Third country carriers and compensation under EC261

On 15 March 2018, the UK Supreme Court refused Emirates leave to appeal the UK Court of Appeal’s decision in the joint cases of Gahan -v- Emirates and Buckley and Ors -v- Emirates [2017] EWCA Civ 1530 (“Gahan“). The UK Court of Appeal had upheld a previous decision made by the Liverpool County Court. In refusing Emirates leave to appeal, the UK Supreme Court found that Emirates had not submitted an arguable point of law which challenged the application of EU Regulation (EC) No 261/2004 (“EC261“) to delays caused by third country carriers, including for trips with connecting sectors in non-EU hubs.

EC261 provides for passengers to be entitled to compensation (including monetary compensation for missed connections up to €600) when their flight has been excessively delayed (3 hours or more), cancelled or overbooked, and the airline is at fault. In its reasons for judgment dated 12 October 2017, the UK Court of Appeal found that despite being a non-EU carrier, Emirates was liable for passengers delayed more than three hours after arrival at their final destination due to missing their connecting flights to be compensated under EU261.

The Court in Gahan considered that EC261 had applied, as the first leg of each passenger’s journey had departed from an EU member state and should therefore be considered together with a directly connecting flight, even where that connection occurs in a non-EU member state to a non-EU destination.

While it remains unclear at this stage whether the UK will enact domestic passenger protections similar to EC261 post Brexit, the impact of the UK Court of Appeal’s decision means that third country carriers flying to or from the EU (including the UK) will be expected to compensate passengers affected by delays arising from directly connecting flights.

Third country carriers not currently compensating their passengers in circumstances similar to Gahan should review their policies for flights currently operated to and from the UK to ensure compliance with EC261, or risk facing enforcement action by the UK Civil Aviation Authority.

This article was written by Matthew Brooks, Partner and Ankush Chauhan, Senior Associate.