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Recent case-law and tendency on Regulation (EC) No. 261/2004

No Need To Provide Evidence Of The Delay

By Decision No. 1584 dated 23 January 2018, the Italian Supreme Court found that in case of flight cancellation or delay at arrival the burden of proof lies with the air carrier. The Court, overturning a previous decision of the Court of Appeal of Rome, affirmed that a passenger claiming compensation under Regulation (EC) No. 261/2004 must provide documentation of the contractual source (that is to say he must provide evidence of the flight ticket) with no further need to prove that the air carrier has not properly fulfilled its obligations under the transport contract. In other words, according to the said position, the passenger must only prove the source of its right to compensation and it is not required to submit documentation concerning the delay/cancellation itself. The passenger, pursuant to the Court's opinion, is not required to further demonstrate that there has been a breach of the contract of carriage by the carrier.

As the Supreme Court notably observed, while passengers cannot provide direct evidence of the delay, the air carrier, which operates under the control and supervision of regulatory and airport authorities, has simple and unconditioned access to flight data record and, therefore, it can provide official proof and indication of the arrival time, as well as any evidence concerning technical failures or bad weather conditions.

The aforementioned decision confirms the principle affirmed by the Court of Justice of the European Union (CJEU) in several proceedings, pursuant to which, in the context of the application of the 261 Regulation, the existence of the passenger's right to compensation is presumed unless the air carrier is able to prove: (i) the absence of grounds for compensation (for instance, the flight has not been delayed); or (ii) that the service disruption occurred due to extraordinary circumstances, as set out in Art. 5(3) of the 261 Regulation.

Furthermore, this line of reasoning is consistent with a systematic and combined reading of the 261 Regulation and the 1999 Montreal Convention, according to which the air carrier must prove that the non-performance (denied boarding and cancellation) or partial performance (delay at arrival) of the transport contract was caused by an event of force majeure or in any case beyond its control.

By corroborating the predominant European orientation, this decision of the Italian Supreme Court strengthens the favourable inclination of the CJEU towards a broader consumer protection. The European Court has indeed repeatedly intervened – essentially rewriting the 261 Regulation – with the aim to expand its scope and application. Within the aviation sector criticisms are quite common around the 261 Regulation insofar as it currently establishes a consumer-friendly environment, de facto disregarding the complex and dynamic nature of the air transport services.

Assignment of passengers' rights under Regulation (EC) No. 261/2004

Following a tendency already seen in other European countries, the Italian courts are facing an increase of judicial claims submitted by debt collection companies for denied boarding, cancellation and delay of flights pursuant to Regulation (EC) No. 261/2004. The claims are brought on the basis of the assignment of passengers' rights of compensation set out by the said Regulation. This tendency gives rise to a number of issues of jurisdiction and legal entitlement which the Italian case-law is solving with different approaches.

In terms of jurisdiction the European Court of Justice (case C-204/08) resolved that "in the case of air transport of passengers from one Member State to another Member State, carried out on the basis of a contract with only one airline, which is the operating carrier, the court having jurisdiction to deal with a claim for compensation founded on that transport contract and on Regulation (EC) No 261/2004 (…) is that, at the applicant's choice, which has territorial jurisdiction over the place of departure or place of arrival of the aircraft, as those places are agreed in that contract". Therefore, according to the EU Court of Justice an airline may be sued either before the courts of the place of departure or before the courts of the place of arrival, based on the interpretation of Article 5(1)(b) of Regulation (EC) No. 44/2001, now replaced by article 7(1)(b) of Regulation (EU) No. 1215/2012 stating that: "A person domiciled in a Member State may be sued in another Member State: (1) (a) in matters relating to a contract, in the courts for the place of performance of the obligation in question; (b) for the purpose of this provision and unless otherwise agreed, the place of performance of the obligation in question shall be: (…) in the case of the provision of services, the place in a Member State where, under the contract, the services were provided or should have been provided". Starting from a strict application of the EU regulatory framework, certain Italian case-law denies the jurisdiction over claims submitted by companies to which passengers assign their rights of compensation, since for the EU Court of Justice the above mentioned rule would apply only to passengers as individuals and only in case of air transport from one Member State to another Member State (thus excluding national routes). A different case-law is otherwise of the opinion that the Regulation and Court of Justice's decision should be interpreted in a broad sense so as to allow claims brought by legal entities (acting as passengers' assignees) and also in connection with flights between national airports.

Moreover the case-law contrast concerns the lawful assignment of passengers' rights to companies specialized in debt collection. The courts that have denied the jurisdiction so far treat the compensation as a personal right not being subject to assignment, because strictly related to consumers' protection and to refunding individuals of service defaults which may seriously affect the private and business life. This evaluation seems in line with preamble (2) of Regulation (EC) No. 261/2004 "Denied boarding and cancellation or long delay of flights cause serious trouble and inconvenience to passengers" and it also finds legal ground in article 1260 of the Italian Civil Code, providing for the general rule of assignability of credits unless they have a personal nature. On the contrary other courts have considered lawful to assign certain rights of compensation for non-economic damages (such as the ones caused by denied boarding, cancellation and delay of flights), since they would not have a personal nature. This jurisprudence believes that the prohibition to assign rights pursuant to the Italian Civil Code relates only to those rights meant to the satisfaction of a direct interest – either physical or moral – of an individual, like alimentary obligations under the family laws.

The majority of the judicial decisions on the subject matter have been issued by the lowest Italian courts dealing with claims up to Euro 5.000 (the so called "Judges of Peace"). Such decisions are subject to appeal before the ordinary tribunals and then – in case of third and final instance – before the Italian Supreme Court ("Corte di Cassazione"). The Supreme Court holds ultimate jurisdiction over the compliance and interpretation of the laws and, therefore, by way of its resolutions may establish orientation criteria for the judicial activity of the lower courts.