Author: Whitestone Chambers

Celebrities warned about social media conduct.

Whitestone Chambers
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Celebrities warned about social media conduct.

Sixteen UK based celebrities have entered into a formal agreement with the Competition and Markets Authority (CMA) stating that they will not continue to advertise brands on social media without declaring it to their followers and viewers.

The CMA launched an investigation after they discovered that numerous celebrities and online influencers were being paid to advertise products without declaring this to their impressionable fan bases. It found that paid product placements were not always being made clear, leading to fears that consumers could mistake them for personal recommendations from their online heroes.

The CMA have not gone as far to make a decision on whether the influencers actually breached consumer law but stated that all 16 had volunteered to change their practices.

The CMA said that if they failed to do so it could take out a court order against them, which could lead to fines and up to two years in prison if they break the conditions of the agreement.

Speaking on the government website https://www.gov.uk/government/organisations/competition-and-markets-authority Andrea Coscelli, Chief Executive of the CMA, said

“You should be able to tell as soon as you look at a post if there is some form of payment or reward involved, so you can decide whether something is really worth spending your hard-earned money on.”

Further guidance was expressed on https://www.gov.uk/cma-cases/social-media-endorsements which stated:

“Audiences need to know when an influencer has been paid, incentivised or in any way rewarded to endorse, promote, or review a product or service, including whether a product or service was given or loaned to them for free”.

All eyes will be on the 16, which includes celebrities ranging from Rita Ora to Made in Chelsea’s Mario Falcone to see if their online posts are demonstrably altered in the coming months. If not, time will tell how hard the CMA will come down on them.

                                     

© Whitestone Chambers

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law@whitetsonechambers.com

Whitestone Chambers
4 King’s Bench Walk
Temple, London, EC4Y 7DL
Tel: 020 7822 8822 Fax: 020 7822 8844
www.whitestonechambers.com

 

Top 10 Airlines – 2019 announced by AirlineRatings.com.

  1. Singapore Airlines
  2. Air New Zealand
  3. Qantas
  4. Qatar Airways
  5. Virgin Australia
  6. Emirates
  7. All Nippon Airways
  8. EVA Air
  9. Cathay Pacific Airways
  10. Japan Airlines

Singapore Airlines.

In 2018 Singapore Airlines came third place. Now they have overshadowed Qantas and Air New Zealand by taking first place. The Airline won ‘Worlds Best Airline 2019’ by AirlineRatings.com due to their innovation, new products and world-renowned inflight service. Singapore Airlines have also begun direct flights from Singapore to New York.

Air New Zealand.

Former five-time winner falls to second place with best premium economy and best Airline. The Airline has been busy increasing international and domestic markets.

Qantas.

Received third place, along with winning the best domestic service and best lounges. The Airlines customer approval rating is consistently high, and their innovations continue with lie-flat beds on all A330s that fly between domestic and regional international flights

Qatar Airways.

A new winner who won best catering and best business class. According to judges, the food is excellent and beyond mouth-watering even in Economy class.

Virgin Australia.

Australia’s second largest Airline took fifth place, with best cabin crew. Virgin Australia has added a new element to their traveling experience with Economy X, Premium Economy and standout Business Class.

Emirates.

The frequent Dubai Airline landed sixth place after securing Best Inflight Entertainment and Best Long-Haul in the Middle East. Emirates has been a leading airline, as well as benchmarking the industry.

All Nippon Airways.

All Nippon Airways or ANA came seventh place. Customers insist the Airline provides a very oriental experience and their attention to detail is astonishing.

EVA Air.

The Taiwanese Airline takes eighth place, thanks to their new routes, cabin innovations and new aircraft. They are known to be an exceptional Airline and a Premium Economy leader. This is what keeps EVA Air in the top 10.

Cathay Pacific Airways.

The Hong Kong based Airline has maintained their position in the top 10. AirlineRatings.com have said ‘The airline is byword for operational excellence’. The Airline was awarded best Business class in 2013 and 2015 combined with best Asia/Pacific airline.

Japan Airlines.

