The background to the complaint

1. This complaint concerns the Commission's role in ensuring that Member States, in particular the national enforcement bodies ('NEBs'), correctly implement Regulation 261/2004/EC[1] on air passengers rights ("the Air Passengers Rights Regulation").

2. Article 16 ("Infringements") of the Air Passengers Rights Regulation provides that:

"1. Each Member State shall designate a body responsible for the enforcement of this Regulation ... Where appropriate, this body shall take the measures necessary to ensure that the rights of passengers are respected.

2. ... each passenger may complain to any body designated under paragraph 1, or to any other competent body designated by a Member State, about an alleged infringement of this Regulation ..." (emphasis added).

3. The complainant runs a commercial complaints handling agency ("Reisrecht") specialised in seeking compensation on behalf of air passengers[2]. He has been in correspondence with the Commission on a number of occasions with regard to the approach taken by the Belgian, German and Spanish NEBs on the enforcement of the Air Passengers Rights Regulation in some specific cases. These NEBs informed the complainant that, although they can initiate sanction proceedings for a breach of the Air Passengers Rights Regulation, they have no power to award individual passenger compensation. They advised that the passengers concerned should go to court. The Commission confirmed the position taken by the NEBs. The complainant did not agree with the Commission's position that the NEBs can take no action to guarantee that the Air Passengers Rights Regulation is correctly applied in the individual cases.

The subject matter of the inquiry

4. In his complaint to the Ombudsman, the complainant made the following allegation and claim:

Allegation:

The Commission fails to ensure that Member States implement EU law on air passenger rights correctly, because it does not insist that NEBs must be given power to enforce passenger rights and not merely the power to issue a non-binding opinion.

Claim:

The Commission should insist that NEBs have the power to enforce passenger rights and not merely the power to issue a non-binding opinion.

If it is the Commission's view that Article 16 of the Regulation does not require Member States to give NEBs the powers to enforce passengers' claims against air carriers, the Commission should review the complaints procedure and the information communicated to air passengers on its website so as to correctly reflect the powers of the NEBs and to correctly inform the passengers as regards the means of redress where an air carrier does not abide by the decision of the enforcement body.

The inquiry

5. The complaint was forwarded to the Commission for an opinion. On 21 June 2012, the complainant sent to the Ombudsman a report of the Dutch Ombudsman on the way the Regulation is enforced in the Netherlands. The Ombudsman forwarded the report to the Commission. The Commission sent its opinion on 20 November 2012. The opinion was then forwarded to the complainant, who sent his observations on 15 and 16 October 2013.

The Ombudsman's analysis and conclusions

A. Alleged failure of the Commission to ensure that NEBs enforce passenger rights

Arguments presented to the Ombudsman

6. In support of his allegation, the complainant argued that Article 16(1) of the Regulation clearly provides that the NEB shall take the measures necessary to ensure that the rights of passengers are respected where there is an infringement of the Air Passengers Rights Regulation. The complainant added that a non-binding opinion is not an effective measure.

7. In its opinion, the Commission explained that the Air Passengers Rights Regulation requires airlines to provide assistance (information, refreshments, accommodation and rerouting/refunds) to passengers when they are denied boarding, or when their flights are cancelled at short notice or suffer a long delay. Subject to certain qualifying criteria the Air Passengers Rights Regulation also requires the payment of compensation in situations of denied boarding and short notice cancellation.

8. It added that unlike situations of denied boarding or cancellation, the Air Passengers Rights Regulation does not expressly provide for compensation for delay. However, the Court of Justice of the EU has ruled that a passenger delayed in arriving at his/her destination by more than three hours may also be entitled to compensation under certain circumstances[3]. Nevertheless, the Air Passengers Rights Regulation permits an airline to refuse compensation provided it can demonstrate that the cause of such delay was due to "extraordinary circumstances" which it could not have avoided even if all reasonable measures had been taken. The Court of Justice of the EU has confirmed that it is for national courts to decide whether "extraordinary circumstances" apply.

9. As regards the enforcement of the Air Passengers Rights Regulation, the Commission pointed out that Member States are required to appoint a NEB to investigate potential infringements of the Air Passengers Rights Regulation. The Commission explained that the role of the NEB is to monitor the industry's application of the Air Passengers Rights Regulation in order to address issues of bad practice and identify possible trends of non-compliance that may amount to consumer harm. Where such a trend is established, an NEB will take appropriate remedial action, including sanctioning the airline for non-compliance. The penalties available are aimed at addressing the issue of collective harm, rather than providing individual redress. In assessing a complaint, NEBs will provide advice to passengers to help them to make an informed decision as to whether or not to pursue the matter in Court or through an alternative dispute resolution (ADR) service. Some NEBs facilitate that process by providing an opinion on an individual complaint that a passenger may use to support their claim. The advice or opinion given by the NEB is, however, not binding on the air carrier or the court. Therefore, when a passenger is dissatisfied with an airline's response to any claim for compensation, he/she has to pursue the matter directly through a national court or by means of ADR mechanisms. In some cases, passengers can also make use of the European Small Claims procedure, which aims to simplify the settlement of small cross-border disputes and to reduce their costs.

