Lipton and another v BA Cityflyer Ltd [2024] UKSC 24

Mr and Mrs Lipton's flight from Milan to London was cancelled due to pilot illness. They claimed compensation under EU Regulation 261/2004. The Supreme Court held that pilot illness is not an 'extraordinary circumstance' excusing compensation, as managing staff absence is inherent to airline operations.

Facts

Mr and Mrs Lipton were booked on a BA Cityflyer flight from Milan Linate Airport to London City Airport on 30 January 2018. The flight was cancelled when the captain reported illness approximately one hour before departure and no replacement pilot could be found. The Liptons were rebooked and arrived approximately 2.5 hours late. They claimed €250 compensation under Regulation (EC) 261/2004 (‘Regulation 261’), which provides passenger rights for cancelled flights.

Procedural History

The claim was dismissed at first instance and on appeal to the County Court, which held that the pilot’s illness constituted ‘extraordinary circumstances’ under Article 5(3) of Regulation 261. The Court of Appeal reversed this decision, holding the defence was not made out. BA Cityflyer appealed to the Supreme Court.

Issues

Two principal issues arose:

1. Ground 1: Whether the sudden illness of a pilot constitutes ‘extraordinary circumstances’ within Article 5(3) of Regulation 261, relieving the airline from paying compensation.

2. Ground 2: Following Brexit, what law applies to determine pre-Brexit accrued causes of action under EU law, and what is the status of CJEU case law in such determinations.

Judgment

Ground 2: The Applicable Law

The majority (Lord Sales, Lady Rose, Lord Burrows, and Lady Simler) held that the European Union (Withdrawal) Act 2018 provides a ‘Complete Code’ for determining EU-related rights after Brexit. Pre-Brexit accrued causes of action under EU Regulations are brought forward as ‘retained EU law’ by section 3 of the 2018 Act.

“Section 3 of the Withdrawal Act 2018 is effective not only to bring forward into domestic law as ‘retained EU law’ the text of Regulation 261 itself as it was ‘operative immediately before IP completion day’… It also brings forward accrued causes of actions such as the Liptons’ arising under direct EU legislation within the meaning of section 3.”

The majority rejected the analysis that section 16 of the Interpretation Act 1978 independently preserved accrued rights outside the 2018 Act framework. They concluded that the unamended EU text of Regulation 261, not the domestic amended version, governs pre-Brexit claims.

Lord Lloyd-Jones dissented on Ground 2, favouring the Interpretation Act analysis, arguing that accrued EU rights remain enforceable as EU law preserved by section 16 of the Interpretation Act 1978, not as retained EU law.

Ground 1: Extraordinary Circumstances

The Court unanimously dismissed the appeal on the substantive issue. Applying the test from Wallentin-Hermann v Alitalia (Case C-549/07), the Court held that pilot illness does not constitute ‘extraordinary circumstances’.

“Staff illness, and the need to accommodate such illness on a daily basis, is a commonplace for any business… it is a mundane fact of commercial life which is in no way out of the ordinary.”

The Court applied the ‘inherency test’: an event only qualifies as extraordinary if it is not inherent in the normal exercise of the carrier’s activity and is beyond its actual control. Managing staff absence, including illness, is intrinsically linked to crew planning and is therefore inherent to airline operations.

“A carrier’s operation depends on two principal resources: its people and its aircraft. Wear and tear of the aircraft and its component parts is not extraordinary. The wear and tear on people, manifesting itself in illness, should not be regarded as any different.”

The Court found support in the post-Brexit CJEU decision TAP Portugal v Flightright GmbH (Joined Cases C-156/22 to C-158/22), which, although not binding under section 6(1) of the 2018 Act, was persuasive and consistent with established principles.

Implications

This judgment provides important clarification on two significant matters:

Brexit Transition: The decision establishes that pre-Brexit accrued EU rights form part of ‘retained EU law’ under the Withdrawal Act 2018. Courts are not bound by post-Brexit CJEU decisions but may have regard to them. The Supreme Court and certain appellate courts may depart from pre-Brexit CJEU case law applying the 1966 Practice Statement criteria.

Air Passenger Compensation: The decision confirms that staff illness is not an extraordinary circumstance excusing airlines from paying compensation for flight cancellations. This aligns UK law with the consumer protection objectives of Regulation 261 and provides clarity for passengers and airlines alike. Airlines cannot avoid liability by pointing to unforeseen but inherent operational challenges such as crew sickness.

Verdict: Appeal dismissed. The pilot’s illness did not constitute ‘extraordinary circumstances’ under Article 5(3) of Regulation 261/2004. The Liptons were entitled to compensation for the cancelled flight.

Source: Lipton and another v BA Cityflyer Ltd [2024] UKSC 24