Is another well-known Japanese Airline competing against ANA Japan Airlines bagged the last spot coming in at number 10, research they represent all the things we love about the Orient, politeness, efficiency and incredible food

© 2019 Whitestone Chambers

www.whitestonechambers.com

law@whitestonechambers.com

Happy New Year & Cyber Security – 6 new steps to consider in 2019.

Malware attacks, data breaches, security hacks and microtargeted personalized advertising all formed part of the digital low life in 2018.

In order to keep up with the modern world, technologies must advance. So how does one keep up with security and software protection. With the commencement of 2019 and new software releases, here are a few tips on keeping your digital life free from manipulative use.

  1. Create boundaries and abide by them.

Research shows the best way to stay safe is by setting boundaries. Agree on what data you are happy to share involving online services and apps and stay bound to it. This is preparation for when you are asked to share data falling out of any agreement.  Consider reducing your time spent on online discussions and it may be useful to set a time limitation on digital security as it is endlessly time consuming.

  1. Setting filter trends.

People who find news on social media, set their social media feed trends. Due to this those people are unlikely to find news they disagree on as they will be displayed with articles they have previously shown agreement with. This isolates people in developing further views and reduces their chances of generating a different angle.

All Slides and Purple Feed are free online tools that display social media reports and news reports involving different political perspectives. The information comes from across the political spectrum and does not replicate previous search histories.

  1. Having a safe password.

The strength of your password does not determine the safety of your account, as people tend to reuse their passwords for many accounts. It is known that researchers are notified when a reused password has been leaked. Therefore, it is highly recommended to use different passwords. A password manager software can be used to detect hacks. (Do read our article on pin numbers)

  1. Using a multi-factor authentication.

Having an additional pin number, when logging into your financial accounts, social media and emails adds a lot more protection. Multi-factor authentication sends you a six-digit pin code as part of your log in process. For more protection you can even consider a code-generating app.

  1. Deleting apps you no longer use.

Apps loaded on your phone track you and provide your information to marketing and advertising agencies. Therefore, if you no longer use an App delete it and if you need it again, redownload it. This reduces companies tracking where you go, time spent at locations and identity recognition.

  1. Updating the apps you use.

Useful advice provided by experts is to ensure software on your computers and apps on your phone are always kept up to date.

These 6 ideas will help reduce the chances of hackers exploiting your data and allow you to keep safe and on high alert in 2019.

 

© 2019 Whitestone Chambers

www.whitestonechambers.com

law@whitestonechambers.com

 

As 2019 starts up – Whitestone looks back at the top stories of 2018.

  1. Apple and Samsung’s ongoing legal battle is over.
    A legal battle that nobody thought would ever end. Eventually both tech companies settled out of court after arguing all the way up to the supreme court for seven years. The dispute was over ‘stolen tech’.
  1. Supreme Court weighs in on location data.
    The Supreme Court ruled that if your past location data needs to be accessed, the law enforcement must attain a warrant. Prior to this, authorities were able to retrieve the data from a third party with access to that data.
  1. The death of Stephen Hawking.
    Stephen Hawking died at his home in Cambridge on 14/01/2018. He died at 76 after having suffered from Motor Neurone Disease. He was a remarkable physicist and an author.
  1. 2018 World Cup winners.
    France won the World Cup 2018 final in a six-goal battle against Croatia. France last won in 1998, when they hosted their winning tournament. England had a successful but ultimately disappointing tournament losing out in the semi finals to Croatia.
  1. A Royal wedding.
    The Duke and Duchess of Sussex tied the knot at Westminster Abbey on 19/05/2018. 29 million viewers watched the wedding.
  1. Salisbury poisoning.
    An ambulance found an ex Russian spy and his daughter severely ill on a bench in Salisbury. It has been said they were poisoned by a nerve agent in an attack by the Russian State. Their condition was critical for weeks, they have been since discharged and now they live in a secure location.
  1. Iceland ensures equal pay for men and women.
    Iceland became the first nation to make paying men more than women illegal. Passed on Women’s Day the year earlier, the bill makes it mandatory for companies employing 25 or more workers to pay men and women equally.
  1. Last male northern white rhinoceros dies.
    Sudan died at the Ol Pejeta Conservancy in Kenya. Now only two female species remain they are his daughter and granddaughter. There is no hope for more of the spices, unless alternative IVT techniques are developed.
  2. Thai cave rescue comes to successful end.
    Members of a junior football team were found trapped in a cave in Chiang Rai Province. The incident happened due to heavy rainfalls. However they were safely rescued 18 days later. The Elon Musk story will rumble on in 2019.

