Denise McDonagh v Ryanair: CJEU comes down in favour of consumer protection

On 31 January, the Court of Justice of the European Union (CJEU) ruled in favour of an Irish woman against Ryanair over expenses incurred during the volcanic ash cloud crisis in the spring of 2010.

During the ash cloud crisis, Ms McDonagh’s return flight to Ireland was cancelled and she was stranded for a week in Portugal. She brought a claim against Ryanair in the Dublin Metropolitan District Court arguing that the airline 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 Irish Court referred a number of questions to the CJEU under the Article 267 preliminary reference procedure. The CJEU considered the following questions:

1. Whether the unusual nature of the circumstances (the volcanic eruption) exempted Ryanair from having to provide care in this situation;
2. Whether the regulation contains an implied limitation on the amount of care Ryanair needed to provide; and
3. If there were no exemption or limitation, whether the regulation was in violation of the principles of proportionality or non-discrimination under EU law; the freedom to conduct a business and the right to property under Articles 16 and 17 of the Union’s Charter of Fundamental Rights; or the principle of equitable balance of interests enshrined in the Montreal Convention, and thereby invalid. 

Ryanair argued that the airspace closure in April 2010 went beyond the existing concept of extraordinary circumstances and that ‘super extraordinary circumstances’ existed which released the airline not only from its compensation obligations but also the passenger’s right to care as set out in Articles 5 and 9 of the Regulation. The Court refused to recognise this separate category as it went against the ordinary meaning and the underlying consumer-protection objective of the regulation. The idea of temporal or monetary limitations on the air carrier’s protective obligation was also rejected as going against the very purpose of Articles 5 and 9.

The Court found that the Montreal Convention was not applicable to the question before the Court. Further the Court found that distinctions between different modes of transport (such as air, rail and road) were warranted in this instance and thus not discriminatory.

Of particular note is the airline’s reliance on the economic rights found in the EU’s Charter of Fundamental Rights. Ryanair claimed that an open-ended duty of care would deprive airlines of ‘part of the fruits of their […] labour and […] investment’ and was thus in violation of Articles 16 and 17 of the Charter. The Court found that neither the freedom to conduct a business nor the right to property were absolute and that their scope fell to be balanced against competing rights. Given the importance of consumer protection in Article 169 TFEU and the Charter’s own Article 38, the resulting balancing exercise came down in favour of the consumer.

The Court held that Ryanair had a duty to compensate Ms McDonagh for the consequences of its breach of her right to care with the precise level of expenses left as a matter for the referring court to assess.

Click here to read the judgment

Click here to read a UK Human Right blog article

Click here to read a Eutopia Law blog on the judgment

In other news concerning the EU Charter of Fundamental Rights, PILA last week held an interesting seminar on how the Charter may be used in practice. Click here for an overview of the seminar and to access the speaker's presentations.