Rights of passengers flying in or out of Switzerland in case of cancelations or delays

Rights of passengers flying in or out of Switzerland in case of cancelations or delays

Wednesday, 11 September, 2019

“The compensation of Swiss is bad” is the title of the Swiss tabloid magazine “20 Minuten” on 4 August 2019. The background to this is that Swiss airlines such as SWISS (Swiss International Airlines Ltd), Edelweiss (Edelweiss Air AG), etc. evidently regularly refuse to pay compensation for flights delays or flight cancellations on certain routes.

Unlike in Switzerland, in the EU, for such cases, REGULATION (EC) No 261/2004 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 11 February 2004 and the relevant case law of the European Court of Justice apply. These clearly specify which services and compensation the airlines have to pay in the case of delays and cancellations. The case law of the European Court of Justice is quite consumer-friendly, as delays of more than three hours regularly entitle the compensation payments (up to EUR 600) which were originally intended only for cancellations.

The EU regulation is directly applicable if a passenger is affected who started their flight from the EU or who commutes from a third country to the EU (the latter, provided that the flight is operated by an EU airline)

But what about someone starting their journey in Switzerland or traveling to Switzerland from abroad? Switzerland adopted the EU Regulation No 261/2004 in 2006, which is why the question should be easy to clarify. However, from a legal point of view, it not quite that straightforward, which is why the question of how passenger compensation will be implemented in Switzerland in accordance with EU Regulation No.261/2004 will be explored. Here, questions of jurisdiction, applicable law and applicable case law need to be clarified.1. Jurisdiction

1. If compensation is to be claimed, the first question is where this should be done. As a preliminary point, it should be noted that Regulation No 261/2004 does not contain provisions on the international jurisdictions of the courts of the Member States.

To make matters worse, neither the jurisdictions under the Montreal Convention nor the EU regulation No. 1215/2012 (Brussels I-VO) are applicable to compensation under EU Regulation (EC) No 261/2004 in Switzerland.

If an airline is to be prosecuted in Switzerland, the jurisdictions initially depends on Swiss law. While the question of jurisdiction under the Swiss Code of Civil Procedure is easy to clarify, with both plaintiff and defendant domiciled in Switzerland, it becomes more complicated in international circumstances. In that case, the jurisdiction of the courts is governed by the Swiss International Private Law (IPRG). In the case of international treaties, under certain circumstances, these have priority over the national IPRG. In the present case, in particular, the Lugano Convention plays a significant role, according to which Swiss airlines would have to be sued in their headquarters, i.e. Switzerland, pursuant to Article 2. This always applies if the plaintiff has their domicile abroad and wants to sue a Swiss airline. Furthermore, Art 5 provides for the place of jurisdiction at the place of performance of the contract, which, according to the EU case law, may be at the place of departure or arrival.

If a passenger abroad expects a better chance of success, he can bring a claim in a state bound by the Lugano Convention. A passenger from a third country, e.g., the USA, which flies from New York City with SWISS to Zurich, cannot make much use of this; they can still only sue in Switzerland

2. Applicable Law

Again, the case is straightforward if both the plaintiff and the defendant have their residence in Switzerland. If a passenger is residing abroad and wishes to sue a Swiss airline, the IPRG must be consulted. According to the Swiss IPRG, the law that the parties have agreed will always apply first. If no choice of law has been made, the legal relationship is governed by the law of the state in which the party which performs the service has its habitual residence. The performance of a contract of carriage lies in the transport which is to be provided by the airline based in Switzerland. Whenever a foreign passenger wishes to sue a Swiss airline, the claim will be governed by Swiss law. However, Swiss law also includes the international treaties that Switzerland has concluded. In addition to the Montreal Convention, this also includes the 1999 Aviation Agreement with the EU.

This agreement states that the so-called “Joint Committee”, which includes representatives from the EU and Switzerland, can incorporate regulations that emerged after the conclusion of the agreement into the aviation agreement. This is exactly what the Joint Committee did in 2006 with EU Regulation No 261/2004, which has made this Regulation directly applicable to Switzerland ever since.

As a result, according to Art 3 of the EU Regulation No 261/2004, compensation must always be paid if the flight concerned started in Switzerland or if it started from a third country to Switzerland and was carried out by a Swiss airline.