 

 

Happy New Year  –  United Airlines ban puppies and kittens from flights

As of January 7th, 2019, United Airlines have banned ALL emotional support animals on long haul flights. United Airlines has recently decided to forbid animals on flights under the influence of Delta. Delta is their biggest competitor who prohibited puppies and kittens on board in December 2018.

United is only allowing emotional support cats and dogs to attend flights no longer than eight hours. Puppies and kittens under four months are not permitted to travel on any flights. The new enforcement is effective from January 7th, 2019. However, United has made allowances for passengers travelling with animals who booked before January 3rd.

However miniature horses and cats and dogs acting as service animals will be accepted on board.

Support and service animals can fly for free in the States under the 1986 Air Carrier Access Act.

Due to the growth of animals now attending flights with passengers, airlines have incurred several incidents including soiled cabins, attacks and allergies. It is said that an increase of these events is forcing airlines to impose these rules.

United Airlines Stated: “We have seen increases in onboard incidents on longer flights involving these animals, many of which are unaccustomed to spending an extended amount of time in the cabin of an aircraft.” (https://www.independent.co.uk/travel/news-and-advice/united-airlines-emotional-support-animals-banned-flights-delta-puppies-kittens-a8710901.html)

Delta stated daily they flew 700 animals with passengers including snakes and spiders.

A United Airlines passenger attempted to board to Los Angeles with an emotional support peacock named Dexter in 2018. She even tried to purchase a ticket for him, however he did not satisfy the weight and size guidelines, so she was refused.

International airlines outside the U.S.A. do not recognise emotional support animals. However, service animals assisting disabled passengers are permitted to travel usually without any additional cost.

As regards Wayne Rooney flying into Dulles, well that was an entirely different emotional support package.

 

How ‘common’ is your ATM pin?

It is a common fact that people are naturally bad at selecting tedious and obscure personal identification numbers (PIN). The most common PIN is the staggeringly predictable  ‘1234’.Whilst that is bad, the list of top 15 most common PINs is also an obvious read.

Top 15 pins;

  1. 1234
  2. 1111
  3. 0000
  4. 1212
  5. 7777
  6. 1004
  7. 2000
  8. 4444
  9. 2222
  10. 6969
  11. 9999
  12. 3333
  13. 5555
  14. 6666
  15. 1122 (https://gizmodo.com/5946582/the-20-most-common-pins-are-painfully-obvious)

Yet people still think they have a ‘tough enough’ PIN, despite most people’s being entirely guessable. The percentage of PIN hacks has increased in 2018 by 12% leaving it at 54%.. Let’s hope we can reduce this percentage in 2019.

So, how to come up with a good PIN? First tip, avoid all the choices above! Pick something slightly more mysterious. For example the year or date of a memorable trip you took, the year a particular country  won the world cup, the last four digits of your work/mobile number or even your childhood home phone number.  Choosing the most obvious PIN is problematic for bank cards, phones, computers and even PIN locks. It is common knowledge now that people tend to use memorable dates backwards, so this should also be avoided.

So, be smart, be creative and stay safe.

 

The potential impact of Brexit on the e-commerce sector

The potential impact of Brexit on the e-commerce sector

Commercial analysis: Adam Richardson, barrister at Whitestone Chambers, assesses the implications for practitioners advising on the e-commerce sector, in both a withdrawal agreement scenario, and a no deal Brexit scenario.

 

What is the current situation?

