Germany: Ryanair must not charge extra fees for credit card payments

Upon law suit of Federal Consumer Asscoiation (Bundesverband der Verbraucherzentralen), German Supreme Court (BGH) in judgement Xa ZR 68/09 of May 20, 2010 decided that Ryanair may exclude chash payment but, however, must not charge extra fees for card payment. BGH held that to receive payments of the customers was one of the basic obligations of an entrepreneur who therefore had to provide a common and reasonable way to pay. If payments are only possible by cards no extra fee can be charged therefore.

Source: BGH press release; available in German here>>.

USA: Supreme Court refuses to hear Frequent Flyer Depot case

American Airlines' frequent flyer program prohibits the purchase or sale of the program’s mileage credit or award tickets and makes such mileage or tickets void if transferred for cash or other consideration. American sued Frequent Flyer Depot, and its owners for brokering AAdvantage mileage credit and award tickets. In September 2008, the trial court granted the airline’s request for a temporary injunction and issued an order enjoining the brokers from purchasing, brokering, bartering, selling, offering for sale or soliciting AAdvantage mileage credit or award tickets through the completion of the trial. The appeals court rejected Frequent Flyer Depot’s appeal and held that the airline’s contract with its frequent flyer program members is based on mutuality of obligation and thus is enforceable.

The US Supreme Court has now refused to lift the temporary injunction against Frequent Flyer Depot.

Case: Frequent Flyer Depot v. American Airlines, 09-815

Sources: The NV Flyer, eTurboNews

German BGH: Airline bonus points

Germany Highest Court (BGH) ruled yesterday about the forfeiture of Airline bonus points (BGH 28.01.2010, Xa ZR 37/09):

Plaintiff was a participant of the flight awards program of the defendant airline. Under this program, travelers were able to collect a number of bonus points dependent on the route booked that could be redeemed within five years after the flight for bonus tickets. In the conditions of the program (CoP), the defendant retained the right to terminate the program at any time. In September 2007 defendant announced the ending of the rewards program by 31 October 2007 and admitted to the participants the option to transfer the points collected to another airline’s program. At the same time defendant terminated plaintiff’s participation contract and informed the plaintiff that he may book flights on the bases of the current CoP until 30 April 2008 only and which shall take place until 31 October 2008.

Plaintiff considered that defendant’s CoP shall be null and void in this regard and he claimed that he could still redeem the bonus points within five years after the flight date.

Both, the district court and the court of appeal dismissed the action and considered the CoP of the defendant still to be in force and binding.

The BGH did not follow this point of view. Defendant may terminate the flight rewards program at any time, however, in the case at hand the CoP providing a right to decrease the period of the initial validity of the bonus points of up to one tenth can not be justified.

This may cause difficulties for the defendant when booking appropriate bonus flights only six months in advance. Bonus points are a not a voluntary service provided by the defendant, since the bonus points are a kind of discount agreed which is applicable for future flights. The defendant is obliged to grant bonus points for flights that have taken place after termination the program, unless they have been booked prior to its termination on the basis of the CoP.

The offered transfer to another airline’s awards program is not an alternative, because it is not equivalent in every respect.

New Commission, Hearings, etc

1.

The full 'Timetable for the Hearings of the Commissioners designate', which will start on January 11th and last until 19th can be found here:

Timetable EP

2.

The new Commission 'Barroso II' and the respective responsibilities can be found here (in all official languages):

New Team

3.

Further information about the hearings can be found here:

Hearings

4.

once again:

The Consumer Contract and Marketing Law SANCO B.2 moves to DG JLS from DG Health and Consumers (SANCO) as part of the Justice, Fundamental Rights and Citizenship portfolio

Nevertheless the new responsible commissioner Viviane Reding will not be heard by the IMCO but only by LIBE, JURI and FEMM committees

5.

Information about the several committees, it's schedules and documents can be found here:

EP Committees

Austrian Supreme Court addresses excessive term of timesharing contract

In July 2003 plaintiffs had acquired timesharing rights (right to use an appartement one week per year) in defandants' hotel at CHF 10.000 and a yearly contribution of CHF 490. The contract term was scheduled until 20.01.2050 (!). In their law suit filed in 2008, plaintiffs sought for termination of their contract by 20.01.2015 and refund of EUR 5.297. They claimed that due to settled case-law the term of a timesharing contract must not exceed 10 to 15 years. As thus their contract therefore was partly void they were entitled to the refund claimed for.

The claim was dismissed by all levels of jurisdiction: Supreme Court (OGH) confirmed the view of the lower instances that it was not the excessive term of contract itself that had to be regarded void but the lack of a right to terminate the contract after expiration of a reasonable term. Even if notice of termination can be given long time in advance, the legal consequences of termination will only become effective at the time of termination. Thus there was no claim to the declare the contract void "pro futuro" and no due claim for refund.

