Supreme Court Judgment on scope of ‘extraordinary circumstances’ defence in Regulation 261 claims and Post-Brexit Legal Order

Lipton v BA Cityflyer [2024] UKSC 24

The Supreme Court has today handed down Judgment in Lipton v BA Cityflyer [2024] UKSC 24, providing an important judgment on (i) the scope of the ‘extraordinary circumstances’ defence contained with Regulation (EC) 261/2004; and (ii) how rights accrued under an EU Regulation prior to Brexit operate post-Brexit.

The case arose out of a flight from Milan to London in January 2018 operated by BA Cityflyer. The flight was cancelled because the pilot did not report for work due to illness- it was not possible to provide a replacement in time for the flight to depart. The Liptons brought a claim under Regulation 261, BA Cityflyer defended the claim on the grounds that the illness of the pilot constituted ‘extraordinary circumstances’ within the meaning of the regulation.

The Liptons’ claims were dismissed at first instance and on first appeal. The Liptons appealed to the Court of Appeal. By the time the matter reached the Court, the UK had left the European Union. The Court of Appeal allowed the appeal, giving judgment on the ‘extraordinary circumstances’ issue in the Liptons’ favour and on how the Liptons’ rights under the regulation accrued post-Brexit.

BA Cityflyer appealed to the Supreme Court on two grounds, firs, whether the pilot’s illness constituted ‘extraordinary circumstances’ within the meaning of the regulation (ground one) and second, as to how the Liptons’ accrued cause of action operated and what law therefore applied to the dispute (ground two).

The Supreme Court unanimously dismissed BA Cityflyer’s appeal.

As to ground one, the ratio is relatively straightforward: delays or cancellations arising from short-notice ill health by aircrew/staff will not constitute extraordinary circumstances. The Supreme Court largely followed the reasoning of the Court of Appeal, though they drew support from the (post-Brexit) judgment of the CJEU in TAP Portugal C-156/22.

Ground two is decidedly more complex and may have far wider ramifications.

The Court had to determine how the European Union (Withdrawal) Act 2018 (EUWA 2018) applied to cases where the cause of action ‘accrued’ prior to Brexit but the matter came to be determined after the UK had left and the ‘implementation period’ had passed’. The parties put forward competing analyses as to how EUWA 2018 applied to the case. A majority in the Supreme Court preferred the analysis contended for by the Respondents- the ‘Complete Code Analysis’. The majority found that EUWA 2018 dealt comprehensively with how EU laws and rights were to be applied in the UK following the end of the implementation period. Section 3 of EUWA 2018 carried forwards the Liptons’ claim, the effect of this provision was to bring into effect post-Brexit both Regulation 261 as ‘retained EU law’ and any causes of action which had arisen under it.

In a dissenting judgment, Lord Lloyd -Jones preferred the ‘Interpretation Act analysis’ put forward by the Appellant. By this analysis, EUWA 2018 was prospective in effect such that claims had accrued prior to Brexit were unaffected. According to this analysis, the Liptons’ cause of action was preserved by section 16 of the Interpretation Act 1978, which provided that, unless the contrary intention appeared, the repeal of an enactment does not impact rights accrued under that enactment.

The Majority agreed that the ‘Complete Code analysis’ was consistent with the fundamental aims and purposes of EUWA 2018- to provide comprehensively for the post-Brexit landscape. Further, they considered that the “Interpretation Act’ analysis posed various difficulties, not least that the ability of domestic courts to depart from pre-Brexit CJEU case law might be postponed for many years.

Max Archer acted for the successful Respondents in this matter. He was instructed by Oliver Studdert and Demetrius Danas of Irwin Mitchell LLP alongside Michael Rawlinson KC and Daniel Isenberg.

To view the judgment, please click here. 

See more:

Watch hearing (6 February 2024) Morning session / Afternoon session

Judgment Summary

Law Society Gazette

Barristers

Max Archer