The current circumstances surrounding e-commerce regarding provisions of goods and services were harmonised under various EU Directives, but primarily the E-commerce-Directive 2000/31/EC. The purpose of the Directive is to remove obstacles to cross-border online services in the EU and provide legal certainty to businesses and citizens in cross-border online transactions. Present harmonisation has allowed easy, transparent trade between nation states within the EU. What are the potential legal implications of Brexit for the e-commerce sector under the withdrawal agreement scenario and no deal scenario?

Withdrawal agreement scenario

On 19 March 2018 the draft withdrawal agreement was published. It is important to first note that this document is a draft and a loose one at that. It is arguably more of a diplomatic document than legal effect but gives an indication of the direction of travel the EU intends to take within the negotiations ahead. Regretfully, this still leaves a great deal of uncertainty, particularly for those within the ecommerce sector–in fact it provides very little clarity or comfort for those in the sector.

With growing uncertainty surrounding a withdrawal agreement scenario, it is increasingly unclear what requirements will be beholden on the UK after 29 March 2019. The draft agreement does make clear certain provisions.If the text and the duration of the transition period remain unchanged, the UK would be subject to EU data protection legislation, including the General Data Protection Regulation (EU) 2016/679 (GDPR) until 31 December 2020.

It also makes provisions for the ongoing protection of personal data through compliance with various pieces of existing legislation that will apply to data processed in accordance with EU law before the end of the transition period or processed in the UK after the transitional period has ended, but on the basis of the withdrawal agreement as written.

Data will continue to be shared for the purposes of law enforcement and regulatory functions. The same is true of obligations concerning data confidentiality, data restrictions, data limitations and data retention, which will apply to data obtained before the end of the transition period, or on the basis of the withdrawal agreement itself.

This will have very little impact on the e-commerce sector during the transitional period other than to guide on how data must be handled in some transactions prior to and subsequent to the end. Outside of that, based on the current draft of the withdrawal agreement the difference between the withdrawal agreement scenario and no-deal scenario are at present not broadly different until specific provisions are negotiated for the e-commerce sector.

The e-commerce Directive is not specifically mentioned in the documents itself.

No deal scenario

A no deal scenario is the less uncertain eventuality. Without specified terms negotiated in the final withdrawal agreement, the UK would either need to negotiate specific terms with EU countries or in the meantime revert to World Trade Organization (WTO) rules presently described as:

‘The WTO Work Programme on Electronic Commerce covers all issues related to trade arising from global e-commerce, including enhancing internet connectivity and access to information and telecommunications technologies and public internet sites, the growth of mobile commerce, electronically delivered software, cloud computing, the protection of confidential data, privacy and consumer protection. The programme also explores the economic development opportunities afforded by e-commerce for developing countries, particularly least-developed countries.’

This Work Programme on Electronic Commerce was convened in 1998 and has still not produced a definitive internationally codified set of rules. As a result, this has been criticised as out of date as recently as 13 December 2017 at the Ministerial Conference in Buenos Aires, where 71 members said they would initiate exploratory work towards future WTO negotiations on trade-related aspects of electronic commerce, with participation open to all WTO members. Proponents said a first meeting would be held in the first quarter of 2018. Together, the group accounts for around 77% of global trade. But it is doubtful that any meaningful measures would be in place by 29 March 2019.

Given Brexit and uncertainties surrounding the withdrawal agreement scenario and future trade arrangements, how are practitioners adapting their advice to clients?

It is essential that practitioners are at the forefront of developments. The greatest amount of certainty anyone can have would be based on breaking news developments as the negotiations continue. The amount of high politics surrounding these negotiations is damaging for confidence and damaging for practice.As with all industries, a select few practitioners will lead the field and help establish the ‘cutting edge’ but until further information is forthcoming practitioners must advise frugally and cautiously.

Are there any related issues which practitioners advising on the e-commerce sector should consider?

