Compensation request proved to be unjustified

The Court of Appeal, presided by Mr Justice Raymond C. Pace, on May 31, 2012 in the case “GasanMamo Insurance Ltd vs Ryanair Ltd” held, among other things, that a formal claim had to be presented within the stipulated time. A Property Irregularity Report (PIR) was not to be considered as a formal claim.

The facts in this case were as follows.

The Montreal Convention was intended to offer uniform protection to air passengers. Airlines should not impose conflicting requirements. Other airlines considered the report as a claim...

GasanMamo Insurance Ltd compensated a group of travellers €2,091 under a travel insurance policy for damages, consisting of loss of luggage and baggage damage on a Ryanair flight.

Ryanair Ltd disputed liability.

Faced with this situation, GasanMamo, which subrogated the rights of its assured, proceeded to file legal action against the airline.

Ryanair in reply, pleaded that no claim was made within the legal time limit, in terms of article 31, Carriage By Air (International and Non-International Carriage) order (legal notice 63/91), which transposed the Montreal Convention (Convention for the unification of certain rules relating to International Carriage by Air of 1929 as well as EU Regulation no 889). In this respect, it contested the insurance company’s claims for damages which it said were unfounded. It also submitted in its defence that:

• The insurance company had to explain how it calculated the losses, prove that it paid this amount and the real value of the luggage;

• The number of claims against it were vexatious, as it had already paid certain amounts, which the insurance company was seeking re-payment;

• Any claims for a tax refund were unfounded;

• It was stated that the insurance company was requesting payment of certain costs which were not refundable according to contract;

• An €18 administration fee should be deducted, in case it was ordered to give a refund.

On June 20,2012, the Small Claims Tribunal decided in favour of Ryanair.

It was not satisfied that the insurance company proved its case. It noted that the passengers suffering losses had not followed the correct procedure to present a claim. Passengers, in addition, accepted Ryanair’s conditions when purchasing a ticket.

In the Tribunal’s opinion, a claim had to be sent within seven days and was not received within seven days.

Even if the Montreal Convention did not distinguish between minor/substantial claims, the Tribunal said that this was a policy adopted by Ryanair and that it was accepted by its passengers.

There was no doubt that the policy of Ryanair was more stringent than other airlines. It was more difficult for passengers to be reimbursed.

If, however, GasanMamo felt that the conditions imposed by Ryanair were irregular, this case was not the forum to raise these objections.

Under the terms and conditions of Ryanair’s carriage policy, clause 15.1.2, it was stated that:

“If you wish to file a claim or an action regarding damage to checked baggage you must write and complain within seven days and, in the case of delay, within 21 days in both cases from the date on which the baggage was place at your disposal.”

In case of loss or damage to luggage, the procedure was for passengers to complete a Property Irregularity Report (PIR).

Ryanair also insisted that a further claim be made within the time limits as it did not consider the PIR to be a claim.

No claim was considered by Ryanair unless receipts were produced.

GasanMamo, on the other side, argued that a PIR report was presented and that Ryanair should consider the PIR as a claim.

It claimed that Ryanair imposed more onerous conditions than under the Montreal Convention to make it more difficult for travellers to obtain compensation.

The Montreal Convention was intended to offer uniform protection to air passengers. Airlines should not impose conflicting requirements. Other airlines considered the report as a claim, maintained GasanMamo. Nor did the Montreal Convention require travellers to first submit a report, followed by a claim in writing within the time limits.

GasanMamo maintained that if the requisites of the Montreal Convention were satisfied, through the submission of a PIR, there should be no further requirements.

It said that the time limit for lost luggage was two years and that its legal action was filed in time.

Ryanair disclaimed liability for superficial damage caused to baggage as a result of normal wear and tear during carriage. No compensation was given if a luggage was scratched and could still be used.

As regards complaints which were filed within seven days, Ryanair demanded proof of value of lost luggage and its contents. Ryanair said that it did not receive anything and was still waiting for a claim of the lost luggage. Article 31 of the Montreal Convention states that “every complaint must be made in writing and given or despatched within the times aforesaid”.

Aggrieved by the decision of the Tribunal, GasanMamo Insurance entered an appeal, calling for its revocation.

It reiterated its argument that once a passenger filed a report within seven days, this should be considered as a claim for the purposes. Ryanair should not impose more stringent conditions, in excess of the Montreal Convention, as this was not permissible under articles 27 and 47 of the Convention.

GasanMamo submitted that the Tribunal did not decide in accordance with the Montreal Convention. As regards loss of luggage, legal action was taken in time and as regards proof of losses, it was unreasonable to request original receipts, maintained the insurance company. Further, it should not have been condemned to pay all judicial costs once Ryanair raised a number of unnecessary pleas.

On May 31, 2012, the Court of Appeal gave judgement by confirming the decision of the Tribunal and dismissing GasanMamo’s appeal. The following reasons were given for the court’s decision.

The court noted that no claim was filed within the stipulated time limit. The PIR was not to be considered as a claim in writing and this was in accordance with the Montreal Convention.

It also resulted that the PIR form itself contained an annotation that it was not a claim nor an admission of liability.

Reference was made to the Air Transport Users Council’s recommendations: “If at all possible, you should report any mishandled baggage problems to the service desk in the baggage collection hall before you leave the airport. It is not a legal requirement to do so but it is very difficult to make a claim if you do not.

Property Irregularity Report:

When you report a baggage problem at the airport, the airline or agent (there will not be separate service desks for every airline) should make out a Property Irregularity Report (PIR) and give you a copy.

Your airline will want to see the PIR when making a claim. But it is not a legal requirement to have a PIR and an airline should not simply dismiss the claim without one.

The PIR does not itself constitute a formal claim. You will need to write to the airline within certain time limits (see below), enclosing a copy of the PIR.

Time limits:

The Montreal Convention states that claims should be made to an airline in writing within specified time limits. The time limits are:

• Damaged baggage: seven days from the receipt of the bags.

• Delayed baggage: 21 days from delivery.

• Lost baggage: no time limit specified in the convention (but we advise making the complaint as soon as possible after the bag has been missing for 21 days – see “lost baggage” above – or after the airline has declared the bag lost if sooner”.

The Tribunal was not satisfied with the value of the lost items. It said that this claim was not proven nor was a formal claim ever made with Ryanair.

This court felt there were no good reasons justifying this court to disturb the Tribunal’s appreciation of facts re: Dr Adrian Garden Centre & Co. Ltd vs AX Construction Ltd dated July 4, 2008.

Dr Grech Orr is a partner at Ganado & Associates.