Passengers' flight from Milan was cancelled due to pilot illness. The Supreme Court held that pilot illness is not an 'extraordinary circumstance' under EU Regulation 261/2004, so the airline must pay compensation. The Court also clarified that pre-Brexit accrued EU law rights form part of 'retained EU law' under the Withdrawal Act 2018.
Background
Mr and Mrs Lipton were booked on a BA Cityflyer flight from Milan Linate Airport to London City Airport on 30 January 2018. The flight was cancelled because the captain reported he was unwell approximately one hour before the scheduled departure, and no replacement pilot could be found. The Liptons were rebooked and arrived approximately 2 hours and 36 minutes late. They claimed €250 each in compensation under Regulation (EC) 261/2004 (‘Regulation 261’), which establishes minimum rights for passengers affected by flight cancellations. Cityflyer refused to pay, relying on the defence under article 5(3) of Regulation 261 that the cancellation was caused by ‘extraordinary circumstances’.
The claim was dismissed at first instance and on first appeal, both courts holding that the pilot’s illness constituted extraordinary circumstances. The Court of Appeal reversed those decisions, holding that pilot illness was not an extraordinary circumstance. Cityflyer appealed to the Supreme Court.
Between the date of the cancelled flight and the hearing in the Court of Appeal, the United Kingdom left the European Union, raising a significant secondary question about which version of the law applied to the Liptons’ pre-Brexit accrued cause of action.
The Issues
Ground 1: Meaning of ‘extraordinary circumstances’
Whether the sudden illness of a pilot, occurring shortly before a scheduled flight and unrelated to work, constitutes an ‘extraordinary circumstance’ within the meaning of article 5(3) of Regulation 261, thereby relieving the airline of its obligation to pay compensation.
Ground 2: Which law applies post-Brexit to pre-Brexit accrued causes of action
Whether pre-Brexit accrued causes of action under directly applicable EU regulations are carried forward as ‘retained EU law’ under sections 2, 3 and 4 of the European Union (Withdrawal) Act 2018 (the ‘Complete Code analysis’), or whether they survive independently by virtue of section 16 of the Interpretation Act 1978 (the ‘Interpretation Act analysis’). This determined which version of Regulation 261 applied and the status of CJEU case law in adjudicating the claim.
The Court’s Reasoning
Ground 2: The applicable law
Lord Sales and Lady Rose (with whom Lady Simler agreed) delivered the majority judgment. Lord Burrows agreed with the majority on both grounds, providing a concurring judgment on Ground 2. Lord Lloyd-Jones agreed on Ground 1 but dissented on Ground 2.
The majority held that the Withdrawal Act 2018 constituted a complete code governing the post-Brexit legal landscape. They concluded that section 3 of the Withdrawal Act 2018 was effective not only to bring forward the text of Regulation 261 as ‘retained EU law’ but also to carry forward accrued causes of action arising under it. Lord Sales and Lady Rose reasoned:
Section 3(1) has the effect that both (i) and (ii) continue to form part of domestic law after IP completion day. It follows from point (i) that the EU text of Regulation 261 continues to have prospective effect to govern new fact situations arising on and after IP completion day, subject of course to any changes introduced by domestic regulations such as the Air Passenger Regulations 2019. It follows from point (ii) that causes of action which have arisen under Regulation 261 by IP completion day continue to form part of domestic law – and so are required to be enforced – on and after that day.
The majority held that the Court of Appeal erred in applying the amended version of Regulation 261 (as modified by the Air Passenger Regulations 2019) to the Liptons’ pre-Brexit claim. They stated:
This is contrary to a basic principle of the rule of law which Parliament must be taken to respect, according to which it is the law in place at the time the material events occur which applies, rather than some different version introduced at a later date.
They further held that the Trade and Cooperation Agreement, as implemented by section 29 of the European Union (Future Relationship) Act 2020, did not have the automatic modifying effect on domestic law that Green LJ had suggested in the Court of Appeal. Lord Sales and Lady Rose observed:
Given that the aim of Brexit was to remove the influence of EU law from our domestic law, it would be entirely inconsistent with that aim and with the wording of article COMPROV.16 to interpret section 29 as having such an intrusive and automatic effect in our law.
