Sunday, 27 March 2016

1999 Montreal Convention: CJEU rules that also employers may be entitled to compensation

The Court of Justice of the EU (CJEU) ruled that employers may also be entitled to receive compensation under the 1999 Montreal Convention (MC) on liability of international air carriers. Furthermore, the Court found that compensation under the MC is provided per passenger; therefore, an employer who has booked tickets for more than one employees can claim higher amounts of compensation than each employee could claim individually.

The case concerned delay in arriving at the final destination. The Lithuanian Investigation Service had booked tickets with Air Baltic for two of its employees for a professional trip. The flight consisted of more legs. Delay in one leg caused missing a connecting flight and extended the time of the travel by over 14 hours. As a result, the Investigation Service paid its employees LTL 1 168.35 (ca. EUR 338) in travel expenses and State social security contributions, as it was required to do under Lithuanian legislation. The Investigation Service then sought to be compensated for that amount by Air Baltic, which did not agree to do so.

The Court found that the MC stipulates compensation for delay, yet it does not define the persons who might suffer damage. Therefore, the objective of the MC should be examined, which is to provide enhanced consumer protection, as laid down in its preamble. According to the Court, the notion of “consumer” under the MC does not refer only to passengers, but should be construed broadly and include also persons who are not carried on board the aircraft. In addition, the MC regulates the legal issues arising from the contract of air carriage, as can be deduced from a number of provisions [e.g. Arts 1(2), 29, 33(1), 3(5)]. Therefore, the MC is applicable also to persons who have concluded the contract of carriage with the air carrier, but are not themselves passengers.

Besides, the Court found that compensation limits under the MC are per passenger. Thus, an employer who has concluded a contract with the air carrier for more than one employees may claim higher compensation than each individual employee could. In this case, the compensation limit applicable to the claim of the employer would be the limit per passenger foreseen in the MC multiplied by the number of the travelling employees, e.g. for delay occasioned by two employees the limit of the carrier’s liability would be 4.694 SDR (limit per passenger) x 2. The CJEU observed that such solution strikes an equitable balance of interests: the parties involved, such as the ones in the present case, are placed in a position which is neither more nor less favourable than if individual passengers had suffered damage due to a delay.

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