12 Dec

Stuck in bad weather - Who pays?

The following article is by Ian Skuse, Partner, Blake Morgan for Travel Law Today 4th ed. which can be downloaded from ABTA's Member zone and read here.

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“Extraordinary circumstances” may not be as rare as they should be. Massive disruption was caused by the Icelandic ash cloud and more recently hurricane Irma saw thousands of flights cancelled and travellers stranded. Overlapping obligations between travel organisers and carriers need to be understood. Freak weather means additional costs for travellers with meals, refreshments and accommodation required – but who is to pay?

The following are relevant:

  • Montreal Convention 1999 dealing with flight delays
  • Regulation 261/2004 relating to delayed flights
  • Package Travel Regulations 1992 and the PTD 2015
  • Interpretative Guidelines on Regulation 261/2004.

Disruptions caused by extreme weather are unexpected and unavoidable. Extreme and relatively rare, disruption can arise in other circumstances such as air traffic control strikes, war, bird and lightning strike to aircraft and unexpected crew illness. These may well give rise to extraordinary circumstances resulting in disrupted journeys and stranded passengers. We need to analyse liabilities for tour operators, and airlines and who might be responsible for the cost of delays.

Montreal Convention 1999

Article 19 states that the carrier is liable for damage occasioned by delay but is not liable if it took all

reasonable measures to avoid the damage, or that it was impossible for it to do so. Montreal is subject to strict time limits (including a two-year limitation period) and a liability cap of 4,694 Special Drawing Rights per passenger (currently equivalent to £4,926). Montreal claims for delay relate only to actual proven loss and not any indirect loss or consequential damages.

EU Regulation 261/2004

These provide fxed levels of compensation for passengers where their journey is delayed or cancelled resulting in their arrival time being more than three hours later than scheduled. Passengers are also entitled to receive the “right to care” when they should be offered free meals and refreshments; hotel accommodation where a stay of one or more nights becomes necessary and transport between the airport and hotel. This is required even when the delay arises from extraordinary circumstances.

It is this cost of care which causes the most signifcant loss. There are no guidelines regarding the cost of accommodation that might be appropriate, or the management of passengers remaining in expensive resorts rather than at an airport hotel, or those making alternative measures to return home by other means.

Package Travel Regulations 1992

Regulation 14 of the Package Travel Regulations applies where, after departure, a “significant proportion of services are not provided”. In these circumstances, the organiser is obliged to make suitable alternative arrangements, at no extra cost to the consumer, for the continuation of the package. Regulation 14 goes on to say that where alternatives are not possible or unacceptable to the consumer for good reason, the organiser will provide the consumer with equivalent transport back to the place of departure.

ABTA guidance in its Code of Conduct states that if an “outbound flight delay is long enough to mean a significant change to the travel arrangements, then clients are entitled to have a refund”. This is where a client requests it and the guidance states that in that case it should be granted. ABTA’s guidance also refers to problems with a return flight caused by unexpected bad weather or industrial action, then the tour operator isn’t obliged to pay for the additional days that the client must stay at the destination as the holiday is at an end and the only remaining part of the contract is the return flight. Whilst the tour operator must ensure that the return flight occurs, the client is responsible to cover the cost of accommodation until they can fly home.

PTD 2015

Article 13 provides that the organiser must give appropriate assistance to the traveller in particular in circumstances where the traveller’s return cannot take place due to extraordinary circumstances, when the organiser shall bear the cost of necessary accommodation, if possible of equivalent category, for a period not exceeding three nights per traveller.

Interpretative Guidelines relating to 261/2004

These Guidelines throw some light on how the overlap between a tour operator and an airline might be managed and confrm that passenger rights in 261/2004 apply to flights within a package tour, and do not affect rights granted under the

Package Travel Directive. In principle, passengers have rights both against the package organiser and against the carrier. Article 14(5) of PTD 2015 confrms that any right to compensation or price reduction does not affect the rights of travellers under 261/2004 but any compensation or price reduction granted shall be deducted from each other in order to avoid “over compensation”.

The Guidelines confrm that neither PTD 2015 nor 261/2004 deals with whether it is the organiser or the carrier ultimately bearing the costs for these overlapping obligations. It is suggested that contractual provisions between operators and carriers will resolve who should pay.

So where does this leave us?

Given the potentially massive liability for care for delayed passengers, it is the contract between operators and carriers which is critical. Many seat commitment agreements and charter arrangements will carve out the potential liability under 261/2004 and pass this entirely to the organiser. Tour operators may encourage passengers to make claims against airlines or to check in at the airport to trigger potential claims for right to care. For those without contractual provision, there is nothing to prevent the organiser or carrier from seeking to recover from the other the costs of care incurred particularly where there is the overlap. For travel lawyers this is an area where indemnities in contracts need to clarify who has to carry the can.