On the consequences of the Complete Code analysis for section 6 of the Withdrawal Act 2018, the majority explained that because the Liptons’ accrued cause of action formed part of ‘retained EU law’, section 6 applied straightforwardly: the court was not bound by post-Brexit CJEU decisions but could have regard to them, and the Supreme Court had power to depart from pre-Brexit CJEU case law.
Lord Lloyd-Jones, dissenting on Ground 2, considered that accrued EU law rights were not transposed into retained EU law but survived as accrued rights in EU law by virtue of section 16 of the Interpretation Act 1978. He relied on the general presumption against retrospective legislation and argued that sections 2, 3 and 4 of the Withdrawal Act 2018 were intended only to have prospective effect. He also pointed to articles 4 and 127 of the Withdrawal Agreement as supporting his analysis.
Ground 1: Extraordinary circumstances
The Court unanimously dismissed the appeal on Ground 1, holding that the pilot’s illness did not constitute an ‘extraordinary circumstance’ within article 5(3). The Court applied the test from Wallentin-Hermann v Alitalia (Case C-549/07), which requires that an event, to qualify as extraordinary, must not be inherent in the normal exercise of the air carrier’s activity and must be beyond its actual control.
Lord Sales and Lady Rose agreed with Coulson LJ’s analysis in the Court of Appeal, holding that the non-attendance of the captain due to illness was an inherent part of Cityflyer’s activity. They drew an analogy with the treatment of mechanical defects:
A carrier’s operation depends on two principal resources: its people and its aircraft. Wear and tear of the aircraft and its component parts is not extraordinary. The wear and tear on people, manifesting itself in illness, should not be regarded as any different.
They further noted that the post-Brexit CJEU decision in TAP Portugal v Flightright GmbH (Joined Cases C-156/22 to C-158/22), while not binding, was persuasive and well in line with the pre-existing case law. In that case, the CJEU held:
operating air carriers may, as a matter of course, be faced, in the exercise of their activity, with the unexpected absence, due to illness or death, of one or more members of staff whose presence is essential to the operation of a flight, including shortly before the departure of that flight. Accordingly, the management of such an absence remains intrinsically linked to the question of crew planning and staff working hours, with the result that such an unexpected event is inherent in the normal exercise of the operating air carrier’s activity.
The Court also emphasised that the simplicity of the compensation scheme under Regulation 261 militated against permitting granular investigations into the precise circumstances of a crew member’s illness:
it is contrary to the scheme of the Regulation to allow the carrier to embark on a complex analysis of precisely when, why or how a staff member became ill so as to explain their absence and the subsequent cancellation of the flight.
Practical Significance
This decision is significant in two key respects. First, it provides authoritative guidance on the meaning of ‘extraordinary circumstances’ in the context of crew illness, confirming that airlines cannot rely on pilot sickness as a defence to compensation claims under Regulation 261. This brings clarity to a previously uncertain area and is consistent with the consumer-protective purpose of the Regulation.
Secondly, and of broader significance, the majority’s analysis on Ground 2 establishes (albeit technically obiter) that pre-Brexit accrued causes of action under directly applicable EU regulations form part of ‘retained EU law’ under section 3 of the Withdrawal Act 2018. This means that the regime in section 6 of that Act — including the Supreme Court’s power to depart from pre-Brexit CJEU case law — applies to such claims. The judgment provides important guidance for courts and tribunals at all levels dealing with the potentially very large category of pre-Brexit EU law claims still being adjudicated post-Brexit. The Court also corrected the Court of Appeal’s erroneous approach of applying the domestically amended version of Regulation 261 to pre-Brexit events and disapproved of Green LJ’s analysis regarding the automatic modifying effect of section 29 of the Future Relationship Act 2020.
Verdict: The appeal was unanimously dismissed. The Supreme Court held that the pilot’s illness did not constitute ‘extraordinary circumstances’ under article 5(3) of Regulation 261/2004, and accordingly Cityflyer was not relieved of its obligation to pay the Liptons compensation. By a majority (Lord Sales, Lady Rose, Lady Simler, and Lord Burrows; Lord Lloyd-Jones dissenting on this point), the Court also held that pre-Brexit accrued causes of action under EU regulations form part of ‘retained EU law’ under section 3 of the European Union (Withdrawal) Act 2018, and that it is the unamended EU text of Regulation 261 that governs such claims.
Source: Lipton and another v BA Cityflyer Ltd [2024] UKSC 24