OGH judgement 8 Ob 147/08p of April 4, 2009 available in German here>>.

European Court of Justice: national courts required to examine, of their own motion, unfairness of terms in consumer contracts

Upon reference for preliminary ruling instituted by a Hungarian District Court (Budaőrsi Városi Bíróság), ECJ held that the protection which Directive 93/13/EEC on unfair terms in consumer contracts confers on consumers extends to cases in which a consumer who has concluded with a seller or supplier a contract containing an unfair term fails to raise the unfairness of the term, whether because he is unaware of his rights or because he is deterred from enforcing them on account of the costs which judicial proceedings would involve.

As a consequence, the role of the national court in the area of consumer protection is not limited to a mere power to rule on the possible unfairness of a contractual term, but also consists of the obligation to examine that issue of its own motion, where it has available to it the legal and factual elements necessary for that task, including when it is assessing whether it has territorial jurisdiction.

Where the national court considers such a clause to be unfair, it must not apply it, unless the consumer, after having been informed of it by the court, does not intend to assert its unfairness and non-binding status.

Source: ECJ press release 46/09; full text of judgement C-243/08 - Pannon GSM of June 4th, 2009 available here>>.

European Court of Justice: national courts required to examine unfairness of contract terms of their own Motion

Council Directive 93/13/EEC on unfair terms in consumer contracts provides that unfair terms used in a contract concluded with a consumer by a seller or supplier are not binding on consumers. In a decision of June 4^th, 2009 (Case C—243/08 - Pannon GSM Zrt. v. Erzsébet Sustikné Győrfi) ECJ held that the protection which the Directive confers on consumers extends to cases in which a consumer who has concluded with a seller or supplier a contract containing an unfair term fails to raise the unfairness of the term, whether because he is unaware of his rights or because he is deterred from enforcing them on account of the costs which judicial proceedings would involve.

As a consequence, the role of the national court in the area of consumer protection is not limited to a mere power to rule on the possible unfairness of a contractual term, but also consists of the obligation to examine that issue of its own motion.Where the national court considers such a clause to be unfair, it must not apply it, unless the consumer, after having been informed of it by the court, does not intend to assert its unfairness and non-binding status.

Source: ECJ press release No 46/09

Carnival Brands agree to refunds

Six Carnival brands to refund retroactive fuel fee31/3/2008Carnival Corp. has reached a voluntary agreement with Florida’s Attorney General to refund retroactively applied fuel supplements for six brands: Carnival Cruise Lines, Holland America Line, Princess, Costa, Cunard and Seabourn.
The refund applies to bookings that were made prior to Nov. 7, when the supplement was announced. The supplement remains in effect for bookings made on or after Nov. 7.
The amount of funds to be returned totals approximately $40m. Carnival said today’s announcement will have no impact on first quarter financial results or its March 20 guidance for the second quarter or the full year since the company had not recognized the revenues made prior to Nov. 7 pending the Attorney General’s review.
For cruises departing on or prior to April 4, passengers due a refund will receive it in the same form they used to purchase their cruise. For sailings departing from April 5 through June 23, passengers will receive an on-board credit. Customers sailing on or after June 24 will have their booking adjusted to remove the supplement.
Carnival noted that travel agents whose clients had existing reservations on Nov. 7 were offered $10 per booking in administrative compensation for notifying those clients. Agents will still receive the $10 per booking.
The Florida Attorney General said more than 1.1m bookings were affected. A similar settlement was reached last month with Royal Caribbean International and Celebrity Cruises, resulting in $21m in consumer reimbursement. Go to

Florida: Cruise lines must refund fuel fees

Florida Attorney General Bill McCollum announced a settlement with Miami-based Royal Caribbean Cruises Ltd. and its subsidiary Celebrity Cruises Inc., in which the cruise lines will refund $21 million worth of fuel surcharges that the companies levied even after travelers booked their vacations.
Royal Caribbean and Celebrity customers who were retroactively charged the fuel fee - which added as much as $70 a person to the cost of a cruise - and have already sailed will get full refunds, the Attorney General's Office said. Customers who were retroactively charged but have not yet sailed will get their refunds as on-board spending credits, the office said. The companies must also ensure that future surcharges are disclosed to customers in "clear and conspicuous" terms.
The settlements will affect an estimated 300,000 bookings.

Source: orlandosentinel.com; read full article here>>.

