U.K. Court of Appeal Confirms Airlines May Compensate Passengers Directly –The Beginning of the End of Ambulance-Chasing Over Passenger Rights Claims in the EU?

Regulation (EC) No. 261/2004 establishes common rules on compensation and assistance to airline passengers in the event of denied boarding, cancellation, or long delay of flights. A recent development regarding these passenger rights has been the emergence of third party claim agencies, which seek to enforce the rights granted to passengers on their behalf. Such claim agencies often work on a commission or a no-cure-no-pay basis. Typically, the agencies’ contracts state that any compensation recovered on behalf of a passenger be paid directly to them so they can take their cut and pass on the remainder to the passenger. By 2016, one claim agency, Bott & Co. Solicitors, was handling roughly 1,100 claims per month against Ryanair, giving it a monthly fee income estimated at £ 100,000. That year, Ryanair began paying passengers directly and requiring that they submit claim forms directly to the carrier, regardless of whether they had hired a claim agency. Left to collect fees on its own, Bott sued Ryanair in the U.K., arguing that it was entitled to an equitable lien for the amount of its fees, and that Ryanair’s revised claim requirements constituted an unlawful material obstacle for passengers seeking compensation. In this paper, the authors comment on the Bott decision, discussing the practice of claim agencies under Regulation 261, their method of remuneration, and the impact of this decision on air carriers.

Language

  • English

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Filing Info

  • Accession Number: 01724992
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 13 2019 9:29AM