If a passenger flies from Zurich with American Airlines to Malé, the EU Regulation No 261/2004 applies accordingly. If he flies back with SWISS, the EU Regulation No 261/2004 would also apply. However, if he flies back with American Airlines, it is a flight from a third country to Switzerland, but one that is not carried out by a Swiss airline and therefore EU Regulation No 261/2004 would not apply.

Depending on the flight and the airline involved, EU Regulation No 261/2004 will apply accordingly in Switzerland.

3. Applicable Case Law

In principle, the case law of the ECJ is not binding on Switzerland. An exception exists only for those judgements that were made before the adoption of EU Regulation No 261/2004, since Switzerland already knew “what it was getting involved with”.

As a result, various cantonal courts did not follow the case law of the European Court of Justice, which was passed down after the adoption of EU Regulation No 261/2004. In Germany, for example, the benefits of compensation payments were denied in the event of a delay which lasted more than three hours. The ECJ dealt with such cases in the same way as cancellations and awarded the corresponding compensation. The courts in Switzerland has so far not followed this interpretation of EU Regulation No 261/2004

As a result, even with the applicability of EU Regulation No 261/2004 in Switzerland, the ECJ’s consumer friendly case law does not automatically apply: Law 1 – 2 Interpretations

4. Single Issues

a. Limitation

EU Regulation No 261/2004 does not express any limitation on passenger rights. The respective limitation periods are therefore governed by applicable national regulations. Which statute of limitations should apply in Switzerland is currently still controversial. The general limitation period under Art 127 OR provides for a (generous) statute of limitation of 10 years. After 10 years from the date of the cancelled or delayed flight, the claim for compensation under EU Regulation No 261/2004 will no longer be enforceable. Individual compensation, which is required on the basis of the Montreal Convention, is barred after two years. Accordingly, the two-year limitation period under Art 14 Lufttransportverordnung (LTrV) is declared applicable. This is in particular based on the argument that if the Montreal Convention considers the calculation and enforcement of specific damages to be feasible within a period of two years, all the more so in order to claim a flat-rate compensation.

b. Flat rate compensation vs Concrete damages

Article 12 of the EU regulation No 261/2004 states that the payment of compensation under the EU Regulation does not preclude further claims for damages. The latter is then governed by national law. It is still unclear whether the claims exist independently of each other, or whether compensation payments under the EU regulation would be included in the individual compensation. According to the view expressed here, the claims should be independent of each other, since otherwise all those passengers would be discriminated against which, apart from the mere cancellation/delay, had real monetary damage. The case law of the ECJ must also be interpreted in this direction, which makes a clear distinction between the compensation claim on the one hand and the compensation for delay damage on the other.

5. Conclusion

On the question of the extent to which passengers with legal personality can claim air passenger rights, the district court of Bülach in particular expressed its opinion in 2016. (FV150044-C / U AB / ad of 2 February 2016) Although the court dismissed the lawsuit for formal reasons, the court stated as obiter dictum that under Swiss law there would be no compensation for flight delays. Unlike the ECJ, the district court took the view that the payment of compensation for delays (of more than three hours) was not covered by the EU Regulation No 261/2004 and that the ECJ’s interpretation went too far. This verdict makes it clear that passengers in Switzerland, in contrast to other countries, are currently in a worse position.
The divergence of the Swiss case law from the ECJ without valid reasons is to be rejected, since Switzerland and the EU decided for economic interests to unify the law in the field of aviation. The acquired EU law thus enjoys the same democratic legitimacy as Swiss law. It should therefore not be deviated from existing, consolidated supreme court rulings without just cause, otherwise the goal of the bilateral agreements, the unification of the law, becomes impossible. It should also be noted that the refusal of EU case law is not a pro-Swiss decision based on the motto; “Swiss law instead of foreign judges”. The disadvantages caused to passengers in connection with flights to/from Switzerland are likely to affect a not insignificant proportion of passengers, especially Swiss. It is therefore not a pro-Swiss decision but a business friendly one (which in particular the owner of the major Swiss Airlines, German Lufthansa, should be pleased with). Since several cases concerning passenger rights are currently pending, it is hoped that the Swiss Federal Supreme Court will shortly clarify various questions regarding air passenger rights in Switzerland.