott's on-line tool confirms to the prospective client whether they have a claim that prima facie is eligible for compensation under the Regulation and, if so, for how much. The client is then invited to provide other relevant information on-line, including the client's contact details, and to confirm whether they wish to instruct Bott on a “no win, no fee” basis. None of this involves manual intervention by anyone at Bott.
If a prospective client confirms through the on-line tool that they wish to proceed with their claim, Bott sends them an e-mail to confirm receipt of the claim, notifying them of Bott's reference number, indicating that Bott will verify the flight information entered, asking whether any other passengers need to be added to the claim and asking the prospective client to provide any documentation such as boarding passes, booking confirmations or correspondence with the airline. The e-mail message includes as an attachment a client publication prepared by Bott entitled “Flight Delay Compensation Guide: Are You Entitled to Hundreds of Pounds?”. It sets out basic details of the flight delay compensation provisions of the Regulation, what counts as “extraordinary circumstances”, how much can be claimed relative to flight distance and length of delay and how a claim should be submitted through Bott. The publication includes some other information, including contact and social media details for Bott.
One of Bott's paralegals then manually checks the claim under Mr Benson's supervision to verify whether the claim has more than a 50% prospect of success. That process is usually completed within 48 hours. If the claim is accepted by Bott, then Bott sends a further e-mail confirming that Bott is willing to accept the case on a “no-win no-fee basis” and that, if the claim is successful, Bott's fees will be 25% of the total compensation amount awarded to the client, plus VAT; and an administration fee of £25 per passenger, to be deducted from the compensation before Bott pays the compensation from its client account directly to the client's bank account. The e-mail notifies the client that, as a result of the client's having submitted their details through the website, Bott has started working on the claim and is in the process of drafting a first letter to the airline. The e-mail also informs the client that Bott's Terms and Conditions will follow. In a separate e-mail, Bott sends the client a link to its Terms and Conditions, requesting that the client read and then sign them electronically. The conditional fee agreement (CFA) is also sent by e-mail in a form that the client can download. The Terms and Conditions make it clear that if the airline does not accept the claim, Bott has permission from the client to issue court proceedings.
Having accepted a claim and confirmed the client's instructions following the procedure outlined above, Bott sends a letter before action in a standard format to the relevant airline, referring to the Practice Direction on Pre-Action Conduct, setting out the claim details (passenger's name, booking number, flight number, flight distance and details of delay), asking for a response within 30 days and, if the claim is admitted, for payment within 21 days of the admission. Bott requests that payment be made by the airline by cheque or by bank transfer to Bott's client account. The letter also asks the airline to confirm whether the statutory defence of “extraordinary circumstances” will be raised and, if so, asks that the airline clarify the exact nature of the circumstances to be relied upon and that it provide supporting disclosure. In the letter Bott reserves the right to issue...
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