Law Pod Lipton FIRST PASS Rosalind: [00:00:00] Hello, LawPod listeners. Today we have a summer holiday story for you about travel woes, with which you will be very familiar. Airport cancellations and delays. The Supreme Court has been pondering the following very simple tale for some time and has handed down a lengthy judgment about it. Back in January 2018, Mr and Mrs Lipton were booked onto a flight operated by CityFlyer, scheduled to depart from Milan at about 5pm. Rosalind: They were supposed to arrive at London City Airport just after 6pm local time, but the flight was cancelled because the pilot reported that he was unwell shortly before departure and it was not possible to find a replacement in time. The Liptons were rebooked onto another flight and arrived at London City Airport at about 8.45pm that evening. Not too [00:01:00] bad, just over two and a half hours later than they expected. But they put in a claim for compensation for 250 euros, that's about 220 pounds. City Flyer has refused to pay. From this all too familiar tale of frustration and annoyance arise two important legal issues which have made their way up through the several tiers of our courts to occupy a full day of argument before the Supreme Court. Rosalind: Note, the delay to the Lipton's flight took place before Brexit took effect, at a time when the EU regulation governing passenger compensation applied in their favour. I have with me David Hart KC of One Crown Office Rome, who will explain how this claim fared in the lower courts, before we get into the weeds of Brexit, EU retained law, and all the other problems that detained their lordships for so [00:02:00] long. Rosalind: David, please do fill us in on how this compensation claim fared in the lower courts. David: Well, there's an EU regulation which is designed to give quick fire compensation for late flights. And it has a defence, and the defence is that there may be extraordinary circumstances beyond the control of the airline. David: And if the airline can prove that, it doesn't have to pay the compensation. As you can gather from the amounts of money we're talking about, it has to be quick fire. And the whole idea is that it doesn't get bogged down in huge, long disputes, of which, unfortunately, this was an exception for legal reasons. David: So the question is: Are there extraordinary circumstances when the captain of the aircraft turns out to be ill at the time of the flight? And [00:03:00] the courts went about it in this way. The District Judge in the middle of 2019 said, yes, there were extraordinary circumstances. So the Liptons didn't get their money. David: They appealed and they went to the Circuit Judge in February, 2020, by now Brexit was happening. And the circuit judge, HH Judge Ian Hughes, agreed with the judge below and said, No, the Liptons lose. The Liptons, unaffected by these two losses, went to the Court of Appeal. Rightly so, because the Court of Appeal agreed with them and gave them compensation, saying that it wasn't extraordinary circumstances, having looked at all the EU cases and the domestic cases on what that meant. And then it got before the Supreme Court, who just very recently decided that [00:04:00] the Court of Appeal was right in the outcome of the case, and so the Liptons ended up with their money. Rosalind: Thank you very much, David, for taking us through that particular element of the claim. Rosalind: Now, what concerned the Supreme Court was not actually the question of compensation for the Liptons. It was another question altogether, which was how this regulation applied to the Liptons in the course of Brexit. So could you take us through how the court embarked on examining or analysing this question? David: Well, they did it in the most of the 93 pages of the Supreme Court judgment. So there's only a limit to which I can go into this. And indeed, listeners will not be terribly interested in the minutiae of all the Acts of Parliament, which in the end were necessary to get Brexit [00:05:00] sorted and our laws brought in line. David: But what the dispute was, amounted to this. The majority of the court said that the claim took effect through the process of retained law, which was a principle introduced by the Brexit legislation in 2018. So it carried on in that form and was unaffected by a minor amendment which was made in 2019 when these sorts of claims were effectively domesticated and turned into domestic regulations, which made a massive difference to the amount of compensation. David: It turned 250 euros into 220 quid. Absolutely notional, but at least we were now talking about pounds rather than euros. So, that's what the majority [00:06:00] said. It was an effect of the Brexit legislation. And the minority of one, Lord Lloyd Jones, he said no, it didn't work like that at all. The Liptons, when they had their delay, had a straightforward EU claim, and it remained such, because unless legislation was expressly said to be retrospective, the claim continued, and that was a function of ordinary principles of domestic law reinforced by Section 16 of the Interpretation Act. David: So that was the clash, and you may well be saying, why on earth does that matter? Well it didn't really, in this case. It matters because there is a whole host of claims, many with much larger sums of money at stake. Which have been rumbling through, and the courts in this country [00:07:00] have been finding it difficult to cut the thickets of all this legislation. David: Which is why the Supreme Court said, alright, look, we'll have a go at sorting it out. Which they did, apart from the fact that one of the justices disagreed with the conclusions of the rest. Rosalind: And I think it's important, isn't it, David, that the Liptons actually started their litigation before Brexit, and that it was then contested. Rosalind: So it carried on. So what we were talking about here is not the regulation as such, but what is effectively an accrued cause of action. That made a big difference, didn't it? David: That's right. That being the domestic law principle, that once you've got an accrued cause of action, you can hang on to it unless somebody says there's an act of parliament, which takes it away from you. David: And that in a sense was the nub of the dispute between the majority and minority. The majority saying, yes, it was taken [00:08:00] away from them, albeit in a rather abstruse fashion because of Brexit legislation. It turned into a claim effectively under the Withdrawal Act rather than a claim under the original Regulation. Rosalind: That was why their accrued cause of action wasn't extinguished by the 1972 European Communities Act, is that correct? David: That's right. We got EU claims via a simple section, in the 1972 European Communities Act, which says that everything which is claimable in the EU can be enforced in the UK. That's a gross simplification, but that's the gist of it. David: And that's what the Liptons were saying. We still have it. We had it. When our flight was delayed, we had it. We had a direct claim because there's a piece of European legislation