The Court of Appeal has ruled that Ryanair is entitled to respond directly to passengers seeking compensation - with no liability to pay solicitors who may have helped in the claims.
In Bott & Co Solicitors Ltd v Ryanair DAC, Lord Justice Lewison said that claimant firm Bott & Co, which receives around £100,000 a month from flight delays claims against Ryanair, was not entitled to an interest in the compensation. Passengers are entitled to use third parties, the court ruled in Bott & Co Solicitors Ltd v Ryanair DAC, but must go to the Ryanair claims process in the first instance.
Ryanair changed its terms and conditions in 2016 to require passengers seeking compensation for delays to deal directly with the airline and to allow it 28 days to respond before instructing a third party.
Bott argued the clause was invalid under EU law and that the firm had a claim to an equitable lien. The firm cited Edmondson, in which the Supreme Court ruled that insurers compensating law firm clients directly were still expected to pay fixed costs. If Bott had been successful on appeal, this principle of equitable lien would have been extended.
Bott, which has acted on 125,000 claims since it moved into the sector in 2013, charges fees of 25% of the total compensation plus a £25 administration fee per passenger.
The court heard that where Ryanair pays Bott’s client directly, the firm loses the opportunity to deduct its fees from the compensation before it is paid. Bott, therefore, must pursue the client directly for payment. The firm’s experience has been that about 70% of clients pay in response to a direct request. Lewison LJ noted this was said to ‘threaten the viability of its business model’.
Lewison LJ said the making of a flight delay claim was ‘largely mechanical and formulaic’, requiring little more than inputting the flight distance and extent of delay. He did not consider the services provided by Bott in processing the vast majority of claims could be said to be ‘litigation services’ – the phrase used to justify solicitors’ costs in Edmondson. Bott’s services were not ‘required in order to promote access to justice’, the judge said.
As to the validity of the Ryanair terms and conditions, Lewison LJ said that if a passenger needs help in filling in the online form there was nothing to prevent that – indeed it was permitted in the airline’s own clauses.
But the judge added: ‘Ryanair’s online process for compensation claims does not appear on the evidence to be any more difficult to operate than Bott’s own on-line method of receiving instructions.’ He added it was also diffcult to see how Ryanair’s procedure could place a material obstacle in passengers' route to compensation.
Bott, which has asked for leave to appeal, welcomed the court’s decision that claimants are free to use third parties, so long as the claim is made in their name. Senior partner David Bott added: ‘This ruling is a victory for passengers, who retain the right to choose who they want to ask for assistance with their claim.’