New preliminary question on Sturgeon and Montreal, Part II

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In my previous post I discussed whether Sturgeon violates the Montreal Convention’s exclusivity. Another question is whether Sturgeon violates the Convention’s requirement that damages for delay must be awarded solely on a compensatory basis. A number of national courts have asked the European Court whether Sturgeon compensates real damage or rather requires airlines to pay more than the damage passengers actually suffer.

The European Court’s answer to these pending questions can be twofold. The strongest distinction between Montreal and the Regulation would be to hold that Sturgeon compensation for identical damage is independent of the Montreal Convention. It is therefore not at all affected by Montreal and can even be non-compensatory. One could draw this conclusion from IATA, where the Court held that standardised and immediate compensatory measures are not among those whose institution is regulated by the Convention.

However, also a less bold answer is possible. Throughout its case law the Court has emphasised that compensation for delay is compensatory. More precisely, in Sturgeon the Court held that Article 7 provides for compensation for ‘loss of time’. Loss of time is identical yet real damage for all passengers as they all suffer the same delay. Loss of time may have different consequences for each passenger. These consequences constitute individual damage, which is governed by Montreal.

The identical damage is compensated in a standardised manner. The standard is partly related to the length of the flight and partly to the length of the delay (Air Passenger Rights, p. 52-53). Airlines argue that compensation is therefore not related to the actual damage and that the regime of Article 7 is therefore non-compensatory. Indeed, a delay of 20 hours provides for the same compensation as a delay of 4 hours.

It is unlikely that the European Court will be convinced by this argument. It is more likely that it will emphasise the Regulation’s aim is to provide quick redress and that this justifies a standardised form of compensation.

However, the airlines are correct in that a more subtle system of standardised compensation is conceivable. In the forthcoming review of the Regulation the European Commission may consider proposing an amount of compensation for each hour delay and with no discount for long delays. This would even more clearly show that Sturgeon compensation for loss of time is compensatory and therefore in line with Montreal.