There may be some merit in preparing for the worst and therefore establishing platforms to engage with the rest of the world. In a no-deal scenario, e-commerce would have to rely on either individual agreements with the respective member state, compliance with the general European Economic Area standards as a minimum requirement or conforming to WTO rules. This would be no different from how e-commerce currently engages with the USA, the East and the Commonwealth. While a front-loaded exercise, it is likely to be rewarding in the long run to have an adaptive e-commerce platform capable of translating currencies regardless of whichever scenario comes to bear as the UK will be free to forge trade agreements with the rest of the world.

 

This article was first published on Lexis®PSL Commercial on 1 August 2018.

 

 

Does the house always win? Not if responsibility isn’t voluntarily assumed

Does the house always win? Not if responsibility isn’t voluntarily assumed

Banca Nazionale del Lavoro SPA v Playboy Club London Limited and others [2018] UKSC 43

Whilst a trial judge had found that duty of care is owed to a party’s undisclosed principle, the Court of Appeal disagreed. The issue before the Supreme Court was whether a bank was liable for a negligent credit reference to an undisclosed principal whom had relied upon it.

Pursuant to their policy, Playboy Club London, (‘the Club’), requires credit references for the use of their cheque-cashing facilities at their club. However, to avoid disclosing the purpose of the reference, the Club utilises Burlington Services Ltd, (‘Burlington’) to request these references from the banks of gamblers.

In October 2010, Hassan Barakat wished to gamble in London. Being ‘on behalf of Burlington’, the Club’s bank forwarded his authorisation to BNL to provide ‘a reference on [him] to Burlington’. BNL confirmed to the Club’s bank that Mr Barakat was trustworthy and the “information is given in strict confidential” (sic).

In reliance on this, the Club granted Mr Barakat the cheque cashing facility, in which he drew two cheques for £1.25million. After Mr Barakat returned to Lebanon, the Club lost £802,940 when both cheques returned unpaid. It was common ground that BNL had no reasonable basis for the reference as Mr Barakat opened an account with nil balance 2 days after the reference was sent.

The Supreme Court examined the landmark authority of Hedley Byrne v Heller & Partners [1964] AC 465,whereby it was inferred that Hedley Byrne’s bank was acting for its client and not itself for the purposes of entering into a particular transaction, hence Heller had voluntarily assumed responsible for the credit reference.

Additionally, Caparo Industries v Dickman 1990] 2 AC 605 was considered, in which the foundation of the duty was held to be ‘proximity’, which required more than mere foreseeability of reliance. The Defendant must know that the statement would be communicated to the Claimant and that they would likely rely on the statement to enter into transactions. To prevent the Defendant from owing a duty to the world at large, the Claimant must be an identifiable individual or class.

Further, Lord Sumpton was not persuaded by the Club’s ‘undisclosed principle’ comparison on the basis that legal incidents of contractual relationships could not be imported into tortious relationships. Thereby, the Supreme Court dismissed the Club’s appeal and held that BNL had not voluntarily assumed responsibility because BNL did not know that the statement would be communicated and relied on by the Club since it was sought by the Club’s bank ‘on behalf of Burlington’ only.

Despite the lack of sympathy for BNL, this judgment is welcomed as a helpful reiteration of the stringency of the Hedley Byrne principle. Banks cannot be liable to strangers for any purpose for unlimited periods of time, therefore to satisfy the Hedley Byrne ‘special relationship’ requirement, it is prudent to ensure that the particular transaction and person likely to rely on the statements are both known to invoke a proximate relationship which would give rise to a duty of care.

Lastly, voluntary assumption of responsibility has once again been upheld as a fundamental pillar of duty of care, whereby courts are reluctant to impose duty where ‘proximity’ is not established. This judgment thereby serves as a warning that liability will arise if the person likely to rely on the statement is identifiable and the purpose of the representation in connection with a particular transaction is known.

Hall Fire Melts Away Frozen-Food Company’s £6.6 million Claim

  1. In Goodlife Foods Limited v Hall Fire Protection Limited [2018] EWCA Civ 1371, the Court of Appeal held that the express alternative of insurance meant that a ‘far-reaching’ exclusion clause was reasonable pursuant to Unfair Contract Terms Act 1977.

