Case C-509/11 ÖBB Personenverkehr AG
As discussed in a recent review, the European Union’s involvement in the field of transport regulation can be characterised as a two-stage process: after years of market-liberalisation which brought about cheaper fares and a drastic increase in routes across the continent, passengers have more recently been equipped with direct rights of redress against operators. Whilst such rights have been provided for a wide variety of transport modes, from rail and maritime transport to travel on inland waterways and coach journeys, the vast majority of passenger rights litigation before the Court of Justice (CJEU) thus far has been in the context of civil aviation. The CJEU’s recent judgment in ÖBB Personenverkehr AG breaks with this mould – and is therefore not only an important decision for rail passengers, but also relevant for EU transport law more broadly.
The Legal Framework of Rail Passenger Rights
The legal framework of rail passenger rights is set out in a combination of international and European law: an international measure, the rather unwieldy Uniform Rules concerning the Contract for International Carriage of Passengers and Luggage by Rail, forming part of the Convention concerning International Carriage by Rail of 9 May 1980 (as amended by the Vilnius Protocol of 3 June 1999) [‘CIV’], lays down a basic framework which is then fleshed out by more recent EU legislation, Regulation (EC) No 1371/2007 on Rail Passengers’ Rights and Obligations.
The latter Regulation contains a series of provisions on rail transport, including compensation of the ticket price in case of delay. Under Article 17, passengers have the right to be partially reimbursed for their ticket cost, depending on the extent of delay: 25% in case of delays between 60 and 199 minutes, and 50% thereafter. Delay compensation more broadly, on the other hand, is to be handled according to Article 32 CIV, as appended to the Regulation. Under the latter provisions, railway carriers enjoy a force majeure exception from their liability to compensate passengers from loss or damage arising from delay – including unavoidable circumstances beyond the operator’s control. The Regulation, however, provides for no such exemption in its Article 17; its article 6 explicitly prohibits any contractual waiver or derogation.
Article 30(1) of the Regulation, finally, stipulates that in order to ensure the coherent enforcement of its provisions,
Each Member State shall designate a body or bodies responsible for the enforcement of this Regulation. Each body shall take the measures necessary to ensure that the rights of passengers are respected.
The Facts of the Present Case
The procedural background to the case is rather unusual: it does not arise out of a specific claim brought by a delayed passenger. Instead, the preliminary reference from the Austrian Administrative Court concerned action taken by a National Enforcement Body, against the national rail service provider, ÖBB. The Rail Control Commission (itself not a stranger to controversy before the CJEU, albeit in its quasi-judicial capacity) had required ÖBB to modify its general conditions of carriage [not currently available in English] insofar as they denied any delay compensation.
Two questions arose as a result: first, the substantive issue (posed as question two in the national reference, but treated as the logically prior issue by both the Advocate General and the First Chamber) as to whether a national carrier could limit, by reference to the International Convention or General Principles of EU law, its obligation under Article 17 of Regulation 1371/2007 partially to refund the ticket price by reference to force majeure. Second, whether in the absence of such a power under national law, Article 30 of the same could be read as empowering the national enforcement body to prescribe the specific content of a carrier’s compensation regime.
Having set out the full facts and legal framework, the Opinion of Advocate General Jääskinen first addressed the issue of force majeure, noting that nothing in Regulation 1371/2007 suggested that the passengers’ rights under Article 17 could be limited on such grounds. Neither a reading by analogy of other provisions of EU transport law nor the international conventions referred to above had a bearing on this analysis. Force Majeure could furthermore not be said to operate as a General Principle of EU law, as it was heavily context-specific . Given the overall importance of the Regulation’s consumer protective aims, the interpretation contended for by the Schienen-Kontroll-Kommission was therefore correct.
The opinion then turned to the more complex enforcement issue. Following an extensive discussion of the relevant principles of the effectiveness of EU law, AG Jääskinen suggested that Article 30 could not be stretched to empower the national enforcement body to prescribe specific terms and conditions in the absence of domestic provisions to that effect.
The resulting contradiction – that passengers’ right to reimbursement is clear and unconditional, yet cannot be enforced effectively by the regulator – is addressed in a set of Complementary Observations from paragraph  onwards. Even though individual passenger recourse might be rather cumbersome given the small sums usually involved, there was no general obstacle to the enforcement of passengers’ rights as ‘the legal obligation of a railway undertaking to comply with Article 17 [of the Regulation …] does not depend on the powers of the national body or the sanctions available to it’; the detailed procedural resolution of the matter however being a question for the referring court.
Following the Advocate General’s lead, the Court likewise began by answering the second question referred. Focussing on the wording of Article 17 of the Regulation, it noted that compensation there had to be in relation to the ticket price, and that several clear exceptions (such as tickets purchased after a delay has been announced, or delays caused by connections outside Union territory) had been provided. The complementary regime in the CIV was focussed on compensation for individual damage and loss, whereas the Regulation was aimed as compensation related to consideration (ticket price) for service not supplied as contractually agreed. The relevant travaux préparatoires were unequivocal as regards the EU Legislature’s intention that the force majeure exemption in the former was not to be read across into the latter .