10. The Commission explained that a number of commercial complaint handling agencies, such as Reisrecht, offer to seek compensation on behalf of passengers, in return for a participation fee and a percentage of the compensation they obtain if the passenger's complaint is successful. However, passengers are not obliged to use such agencies to obtain redress, and can bring the matter before a national court themselves. Most Member States have simple procedures for small claims of this nature. Alternatively, passengers may use an ADR mechanism, national consumer organisations or the European Consumer Centre network, which provides its services free of charge, in case of cross border claims.

11. As regards the complainant's claim, the Commission stated that Article 16 and recitals 21 and 22 of the Air Passengers Rights Regulation oblige the Member States to appoint a NEB and to have in place effective, proportionate and dissuasive sanctions to allow a NEB to enforce the Air Passengers Rights Regulation in the collective interest of passengers. However, Article 16 of the Regulation does not require a Member State to give a NEB the power to enforce individual passenger claims against air carriers. While a small number of NEBs have a wider consumer protection role which allows them to consider individual passenger claims, there is no obligation in the Regulation for them play such a role. The Commission therefore has no power to compel Member States to require NEBs to enforce individual passenger claims. Passengers have the right to seek individual redress either through a court or an ADR mechanism. The opinion of an NEB may assist a passenger in pursuing such a claim.

12. The Commission underlined that it is the Member State's choice whether to give an NEB the power to enforce individual passenger claims against air carriers. While the Commission considers that the information given on its website is clear, it wishes to ensure that there is no ambiguity which is likely to cause consumer confusion. The individual redress process will however vary from Member State to Member State and it is therefore not possible to give complete information on that process at national level. The Commission however stated that it would prominently add on its website - such as in the complaints form and on the NEB contacts page - the following statement: "Please note that the competent authorities of Member States cannot in general take binding decisions on airlines in respect of individual complaints. If you are still not satisfied with the airline's response, even following the answer from the competent authority, you will have to pursue the matter in Court or through alternative dispute resolution procedures."

13. The Commission stated that it was grateful to the Ombudsman for having drawn this complaint to its attention. The Commission also pointed out that, following a public consultation, it was undertaking a review of the Regulation 261/2004 which covers the NEBs' tasks and role, and that a legislative proposal should be made at the end of 2012.

14. In his observations, the complainant stated that the Commission's reading that Article 16 of the Air Passengers Rights Regulation aimed at addressing "collective" harm rather than individual enforcement was incorrect. The complainant stated that this was contradicted by the very text of Article 16 and a judgment of the Tribunal of the North Netherlands of 11 July 2013. In the complainant's view, the Commission has a fundamentally wrong understanding of the scope of the enforcement duty of the NEBs. Moreover, the Commission's reading of Article 16 of the Air Passengers Rights Regulation is precisely not in the collective interest, since it means that only the infringements for which passengers pursue court action will be rectified, but not the infringements towards all the other passengers of the same flight.

15. The complainant also stated that the Commission's position was not in line with the judgment of the Court of Justice of the EU in Case C-344/04[4], in particular its paragraph 45 which states that: "It does not follow from these provisions, or from any other provision of the Montreal Convention, that the authors of the Convention intended to shield those carriers from any other form of intervention, in particular action which could be envisaged by the public authorities to redress, in a standardised and immediate manner, the damage that is constituted by the inconvenience that delay in the carriage of passengers by air causes, without the passengers having to suffer the inconvenience inherent in the bringing of actions for damages before the courts" (emphasis added by the complainant). The complainant also referred to the high level of passenger protection which the Air Passengers Rights Regulation aims to guarantee and which was underlined in the judgment in case C-581/10[5].

16. The complainant finally underlined that the Commission in its reasoning used the civil law notion of "claim" which is different from the notion of "immediate compensation" which does not require the intervention of a judge. The complainant pointed out that it can be difficult for a family to obtain compensation for the children also, since special procedural rules apply to them. Court action is thus not the appropriate remedy where the Air Passengers Rights Regulation is infringed.

The Ombudsman's assessment

17. The Ombudsman notes that the allegation to be examined is that the Commission fails to ensure that Member States implement EU law on air passenger rights correctly, because it does not insist that NEBs must be given power to enforce individual passenger rights, and not merely the power to issue a non-binding opinion.