  1. Goodlife, a frozen-food production company, purchased a fire detection and suppression system from Hall Fire a year after being provided with a quotation. Not only were Hall Fire’s T&Cs attached to both the quotation and acknowledgment of order, but also the face of the quotation drew attention to Clause 11, which read:

 

‘We exclude all liability, loss, damages or expense consequential or otherwise caused to your property, goods, persons or the like, directly or indirectly resulting from our negligence or delay or failure or malfunction of the systems or components provided by HFS for whatever reason.

In the case of faulty components, we include only for the replacement, free of charge, of those defected parts.

As an alternative to our basic tender, we can provide insurance to cover the above risks. Please ask for the extra cost of the provision of this cover if required.’

 

  1. A decade later, Goodlife claimed negligence against Hall Fire for a fire which caused property damage and business interruption losses. The first instance judge found that the exclusion clause was incorporated and satisfied the s11 ‘reasonableness’ test pursuant to UCTA 1977.

  1. At the appeal, three issues were raised:

Issue 1a): Was Clause 11 particularly unusual and/or onerous?

Issue 1b): Even if it was, was it fairly and reasonably brought to the attention of Goodlife?

Issue 2): If Clause 11 was incorporated into the contract, was it unreasonable (and therefore ineffective) as a result of the operation of UCTA?

 

Issue 1a

  1. Despite being ‘at the far-reaching end of the spectrum’, there was real, albeit limited, value to the warranty, thus Clause 11 was not a ‘blanket’ exclusion clause. Critically, the court observed the norm of commercial practice and found protection against unlimited liability in one-off supply contracts to be reasonable.

Issue 1b

  1. Submissions made against notice were deemed ‘commercially unrealistic’. The ‘almost apocalyptic’ terms were not hidden in small print; rather, it was on the front of the quotation and provided with the purchase acknowledgement a year later. The court found that Goodlife had ample time to understand the T&Cs, therefore even if issue 1a were unsatisfied, Clause 11 was fairly and reasonably brought to their attention.

Issue 2

  1. With reference to the ‘reasonableness’ guidelines, Schedule 2 UCTA, the court was persuaded by the parties’ similar bargaining positions and the express alternative of insurance to hold that Clause 11 satisfied the s11 ‘reasonableness’ test.

  1. The court warned against judicial intervention in freely-agreed contracts and reinstated that UCTA was intended to protect vulnerable parties against unconscionable behaviour.

  1. Further, the court stressed the importance of identifying the party ‘best-placed to effect the necessary insurance’. The court held that Goodlife had the opportunity of wider protection but risked accepting the basic tender. The availability of insurance was hence ‘at the heart of the reasonableness issue’. 
  2. This decision is welcomed as the court upheld ‘party autonomy’ as a fundamental pillar of English commercial law. Where equal-powered parties freely contract, it is these parties who are the best judge of commercial fairness and allocation of risk. The court should only interfere to protect vulnerable parties and will always consider commercial realities and industrial practices.
     
  3. Lastly, the court’s emphasis on insurance serves as a caution to ensure that express alternatives to exclusion clauses are appropriately incorporated to avoid the clauses being found ‘unreasonable’. Setting out ‘almost apocalyptic’ terms certainly saved Hall Fire on Judgment Day.

Christopher Hanges ©

20 July 2018

ch@whitestonechambers.com

 

Chambers of Lawrence Power

4 King’s Bench Walk, Ground Floor,

Temple, London, EC4Y 7DL

Tel: 020 7822 8822

A striking decision? Industrial action ruled not extraordinary by European Court

The CJEU holds that compensation under Regulation 261/2004 is payable by carrier for delays or cancellations caused by its own employees’ wildcat strike

1. On the 17 April 2018, the Court of Justice of the European Union(“CJEU”) handed down judgment in the joined cases of Helga Krüsemann and Others v TUIfly GmbH (“Krüsemann”) [1,2].