On the enforcement point, the Court noted that whilst Regulations were generally immediately effective in national legal systems, the principle did not extend to provisions such as Article 30, as the specific measures to be adopted by national enforcement bodies had not been identified by the EU legislature . In the absence of domestic legislation, the Schienen-Control Kommission could therefore not impose specific terms on ÖBB.
The Judgment received significant domestic media coverage, with an ÖBB spokesperson noting that notwithstanding the general terms and conditions compensation had already been paid out to passengers since 2011. It should also be pointed out that Regulation 1371/2007 contains important transitional arrangements, allowing Member States to opt out of several provisions (including Article 17) for a period of five years, twice renewable. According to the European Commission, the UK government has decided to institute such a temporary exemption. From an EU transportation law perspective, the case nonetheless raises three interesting issues.
EU Passenger Rights and International Transport Conventions
At first sight, the ÖBB decision looks not too dissimilar from earlier cases in the field of air transport, where air carriers repeatedly challenged the application of EU Regulation 261/2004 on compensation and assistance to passengers in the event of denied boarding and of cancellation or long delay of flight for its supposed conflict with the Montreal Convention of 1999 (‘MC’), which lays down uniform rules governing liability arising from the contract of carriage by air. In Case C-344/04 ex parte IATA, the Grand Chamber had held that it would be wrong to assume ‘that the authors of the Convention intended to shield [air] carriers from any other form of intervention’  and found that the Regulation’s ‘standardised and immediate assistance and care measures’ were therefore entirely consistent with the MC [IATA 48].
The legal framework in the present case is of course slightly different – as the Court correctly suggest, the CIV leaves questions of reimbursement to domestic law, with Article 15 of Regulation 1371/2007 explicitly referring to the CIV for damages in respect of delays, missed connections and cancellations. It is nonetheless important to note that the Court is careful to pay attention to rules of international law, emphasising the complementarity between the Regulation’s ‘fixed-rate standard form of financial compensation’ and the CIV system, ‘which requires an individual assessment of the damage suffered’ . Claims under Regulation 1371/2007 could furthermore not prevent additional claims for actual damage suffered pursuant to Article 32(1) CIV.
Towards a Unified Regime of EU Passenger Rights?
Given the increasing Regulation of diverse transportation modes as set out, above, the question as to a potential uniform regime of EU passenger rights is becoming increasingly prominent. The decision in ÖBB however serves as an important reminder of the Court’s firm position that under the current regime, passenger rights rules cannot be read across different modes of transport, as trains, planes, boats and buses are not interchangeable in their usage conditions. This was true in particular as regards an application by analogy of air passenger rights. As the Advocate General noted, the court had already held in Case C-12/11 McDonagh v Ryanair that the EU legislature could establish different levels of protection for passengers, depending on the transport sector concerned. It was therefore not surprising that the CJEU held that the much-litigated extraordinary circumstances defence in Regulation 261/2004 could not be relied upon in support of a force majeure protection for rail operators.
This finding is in line with broader developments in EU passenger rights, which aim for a high standard of passenger protection. This is evident, for example in the current reform proposals to Regulation 261/2004, which include rail transport offered as part of a plane ticket in the (more extensive) protection regime for air travel. This suggests that if unification of transport regulation regimes were to occur in the future, the emphasis on protecting passengers as consumers would undoubtedly lead to a welcome levelling up across the board.
The case, finally, contains an interesting point relevant to EU law more broadly, in particular as regards issues of effective judicial protection. As mentioned, above, Article 30 of Regulation 1371/2007 stipulates for existence of National Enforcement Bodies, without however specifying their roles other than through a broad obligation to ‘take the measures necessary to ensure that the rights of passengers are respected’.
On the present facts, this led to an important question as to how far bodies such as the Schienen-Kontroll-Kommission can go in ensuring the effective enforcement of EU passenger rights. The regulator’s powers were narrowly circumscribed by national law: it could only order rail undertakings to remove offending clauses in rail undertaking’s condition of carriage, rather than stipulate their substantive terms. In consequence, ÖBB had begun simply to re-adopt the offending provisions, with national law thus unable to ensure full passenger protection (without individual passengers’ recourse to litigation). Could the Kontroll-Kommission, in the absence of any national provision to that effect, rely on EU law to impose upon ÖBB the specific content of the relevant terms?
Having recalled the general ‘loyalty clause’ in Art 3(4) TEU, the CJEU went on to carefully balance effective judicial protection and national procedural autonomy. In a paragraph that warrants setting out in full , it suggests that
it is for all the authorities of Member States, including, for matters within their jurisdiction, the courts, to take the steps necessary to ensure that the obligations arising under [the Regulation] are fulfilled. In order to ensure the full effect of that regulation and to ensure that the rights which it confers upon individuals are protected, those authorities are required to interpret and apply national law, in so far as possible, in the light of the wording and purpose of that regulation in order to achieve the result envisaged by it.
The ruling thus shows a very mature approach to the interaction of EU law and domestic norms by the CJEU, fully in accordance with the principle of subsidiarity: in the absence of specific terms in a Regulation, it is up to each Member States to ensure the effective enforcement of its provisions; a national regulator cannot rely on EU law to go beyond the scope of domestic legislation. Given this subtle footwork in the Court, it will be most interesting to observe the eventual outcome of this case when the matter returns before the Austrian courts.