Sunday 23 September 2018

EU261 and prohibition of claim assignment: German Regional Court finds clause unfair


The Regional Court (Landesgericht) of Nuremberg-Fuerth in Germany found unfair a clause in the general terms and conditions of an airline that prohibits the assignment of claims under Regulation 261/2004 (EU261) to claims handling companies.

According to the Court’s press release (in German), the Court, acting as a Court of Appeal, upheld the interpretation adopted in three previous judgments of the County Court (Amtsgericht) of Nuremberg, according to which the prohibition of assignment of EU261 claims to legal entities is an unfair contractual term under s. 307 (1) of the German Civil Code, which transposes the respective provisions of European Directive 93/13/EEC. Both Courts accepted that on the one hand, prohibition of assignment facilitates the settlement of claims, because it renders more transparent the pertinent procedure and reduces the airline’s administrative burden, as the airline had argued. On the other hand, the prohibition of assignment entails for passengers potential difficulties in claiming compensation by depriving them of the possibility to entrust an experienced company therewith. Therefore, a balance of interests has to be undertaken. The Courts found that in such cases the passengers’ interests to compensation are superior of those of the airline. It was found that the airline gave no compelling reasons as to why the assignment of claims to legal entities causes a greater administrative burden compared to the (permitted) assignment to natural persons, whereas passengers should retain their freedom to decide on how to pursue best their legal rights.

Nevertheless, other courts in Germany have ruled against the unfairness of such terms, judging that the airline has a legitimate interest to limit the procedural possibilities of the passengers, while the term is not disproportionate, as it is limits and does not exclude such possibilities.

It is quite likely that the issue will be judged by the Federal German Supreme Court (BGH) one day. In a case involving prohibition of assignment of travellers’claims against a tour operator, the BGH found the term unfair. Whether the Supreme Court will adopt the same view as to the clause under discussion remains to be seen.

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