Friday, March 23, 2012

Denise McDonagh v Ryanair Ltd

Yesterday, Advocate General Yves Bot of the Court of Justice for the European Union (CJEU) delivered his opinion in Case C-12/11, Denise McDonagh v Ryanair Ltd. The case pertains to the disruption of air service caused by the eruption of an Iceland's Eyjafjallajökull volcano in April 2010. Denise McDonagh's Ryanair return flight to Ireland was canceled and she was stranded for a week during the ash cloud crisis. McDonagh brought a claim against Ryanair in the Dublin Metropolitan District Court alleging that Ryanair failed to provide her with care, in particular meals and hotel accommodations, while she was stranded, as required by Articles 5 and 9 of EC Regulation No 261/2004. The Dublin Court referred the case to the CJEU to consider whether the unusual nature of the circumstances, namely the volcanic eruption, exempted Ryanair from having to provide care in this situation, whether the regulation contains an implied limitation on the amount of care Ryanair needed to provide, and if there were no exemption or limitation, whether the regulation was in violation of the principles of proportionality or non-discrimination, or the principle of equitable balance of interests enshrined in the Montreal Convention, and thereby invalid. Advocate General Bot's opinion finds in McDonagh's favor on all counts. According to the opinion, the regulation explicitly exempts carriers from the requirement to provide compensation but still requires them to provide care when cancellations are caused by "extraordinary circumstances," and a volcanic eruption clearly falls within the definition of "extraordinary circumstances." The opinion also neglects to read into the regulation any implied limitation into the duty to provide care. Both of these readings of the regulation are difficult to argue with. The opinion doesn't find the regulations to violate any of the principles in question, rebuffing the claims about proportionality by reference to carriers' ability to pass costs on to consumers through ticket prices, and citing a prior case, Case C‑344/04 IATA and ELFAA [2006] ECR I-403, where the court had previously dismissed arguments against the regulation on the grounds of non-discrimination or the Montreal Convention. It is worth noting that EC officials are contemplating changes to the regulation that would limit carriers' liability to provide care, suggesting that the Advocate General's interpretation of the existing regulation is correct, but that Ryanair has a legitimate argument that liability should be limited. See Rose Jacobs and Joshua Chaffin, Ryanair Set Back in Volcanic Ash Case, Financial Times, March 22, 2012 (available here). The Advocate General's opinion is not binding, but full court judgments typically hew closely to Advocate General opinions. Those who wish to read the Advocate General's opinion can do so here.

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