Grounded!

In a literal sense, the dust from last year’s Icelandic volcanic eruption may have settled, but for some stranded passengers who booked their flights with Ryanair, the journey to receiving the compensation to which they are legally entitled may be more prolonged and arduous than their eventual trips home.

In the immediate aftermath of the April 2010 volcanic eruption, Ryanair’s chief executive Michael O’Leary announced that his airline would not make compensation payments to stranded passengers in accordance with the relevant EC consumer protection laws. Mr O’Leary was quoted in the Belfast Telegraph on 21 April 2010 to the effect that: “There’s no legislation designed that says any airline getting a fare of ?30 should be reimbursing passengers many thousands of euro for hotel accommodation. It’s absurd.”

Mr O’Leary quickly changed his view. The Daily Mail on 22 April 2010 reported that: “A controversial budget airline boss has today announced he will comply with ‘unfair’ European law which obliges carriers to refund bills of thousands of passengers caught up in the volcano crisis. The dramatic u-turn comes after Michael O’Leary told angry tourists whose flights were cancelled that he would go to court rather than refund their expenses.” It may be that the change of heart was triggered by widespread suggestions in the press that complying with the law was a requirement rather than a choice.

But we might wonder how enthusiastic his company has actually been about dealing with claims made by stranded customers, given Mr O’Leary’s subsequently quoted view (The Guardian 1 June 2010) that the EC regulation was a “cheater’s charter”.

The regulations

The relevant piece of EC law is Regulation  261/2004/EC of the European Parliament and of the Council of 11 February 2004. It is easily accessed online. Article 7 (see box opposite) provides for compensation for cancelled flights. However, by virtue of Art 5(3), Art 7 does not apply if the cancellation was caused by circumstances beyond the airline’s control. The volcanic eruption obviously falls into that category. Art 8 requires airlines either to reimburse passengers the full cost of a cancelled flight or to provide an alternative flight at no extra cost.

The most relevant provision of the Regulation is Art 9 (see box on p 118). However, this deals with “care” expenses, such as accommodation and subsistence bills which passengers incur because of the flight cancellation.
Crucially for passengers stranded by the volcanic eruption, the Art 5(3) exemption for circumstances beyond the airline’s control does not apply to Art 9 claims. Nor does Art 9 restrict the amount of compensation to “reasonable” amounts. So if a passenger and his family are stranded for 10 days or a fortnight, as many passengers were in April, the costs incurred and the entitlement to compensation could be pretty substantial.

When we found our flight back to London cancelled, a Ryanair employee at the airport in Tenerife handed us a tiny scrap of paper with an address to which claims for compensation might be sent. The employee said nothing helpful about finding hotels nearby, but we managed to sort this out ourselves. After we spent a great deal over the next four or five days online, on the phone and in person at the airport, Ryanair offered us a flight home two weeks later. We managed to get home a good deal earlier by using other airlines, but had run up £1,500 or so in “care” expenses by then.

I had kept all our receipts, so when we got home I sent Ryanair a carefully drafted letter detailing all the costs and attaching copies of all the receipts. I said that if I had not heard back in 28 days I would send another letter, and if there was no reply in a further 28 days I would begin legal action. To be sure that I had evidence of the letter being received, I sent it by recorded delivery on 19 May. It was delivered, but not acknowledged by Ryanair. The same thing happened with the follow-up letter written seven weeks later on 9 July.

Consumer lawyers are certainly familiar with firms that adopt a deliberate strategy of ignoring claims against them, even when the firm knows that the claim is well-founded, in the hope that consumers will eventually give up and go away. When there are lots of claims, especially if the sums concerned are fairly small and the only recourse open to the customer is to sue, that can be a perfectly “rational” strategy. Many consumers will find the prospect of beginning legal proceedings confusing or intimidating, and if only a few hundred pounds is at stake will conclude it is not worth the aggravation of pursuing a claim. Of course, if thousands and thousands of customers decide to write off a few hundred pounds each, the firm is saving itself millions of pounds And if individual bills run above a thousand pounds, the potential “profit” to the firm can be in the tens of millions.

Next steps

Given that Ryanair had not provided a reply to either of my letters, and given Mr O’Leary’s suggestion that Reg 9 was a “cheater’s charter”, I began to wonder if it was dealing with the volcanic eruption claims in this way. Of course, it might just have been overwhelmed by claims through which its beleaguered staff were assiduously working. But by late July, I had concluded Ryanair might not ever respond to letters, and that the only way of receiving compensation would be to sue.

It is in fact easy to bring a small claim in the Irish courts in relation to a consumer law dispute. For a claim against Ryanair, the relevant court is the Swords District Court in Dublin. The paperwork can be done online, and the relevant forms and an explanation of the court’s powers, which are limited to claims of €2,000 or less, can be found at www.citizensinformation.ie .The form is designed to be completed in everyday rather than legal language. Claimants are only allowed 1,500 characters (not 1,500 words) to state their case. Filing a claim costs €15. Most importantly, the court seems to have designated officers who proactively manage the case on the consumer’s behalf. My claim was processed with great courtesy and efficiency by a Mr Dermot O’Byrne.

All that the consumer needs to do in the claim form is say that he is making a claim under Art 9, that he was booked on a particular flight, that the flight was cancelled, that as a result he incurred accommodation and subsistence costs to a specified amount, that receipts for the costs can be provided, and that the airline has not responded to requests for compensation.

I had assumed Ryanair would throw in the towel as soon as the writ dropped through its door. That turned out to a bit naïve. A Mr Edel Coughlan of Ryanair responded to my claim, which was expressly limited to “care” expenses under Art 9, with a long letter to Mr O’Byrne explaining why I was not entitled to any compensation under Art 7 to recoup the costs of our alternate flights.

The letter made no reference to Art 9 at all. Mr Coughlan also accused me of failing to follow the designated compensation procedure, even though what I had done was precisely what was specified on the scrap of paper Ryanair handed out at the airport. This seemed a petty letter to write. Since I had gone to the trouble of bringing a claim, it was unlikely that I would give up in the face of a reply which dealt with a claim I was not making and ignored the claim I had actually issued. It took me 10 minutes to write back to Mr O’Byrne, explaining why Ryanair’s response did not address the claim I had raised.

Mr O’Byrne evidently saw the sense in my reply and communicated that to Ryanair, since a week or so later, Ryanair’s Mr Coughlan wrote again to the court, this time saying Ryanair had “reconsidered” my claim, and offering to settle for a sum that was close enough to what I had had to spend to be satisfactory. It also transpired that Ryanair had refunded my cancelled flight costs to the travel agency I had booked through some weeks earlier, although since neither Ryanair nor the agency had bothered to tell me I did not find this out until my Art 9 claim was brought.

Mr O’Byrne was able to assure me that in his experience Ryanair always honoured agreements of this sort; a comment which perhaps suggests that Rynair is sued quite regularly by stranded passengers whose compensation claims it has ignored.

It seems quite likely that there are a great many Ryanair passengers who have legitimate claims for “care” expenses under Art 9. If my own experience is any guide, it may also be that an appreciable number of people have made compensation requests to Ryanair which have not been settled or even acknowledged. Thanks to the small claims scheme established by the Irish Parliament, and thanks to the efficient work of court officers such as Mr O’Byrne, it is easy for consumers to turn their abstract legal rights into the reality of a monetary settlement. And if enough of us take the small amount of trouble needed to do so, we might find Ryanair is a bit more responsive to compensation requests in future.

Ian Loveland is professor of public law at the City University Law School and a barrister at Arden Chambers.