Choice of Law and Forum - The Red Seal Experience

1. Red Seal is an Ontario (Canada) tour operator. 2. It entered into three "Guarantee Contracts" with the Ontario-based representative of six Caribbean hotels. The Guarantee Contracts dealt with general issues such as no black-out periods, no bumping of Red Seal pax, no better terms to a Red Seal competitor, etc. None of these Guarantee Contracts contained a choice of law or a choice of forum clause. 3. After the first two of them were signed, Red Seal entered into a separate "Operating Contract" (i.e. for specific space on particular dates) with each of the six Caribbean hotels. Each specified that the law of Florida and the Courts of Aruba would apply. 4. Disputes arose, and Red Seal sued the Ontario "rep" company in the Courts of Ontario. 5. That company sought to oust Ontario law and Courts, and bounce the case to Aruba pursuant to Florida law, based on the terms of the Operating Contracts. 6. In a mid-September decision, the Ontario Courts ruled that one of the disputes involved site-specific issues and thus was governed by the relevant Operating Contract. Florida/Aruba applied to it. 7. But it ruled that the balance of the disputes related to the subject matter of the Guarantee Contracts. The Florida/Aruba provisions of the Operating Contracts were thus irrelevant. As the Guarantee Contract was silent re courts and law, the Ontario Court was free to determine (as it did) that there was a sufficient nexus with Ontario to allow Red Seal to maintain those actions in the Ontario courts.

(Originally posted by Doug Crozier)

Passengers' Rights Survey

A recently published survey carried out by the EU Commission showed that almost four out of ten citizens are not aware that they conclude a conctract with a transport company when purchasing a ticket and a majority doesn't know about the rights and obligations contained in such contract. The most used means of transport, namely local urban transport and inter-city rail transport have a more negative image whereas air transport has a posive image among most Europeans. However, despite the recent reinforcement of air passengers' rights in the EU, only one third of the citizens are aware of these rights (Special Eurobaromater 228 / Wave 63.2).

(Originally posted by Michael Wukoschitz)

No right of withdrawal from car hire contracts

Interpreting Art. 3(2) of the European Directive 97/7/EC on the protection of consumers in respect of distance contracts, European Court of Justice in a recent preliminary judgement (easyCar UK Ltd v. Office of Fair Trading) held that the exemption made in regard to "provison of transport services" includes contracts for the provision of car hire services. Consumers therefore have no unrestricted right of withdrawal within a specific period after conclusion of contract, even if same was concluded as a "distance contract" via the internet (ECJ 2005-03-10, C-336/03)

(Originally posted by Michael Wukoschitz)

Unidroit Hotel Contracts

The Governing Council of Unidroit at its 80th Session has approved the issue of hotel contracts being put on its reserve list with a view to future work on it if resources are available. It now appears on the reserve list for the Unidroit Work Programme for 2002-2004.

(Originally posted by John Downes)

Payment of Hotel Bill

In R v Vincent [2001] CA, V stayed for a week at one hotel and shortly afterwards he stayed for a month at another. In both cases he left without paying his bills. He told the court that he had told the owners of both hotels that he was waiting to receive some money and would then pay them. Thus, he believed that they had accepted the arrangement that he would make payment when he was able to do so. The Court of Appeal (Criminal Division) upheld an appeal that V was not guilty of an offence under Section 2 of the Theft Act. Although hotels normally required “on the spot payment”, that expectation did not apply where an agreement had been reached to pay later. Whether or not that agreement had been induced by deception, it did not amount to theft of services under the Theft Act.

(Originally posted by John Downes)

European Commission blocks Airtours Takeover of First Choice

The EU Commission rejected the proposed takeover because it would leave the three largest tour operators in the UK with 80% share of the package holiday market (Airtours, Thomson and Thomas Cook). These companies are also vertically integrated and the Commission believed that the proposed merger would restrict competition in the UK package holiday market.

(Originally posted by John Downes)

English High Court Clears Payment for Airport Slots

The High Court in London ruled on Thursday, 25 March, that EU Regulations do not prevent money being paid as part of an exchange of takeoff and landing slots between airlines. BA had exchanged slots with KLM, paying compensation to the Dutch airline in recognition of the greater value of its slots. The judgment does not however go so far as to permit airlines to sell their slots outright - a pair of takeoff and landing slots at Heathrow being estimated as being worth up to £3m ($5m)

(Originally posted by Jason Campbell)

Airport Slots

Commissioner Neil Kinnock announced plans to buy and sell take-off slots. In July, British Airways and American Airlines were required to relinquish 267 slots (without compensation) in order to obtain EU approval for their alliance. The plans for buying and selling the slots will require legislative changes and are unlikely to be effected before 2001.

(Originally posted by John Downes)