Kenneth and Linda Lipton, who sought around £220 in compensation for their cancelled flight under Regulation (EC) 261/2004, originally had their claim against BA Cityflyer Ltd rejected at County Court level, however the Court of Appeal found in their favour. Cityflyer therefore appealed to the Supreme Court.

The appeal was heard by Lord Lloyd-Jones, Lord Sales, Lord Burrows, Lady Rose, and Lady Simler. Ahil Shah KC and Nicolas Damnjanovic appeared for the appellant. Michael Rawlinson KC, Max Archer, and Daniel Isenberg appeared for the respondents. The Civil Aviation Authority as interveners were represented by Kevin De Haan KC and Michael Coley.

External to the airline

On 30 January 2018, the Liptons were due to board a flight operated by the appellant from Milan to London. However, their flight was cancelled because the pilot reported an hour before the flight’s departure time that he was unwell, and no replacement could be found in time. The respondents were rebooked onto another flight and arrived in London around 2.5 hours later than expected. A claim for compensation for €250 (around £220) was put in by the respondents, which the appellant refused to pay.

Under Regulation 261, an air carrier has a defence against a compensation claim for a cancelled flight if it can show that the cancellation was the result of “extraordinary circumstances”. The judge at the first hearing of the case in Portsmouth County Court held that this defence had been established and dismissed the respondents’ claim. On appeal to Winchester County Court, it was held that if the cause was external to the airline, it had no control over the cause and thus it must be an extraordinary circumstance.

At the Court of Appeal, Coulson LJ disagreed with the conclusions of the courts below as to the meaning of “extraordinary circumstances”. In support, he cited a post-Brexit decision of the CJEU, TAP Portugal v Flightright GmbH (2023), in which the entire crew of a plane declaring themselves unfit to fly following the sudden death of the co-pilot was held not to constitute extraordinary circumstances as the management of unexpected absences was held to be inherent in the carrier’s activities.

An alternative ground of appeal concerned the effect of the UK’s withdrawal from the European Union on the respondents’ ability to claim compensation. Whilst it was common ground that Brexit had not extinguished the cause of action, the parties disagreed about why this was, and what law ultimately fell to be applied to the claim.

Inherent part of activity

Delivering the leading judgment, with which Lady Simler agreed, Lord Sales and Lady Rose said of the applicable law: “We conclude that the Liptons’ cause of action accruing on the day their flight was cancelled is enforceable post-Brexit pursuant to section 3 of the European Union (Withdrawal) Act 2018 and therefore forms part of ‘retained EU law’.”

They explained further: “The legal and political imperatives behind the enactment of the Withdrawal Act point in favour of sections 2 to 6 bringing about a complete shift of all relevant EU legal regimes into the new purely domestic framework. There is no distinction between the enactment brought forward and the causes of action which have accrued under that enactment.”

Turning to the pattern of case law, the judges said: “We consider that TAP Portugal is persuasive authority which strongly supports the contention of the Liptons that the illness of the captain of their flight is a matter which the airline would be expected to cope with in the ordinary course of managing its business, as a matter inherent in the conduct of that business. Therefore, Cityflyer cannot satisfy the inherency test limb of the approach to interpretation of ‘extraordinary circumstances’ in article 5(3).”

They concluded: “It is Cityflyer who has the burden of proving that the captain’s non-attendance due to illness fell within the concept of ‘extraordinary circumstances’ in article 5(3). We agree with Coulson LJ that for the six inter-linked reasons he gives Cityflyer fails to show that the situation in this case falls within that concept. As he observed, the non-attendance of the captain due to illness was an inherent part of Cityflyer’s activity and operations as an air carrier and could in no way be categorised as extraordinary.”

The appeal was therefore dismissed, with all five judges in agreement on the substantive issue of whether the appellant had a valid defence.