18. Article 16(1) of the Air Passengers Rights Regulation provides that "Each Member State shall designate a body responsible for the enforcement of this Regulation as regards flights from airports situated on its territory and flights from a third country to such airports. Where appropriate, this body shall take the measures necessary to ensure that the rights of passengers are respected". Article 16(2) provides that "... each passenger may complain to any body designated under paragraph 1, or to any other competent body designated by a Member State, about an alleged infringement of this Regulation ..." (emphasis added).

19. The Ombudsman notes that the present complaint touches upon how Article 16 of the Air Passengers Rights Regulation should be interpreted: does it mean that the NEBs should be able to deal with individual complaints and claims for compensation from affected passengers or is the enforcement task of NEBs limited to the general supervision of air carriers in complying with the regulation, including the option to impose fines in case of infringements? Article 16 of the Air Passengers Rights Regulation is not entirely clear in this respect. The Ombudsman however notes that it is the Court of Justice which is the highest authority on questions of interpretation of EU law like the present one. However, the Court has not yet dealt with the question of what is, according to Article 16 of the Air Passengers Rights Regulation, the exact task of the NEBs.

20. The Ombudsman notes that Article 16 of the Air Passengers Rights Regulation does not explicitly state that NEBs should deal with individual claims for compensation from affected air passengers. On the other hand, Article 16(2) provides that air passengers may complain to a NEB, or to any other competent body, about an infringement of the Air Passengers Rights Regulation. Given that NEBs are "enforcement" bodies which, according to Article 16(1), shall "take the measures necessary to ensure that the rights of passengers are respected", it is at least arguable that this enforcement also implies that NEBs ensure that passengers who complain about an infringement of the Regulation and claim compensation are compensated when they fulfil the criteria for compensation set out in the Regulation and further developed in the case-law. Indeed, compensation is one of the rights of passengers set out in the Air Passengers Rights Regulation, the respect of which NEBs should ensure.

21. On the basis of the text of Article 16 of the Air Passengers Regulation as it currently stands, the Ombudsman is thus not convinced by the Commission's position that Article 16 of the Regulation does not require a Member State to give a NEB the power to enforce individual passenger claims against air carriers, and that passengers should instead turn to court or to ADR mechanisms. However, in view of the practice which has been followed for a considerable period of time now (whereby the Commission advises passengers to turn to court or to ADR mechanisms instead of to the NEBs[6]) and given, more importantly, that the Air Passengers Rights Regulation is being reviewed at present, the Ombudsman considers that no further inquiries into the complainant's allegation and claim, which relate to the current wording of Article 16, are justified at this stage.

22. The Air Passengers Rights Regulation is being reviewed under the ordinary legislative procedure (Article 294 of the Treaty on the Functioning of the European Union) and the issue which is subject of the present complaint - namely which body should deal with individual complaints or claims from air passengers - is part of that review. On 13 March 2013, the Commission published its proposal amending Regulation 261/2004[7]. Pursuant to the Commission's proposal, air carriers must provide efficient means to passengers for submitting complaints. Passengers will subsequently be able to turn to out-of-court complaint handling bodies which will treat the complaints within a reasonable time and which will act with the support of the NEBs[8].

23. The Ombudsman notes that Parliament adopted its position on the Commission's proposal at first reading on 5 February 2014[9]. Several amendments made by Parliament go in the direction of reinforcing the remedies passengers will have when their rights have been infringed. For instance, several of Parliament's amendments refer to Directive 2013/11/EU on consumer ADR[10]. Parliament's legislative resolution provides that air carriers will have to inform passengers of the bodies competent for handling passenger complaints (amendment 126). According to amendment 129, Member States shall ensure that air passengers are able to submit disputes with air carriers to independent and efficient out-of-court resolution mechanisms. To that end, each Member State shall designate a national body or bodies responsible for the out-of-court resolution of disputes between air carriers and passengers. The amendment makes clear that those bodies should be other than the NEBs. The amendment further underlines that Member States shall ensure that those out-of-court resolution bodies can act by means of decisions which are legally binding and enforceable.

24. Obviously, whether the above amendments will be maintained will depend on the position that the Council of the EU will take and on the subsequent further positions taken in the framework of the ordinary legislative procedure.

B. Conclusion

On the basis of her inquiry into this complaint, the Ombudsman closes it with the following conclusion:

No further inquiries are justified into the present complaint.

The complainant and the Commission will be informed of this decision.

 

Emily O'Reilly

Done in Strasbourg on 20 May 2014

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[1] Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 establishing common rules on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flights, and repealing Regulation (EEC) No 295/91, OJ 2004 L 46, p. 1.