Supreme Court upholds air passenger compensation rules

The Supreme Court of Canada has upheld rules that strengthen compensation for air passengers who are victims of delays, cancellations and damaged baggage on international flights.

In a victory for Canadian air travelers, the country’s highest court unanimously rejected an appeal by a group of airlines challenging Canada’s passenger bill of rights on Friday.

Air Canada, Porter Airlines and 16 other callers had argued that the Air Passenger Protection Regulations launched in 2019 violated global standards and should be invalidated for travel to and from the country.

The legal challenge, which began that year, argued that by imposing heavier compensation requirements for flight cancellations or lost luggage while traveling abroad, the regulation exceeded the authority of the Canadian Transportation Agency and violated international rules known as the Montreal Convention.

In December, the Federal Court of Appeal dismissed the airlines’ complaint, except for a regulation that applies to temporary loss of baggage.

The Canadian Transportation Agency and the attorney general argued there was no conflict between passenger protection and the Montreal Convention, a multilateral treaty.

On Friday, the Supreme Court effectively ruled in favor of this decision, stating in a judgment written by Justice Malcolm Rowe that the regulations does not conflict with the Montreal Convention.

By signing the Convention, which “was intended as an attempt to protect both air carriers and passengers,” there is no indication that Canada (or any other state party) agreed to give up its ability to set standards minimum standards of treatment with regard to passengers on its territory.

In an emailed statement, Transport Minister Anita Anand said the Supreme Court ruled in favor of passengers and the government’s view that passengers need protection.

National Airlines Council of Canada (NACB) President and CEO Jeff Morrison said the group is disappointed of the Court’s decision, but that carriers would continue to work with industry stakeholders and government to reduce travel disruptions.

Under federal rules, passengers must be compensated, up to $2,400, if they are denied boarding due to overbooking a flight (called flight bumping in English). Delays and other payments for canceled flights warrant compensation of up to $1,000.

Travelers can receive up to approximately $2,300 for lost or damaged luggage, although the exact amount fluctuates based on exchange rates.

A global approach

The airlines’ argument that the regulations contravene the Montreal Convention rests on the principle of exclusivity of this agreement. The Convention stipulates that any action for damages relating to an international flight is subject exclusively to the conditions of the treaty, rather than any other set of rules.

However, the court ruled that while actions for damages are brought on a case-by-case basis, the Canadian Passenger Bill of Rights establishes a global approach and therefore does not fall under the Montreal Convention.

The Regulation does not provide for an action for damages, because it does not provide for individualized compensation; rather, it creates a consumer protection regime that operates alongside the Montreal Convention.

Therefore, it does not fall within the scope of the exclusivity principle of the Montreal Conventionadded the judge.

The callers included the three largest U.S. airlines, flagship carriers like British Airways and Air France as well as the International Air Transport Association, which has WestJetAir Transat and approximately 290 other airlines among its members.

Tighten the rules

Since the rules came into force five years ago, the government has taken further steps to tighten them, a move prompted by scenes of chaos at airports, endless queues at security checks and halls of luggage that overflows in 2022.

In 2023, he changed the law to close loopholes that allowed airlines to avoid paying compensation to customers and worked to establish a more effective complaints resolution system.

The new provisions also aim to increase penalties by imposing a maximum fine of $250,000 for violations by airlines, 10 times more than the previous regulations, in a bid to encourage compliance.

Another amendment, which has not yet entered into force, would place the regulatory cost of complaints on carriers. This measure, which would cost airlines $790 per complaint under a recent proposal from the regulator, aims to encourage them to improve their service and thus reduce the number of complaints against them.

Meanwhile, the backlog of complaints to the country’s transport regulator continues to build, amounting to around 78,000 as of last month.

“Very good” decision for travelers

Sylvie De Bellefeuille, lawyer and member of the rights defense group Option consommateurs, called the decision very good for travelers.

This confirms the power of the Canadian government to put in place regulations to protect passengersshe said, adding that the decision aligns with other decisions handed down by European courts.

Travelers Rights President Gabor Lukacs, speaking in the case, said the Supreme Court’s decision breathes new life into the move to revamp the traveler protection regime.

However, existing regulations do not measure up to the “European Union gold standard in passenger protection”, he added, calling for reforms that reflect EU rules . He and others also argued that the government was dragging its feet in implementing promised changes.

It’s been over a year since the government promised changes to improve the systemdeclared Ian Jack, spokesperson for the Canadian Automobile Association (CAA). We need to see them now, so the system is not just legal, but actually works for Canadians.