2. The applicants in the proceedings all had bookings with TUIfly for flights provided by the carrier between 3 and 8 October 2016. All those flights were cancelled or subject to delays equal to or in excess of three hours upon arrival due to an exceptionally high number of absences on grounds of illness amongst TUIflystaff, following the carrier’s notification to its staff of company restructuring plans.

3. The CJEU noted that whilst absenteeism due to illnessa mong TUIflystaff was typically around 10% of the workforce,between 1 and 10 October 2016 that rate increased to between 34% to 89% in the case of cockpit crewstaff and of 24% to 62% in the case of cabin crewstaff.

4. Accordingly, from 3 October 2016 TUIfly fully abandoned its initial schedule offlights, while making sub-chartering arrangements with other air carriers and recalling staff members who were on leave. Despite these measures, however, over 50 flights between 3 and 6 October 2016 were cancelled and all flights departing from Germany were cancelled on 7 and 8 October 2016.

5. On the evening of 7 October 2016, TUIfly’s management informed its staff that an agreement had been reached with the staff representatives and thereafter the strike ended.

6. The European Court was therefore asked to rule on whether the situation between 1 October and 8 October 2016 could be classified as “extraordinary circumstances” within the meaning of Article 5(3) of Regulation (EC) No. 261/2004 (“the Regulation”), such that compensation provided for in Article 5(1)(c)(iii) and Article 7 of the Regulation was not payable.

The Court’s decision

7. After tackling a challenge to the admissibility of the references, the Court gave short shrift to the idea that the industrial action on the part of TUIfly’s staff amounted to extraordinary circumstances within the meaning of the Regulation.

8. Whilst noting that Recital 14 of the Regulation stated that extraordinary circumstances may occur ‘in cases of strikes that affect the operation of an operating air carrier’, the CJEU referred to it having previously held that the circumstances referred to in Recital 14 were ‘not necessarily and automatically grounds of exemption from the obligation to pay compensation’ (referring to Wallentin-Hermann, C-549/07, paragraph 22), consequently, it was necessary ‘to assess, on a case by case basis, if it fulfils the two cumulative conditions’ as confirmed in Pešková and Peška (C-315/15), namely whether the events in question were, by their nature or origin, not inherent in the normal exercise of the activity of the air carrier concerned and are beyond its actual control [3].

9. Having repeated the well-established principle that, as a derogation from a regulation offering a high level of protection for passengers, Article 5(3) must be interpreted strictly, the CJEU observed that the spontaneous nature of the industrial strike – a “wildcat” strike [4] – had its origins in the carrier’s ‘surprise announcement of a corporate restructuring process’ [5].

10. The CJEU took the view that such ‘restructuring and reorganisation of undertakings are part of the normal management of those entities’ [6] and that carriers ‘as a matter of course, when carrying out of their activity, face disagreements or conflicts with all or part of their members of staff’ [7]. Accordingly, such events were inherent in the normal exercise of TUIfly’s activities and were within the actual control of the carrier because the strike ceased following an agreement that it concluded with staff representatives [8].

What impact?

11. Prior to this decision it was commonly considered that wildcat strikes, even amongst a carrier’s own workforce, could be regarded as “extraordinary circumstances”. Now it is clear that only industrial action by third parties, caused as a result of actions also taken by third parties, might be capable of falling within the example found in Recital 14. However, as always, much will depend on whether a carrier is able to show that such events are not inherent in the exercise of its normal activities and were beyond its actual control, and that no reasonable measures taken by the carrier could have avoided the strike or the cancellation/delays caused.

Lawrence Power © cl@whitestonechambers.com

[1] Joined Cases C-195/17, C-197/17 to C-203/17, C-226/17, C-228/17, C-254/17, C-274/17, C-275/17, C-278/17 to C-286/17 and C-290/17 to C-292/17.

[2] http://eur-lex.europa.eu/legalcontent/EN/TXT/?qid=1395932669976&uri=CELEX:62017CJ0195 

[3] Paragraph 32 of the judgment.

[4] The phrase having been adopted by the CJEU in its judgment.

[5] Paragraph 38.

[6] Paragraph 40.

[7] Paragraph 41.

[8] Paragraph 44.