Liability of an air carrier for loss of items from checked baggage
Diary number: S2014/390
Issue date: 28.11.2018
On the date of arrival of a flight, a passenger had informed the airline by telephone that items had been missing from her baggage. A representative of the airline had entered the report into the company's electronic information system. At the request of the passenger, the airline had provided her with written confirmation of the report to the airline, to be used in seeking compensation from her insurance company.
The insurance company had compensated the passenger for the items lost from her baggage and had brought an action against the airline in which it requested reimbursement. The airline contested the claim on the grounds that the claim had not been filed in writing within the period of seven days stipulated in Article 31 of the Montreal Convention for the Unification of Certain Rules for International Carriage by Air. The Supreme Court held, on the basis of the grounds noted in its judgment, that the passenger had not lost her right of action against the carrier.
Background to the case and the provisions to be applied
Airline passenger A had arrived in Finland from Málaga on 1 November 2010. On the same day, she had been in telephone contact with the airline's customer service and had reported that items had been missing from her baggage. The airline's representative had entered the report into the company's electronic information system, specifying the lost goods along with their value. A had again telephoned the airline's customer service on 3 November 2010, requesting that the airline provide her with a certificate to be given to her insurance company, and the airline had done so.
The insurance company had paid compensation to A and claimed reimbursement from the airline on the basis of its right of recourse. The airline contested the claim on the grounds that A had not submitted a written complaint to the air carrier within the period of seven days following the receipt of the baggage, as laid down in Article 31 of the Montreal Convention.
Article 31 (1) of the Montreal Convention provides that receipt by the person entitled to delivery of checked baggage or cargo without complaint is prima facie evidence that the baggage or cargo has been delivered in good condition and in accordance with the document of carriage or with the record preserved by the other means referred to in Article 3, paragraph 2 and Article 4, paragraph 2. According to Article 31 (2), in case of damage the person entitled to delivery must file a complaint to the carrier forthwith after the discovery of the damage, and, at the latest, within seven days after the date of receipt of checked baggage. According to paragraph 3 of this Article, the complaint must be made in writing and given or dispatched within the times aforesaid. According to paragraph 4, if no complaint is made within the times aforesaid, the right of action against the carrier is lost pursuant to paragraph 4, save in the case of fraud on its part.
The Supreme Court’s request for a preliminary ruling
The Supreme Court referred the following questions on the interpretation of Article 31 of the Montreal Convention to the Court of Justice of the European Union for a preliminary ruling:
1. Is Article 31(4) of the Montreal Convention to be interpreted as meaning that, to preserve a right of action, it is necessary, in addition to giving notice of a complaint in due time, that the complaint be made in writing within the times specified, in accordance with Article 31(3)?
2. If, to preserve a right of action, a complaint must be made in writing in due time, is Article 31(3) of the Montreal Convention to be interpreted as meaning that the requirement of writing may be fulfilled by means of an electronic procedure and also by the registration of the damage in the information system of the carrier?
3. May the Montreal Convention be interpreted as meaning that the requirement of writing is regarded as fulfilled where, with the knowledge of the passenger, a representative of the carrier records in writing the notice of complaint / the complaint either on paper or electronically in the carrier’s system?
4. Does Article 31 of the Montreal Convention subject any complaint to further substantive requirements than that of giving notice to the carrier of the damage sustained?
The Court of Justice replied to the preliminary ruling questions referred by the Supreme Court in its judgment of 12 April 2018, Finnair, C-258/16, EU C: 2018: 252, as follows:
1. Article 31(4) of the Montreal Convention must be interpreted as meaning that, within the periods referred to in Article 31(2) of that convention, the complaint must be made in writing, in accordance with Article 31(3) thereof, failing which no action may be brought against the carrier.
2. A complaint, such as that at issue in the main proceedings, recorded in the information system of the air carrier, fulfils the requirement of being in a written form under Article 31(3) of the Montreal Convention.
3. Article 31(2) and (3) of the Montreal Convention must be interpreted as not precluding the requirement of being in a written form from being regarded as fulfilled in the case where, with the knowledge of the passenger, a representative of the air carrier records in writing the declaration of loss either on paper or electronically in the carrier’s information system, provided that that passenger can check the accuracy of the text of the complaint, as taken down in writing and entered in that system, and can, where appropriate, amend or supplement it, or even replace it, before expiry of the period laid down in Article 31(2) of that convention.
4. Article 31 of the Montreal Convention must be interpreted as not making a complaint subject to further substantive requirements in addition to that of giving notice to the air carrier of the damage sustained.
Assessment by the Supreme Court
The Supreme Court began by noting that, in accordance with the reply of the Court of Justice to the first question in the request for a preliminary ruling, Article 31 (4) of the Convention must be interpreted as meaning that the retention of the right of action requires that the complaint of a loss be made to the carrier in writing and within the period laid down in that article.
On the basis of the reply given by the Court of Justice to the second question, the Supreme Court held that the entry made by the representative of the airline into the electronic information system fulfilled the requirement that the complaint be made in writing.
The Supreme Court referred to the reply of the Court of Justice to the third question and noted that A had used the assistance provided by the representative of the carrier to formulate her oral report of her loss into a written form. Using the certificate provided her by the airline representative for purposes of submission to the insurance company, she had been able to ascertain that the representative of the carrier had entered the oral report into the system in an appropriate manner. She had had the opportunity, within the period referred to in Article 31 (2) of the Montreal Convention, to verify the accuracy of the complaint and to amend or supplement it or to replace it with a new one. Consequently, A had made a complaint within the stipulated period that fulfilled the formal requirement under Article 31 (3) of the Montreal Convention.
Finally, the Supreme Court, referring to the reply to the fourth question dealt with in preliminary ruling, noted that the retention of the right of action did not require that the passenger, in addition to filing the complaint, also files a claim for compensation within the seven day period stipulated. The Supreme Court thus held that the contents of the complaint filed by the passenger did not contain any defects as a result of which she would have lost her right of action.
On the grounds set out above, the Supreme Court held that A had retained her right of action against the airline. The insurance company had the right, on the basis of its right of recourse, to claim the amount requested from the airline.