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One step closer to the lawsuits in the Czech Republic against Ryanair

09/12/2020

Not only during the Covid-19 pandemic, Ryanair is often the target of lawsuits for refunds and compensation for flight delays. In November 2020, the Court of Justice of the European Union ("CJEU") dealt with another case against Ryanair, specifically concerning the transfer of passenger rights. The case opens the door for businesses to sue Ryanair in jurisdictions other than Ireland, and Ryanair probably doesn't like it.


As a general rule, passengers, both consumers and non-consumers, may bring an action against an air carrier to claim a refund of the ticket price, or damages, at its discretion at the place of departure, arrival, or the headquarters of the air carrier. If the air carrier determines the jurisdiction of the courts differently in its terms and conditions, this arrangement shall be invalid against the consumer. It will usually be valid for non-consumer (business). Ryanair terms and conditions state that unless specifically excluded, the Irish courts shall have jurisdiction over all passenger claims and disputes.


So what happened?


Ryanair cancelled a flight from Milan to Warsaw. As a result, among others, a Polish passenger was entitled to a refund of the ticket price. However, he transferred his claim to a Polish company “Passenger Rights”, which specializes in the recovery of air passengers' claims. The company filed a lawsuit in Warsaw claiming the refund for the ticket price.


If the passenger had filed a lawsuit against Ryanair, he could choose to do so in Italy, Poland or Ireland. In this case, however, the passenger assigned his claim to a non-consumer company. Ryanair argued that Passenger Rights, as a business, is obliged to comply with the terms and conditions of the contract of carriage, and accordingly can only bring an action in Ireland, and not in Poland. According to Ryanair, the claim is subject to the exclusive jurisdiction of the Irish courts, as contained in the agreement.

However, the Court of Justice of the European Union ruled in favour of the company specializing in debt collection. In particular, the court stated that "An air carrier may not invoke an agreement on jurisdiction over a debt collection company unless that company has entered into all the rights and obligations of the original party." In other words, if the passenger transfers, to a third party which is not a consumer, "only" their right to a claim, then the terms and conditions and the agreement on the jurisdiction of the courts under the contract of carriage do not apply, and the third party can sue according to the general rules. This principle will not apply if the passenger has transferred the entire contract of carriage to a third party other than the consumer, in which case the company would have to sue in Ireland.


The judgment brings new, interesting opportunities for ticket intermediaries and, in short, for all entities involved in the recovery of passengers' claims against airlines.