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04 September 2019
On 6 August 2019 the Federal Court of Justice issued a verdict stating that compensation under Article 7 of the EU Flight Delay Compensation Regulation (261/2004) must be offset against compensation claims made under national law that were caused by the same incident. The verdict prevents passengers from being overcompensated.
The decision centres on two claims which were filed by passengers following flight delays. In the first case, passengers who were booked on a flight from Frankfurt to Las Vegas were denied boarding since the flight was overbooked. This resulted in them being delayed by more than 30 hours.
In the second case, a flight from Frankfurt to Windhoek was delayed by 24 hours. The passengers demanded compensation from the travel agency for expenses (eg, booked hotels and rental cars) under German contractual liability law. However, the airlines had already paid compensation under Article 7 of the EU Flight Delay Compensation Regulation. The Frankfurt Local Court (the first-instance court) dismissed both contractual claims. This decision was confirmed by the Frankfurt Regional Court (the appeal court).
In its decision, the Federal Court of Justice confirmed a German civil law principle which states that compensation for damages must not lead to a claimant's financial advantage. Instead, the claimant must be put in the same financial situation as if the damaging event had never happened. If the passengers in the present cases were allowed to claim compensation for damages under national law and the EU Flight Delay Compensation Regulation, this principle would be infringed. This would not be the case if the regulation's purpose was not to compensate sustained damages following delayed flights. Therefore, the main question is how to interpret the regulation and the purpose of the compensation stipulations.
The Federal Court of Justice had already been confronted with the same legal question in a 2013 case. However, at that time, there was no clear interpretation of the European norm and, as such, the court referred the matter to the European Court of Justice (ECJ) for a preliminary ruling to clarify the EU Flight Delay Compensation Regulation's purpose. Due to a confession of judgment, that legal question was not ruled.
In contrast to the 2013 case, the Federal Court of Justice considered it unnecessary to refer the 2019 case to the ECJ because a new ruling had been released, which allowed the Federal Court of Justice to interpret the purpose of Article 7 of the EU Flight Delay Compensation Regulation without guidance. Recital 36 and Article 14 (5) of EU Directive 2015/2302 state that compensation granted under the EU Flight Delay Compensation Regulation must be deducted from compensation for damages from other sources of law to avoid overcompensation.
Therefore, the German principle of law which prohibits overcompensation would be infringed if compensation under the regulation and compensation for damages were not deducted.
The Federal Court of Justice consequently concluded that passengers can choose between compensation for damages under national law and compensation granted under the EU Flight Delay Compensation Regulation if both claims are based on the same incident (ie, the delay or cancellation of a flight). While compensation in accordance with the regulation has the effect of liquidated damages, claims under German law must be verified in detail, which means that each loss must be itemised. If both are claimed, the sums must be deducted from each other.
The Federal Court of Justice's judgment is welcomed, as it provides greater legal certainty and balances the interests of airlines and customers. Any other decision would have overreached the goal of consumer protection at the expense of airlines and travel businesses by wrongfully penalising them. By avoiding requiring airlines to pay doubled monetary charges greater fairness is achieved. On the one hand, passengers obtain no unjustified enrichment so that airlines and travel businesses are not excessively charged. On the other hand, the strong EU consumer protection regime is still protected.
For further information on this topic please contact Oliver Nissen at Arnecke Sibeth Dabelstein by telephone (+49 30 814 59 13 00) or email (email@example.com). The Arnecke Sibeth Dabelstein website can be accessed at www.asd-law.com.
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