which entitles us to compensation. Rosalind: And the problem is that if law, which formed part of [00:09:00] domestic law because of the UK's membership of the EU, had simply ceased to have effect on what was called Completion Day, that would have left large gaps in our legal system. Rosalind: So the Withdrawal Act provides that domestic law derived from EU law continues to have effect after Completion Day. And these provisions were at the core of the appeal. David, you referred to the Interpretation Act 1978. Could you just explain what that Act effectively does and why it's so relevant to this case? David: It contains a section which says unless you expressly say so, a change in the law does not have retrospective effect, i. e. does not affect things which have happened before the law was changed. Now there are many bits of the law where there is a express retrospective effect. And, you know, in effect, there were bits of the Withdrawal Act [00:10:00] process which were said to have that effect, but not this one. Rosalind: And the Interpretation Act and the Complete Code Analysis were the two separate avenues by which the majority and Lord Lloyd Jones arrived at their separate conclusions. Why was it such a really important division between these two analyses? David: Well, it's important because it may affect other claims where things are different. David: And just to give one example from the minority, a simple example, which shows the difficulty of the majority's position. What happens if the EU regulation was amended to double the amount of compensation? From say 250 Euros to 500 euros. And that happened after the Lipton's flight, which would [00:11:00] normally entitle them to the 250, but was into EU law when EU law started being fed into the Withdrawal Act. David: Because the Withdrawal Acts effectively said, UK law's got to stand on its own feet, and we've got to find a way of doing that. giving the domestic legislature obviously the right to repeal and tweak bits, but we need to get it into UK law. Great swathes of law which we, the UK, need time to think about whether we think they're a good thing or a bad thing. Rosalind: So obviously if that had been the case, had there been a later amendment to EU law to double the compensation, it would have mattered hugely to the Liptons because if the Interpretation Act had applied to them, they would've got what they were entitled to at the time of their case, rather than the [00:12:00] 500 pounds Euros at the time of Brexit. David: Yes. The 500 pounds, which would have been UK retained law under the Withdrawal Act, they would've just put up their hands and said, well, if the majority's right, can we have 500 Euros? Please? I mean, the, the timings are slightly curious in the case because the first instance decision was before we left the EU. David: The second decision, that's the circuit judge, was 12 days after we left the EU. And of course, we're now three and a half years after the main set of provisions were domesticated, because there was a transition period in 2020. Because we exited in such a rush, the legislature said, well, it was a good thing to have 10 months or so to sort out all these legal issues.[00:13:00] David: And that's why we ended up with this concept called the implementation period in 2020, at the end of which we really did stand on our own feet. Rosalind: It seems to me quite significant, and I wonder how important you think this is, David, that the Withdrawal Act expressly excludes the application of some principles of EU law and excludes any causes of action based on the Charter of Fundamental Rights and Freedoms. Rosalind: Now, if it expressly excludes those, then, if we're talking about other things that are excluded from the Withdrawal Act, it would be expressed in the Act, surely? David: Well, that was one of Lloyd Jones’ points, and it seems to me a strong one. One hesitates to disagree with four justices of the Supreme Court, including some leading constitutional lawyers, but if one was approaching it afresh, you would think that Lloyd [00:14:00] Jones analysis had more sense, but the majority, I think, focused on a rather different point that there was a huge political impetus in order to domesticate EU law insofar as it could be domesticated. David: And the idea that there should be causes of action left over under true EU law. was not the intention of the legislature during this rather agonizing process. Rosalind: Of course, there's been a great deal of academic commentary about this issue, and this is a slightly side point, David, but I was quite surprised to see how often the blogosphere was visited by their lordships, and in the Supreme Court, one doesn't often hear of blog content being discussed at that level. David: No. You don't. I mean, you see it sometimes. I mean, obviously, [00:15:00] a particular interest in it is that Crown Officer Row has its own blog, the UK Human Rights blog. So we always like to see blogs percolating their way into high level judicial consideration. But I think this is a good example. The blogger in question is a leading constitutional law barrister, he was an academic, he wrote three or four posts on these sorts of issues, and the justices obviously thought that it was an extremely good summary of the different issues, even though some of them disagreed with his conclusions. Rosalind: In summary then, I think we can wrap this up. Let's go back to, again, why this little case is so important. And in fact, everything in the judgment, by the way, we don't need to keep repeating this, is obiter because it doesn't affect the outcome of the Claimants case, of the Appellants case. [00:16:00] But why are we sitting here discussing it at such great length? Rosalind: Why is it important? David: It’s important because parties now know, because the Supreme Court has said so, that the status of law at the various stages between being full members of the EU, being subject to the Withdrawal Act 2018, being subject to the Withdrawal Act 2020. And so these partly historic cases, you can now say, well, the applicable law is this. David: That's important because the Supreme Court set out a great series of cases, not necessarily involving holiday compensation, where these issues had arisen and where the judges below were disagreeing. It's difficult stuff and there was no easy route through, [00:17:00] whether or not you agree with what the majority says. David: We now know what the story is. Rosalind: Indeed, so, because it's the Supreme Court, and no matter how convincing Lord Lloyd Jones analysis was, which I found very convincing myself, if you have an EU right and an accrued cause of action, it's within EU retained law, it's not an application of the Interpretation Act 1978. Rosalind: Would you say that that's an accurate summary? David: Yes. Rosalind: Well, there we go. Thank you very much for summing up those 93 pages. We'll see how this judgment applies in future more complicated cases where the outcome really matters to the claimants, to the parties. Thank you, David, very much for that very clear analysis.