Airlines' challenge of Canada's passenger protection rules rejected by Supreme Court

Court upholds air passenger compensation rules McGill University's John Gradek discusses why Canada's top court upholding passenger protection rules was 'long overdue.'

A consortium of airlines has failed in its challenge to overturn air passenger protection rules that Canada implemented in 2019.

The Supreme Court of Canada (SCC) has ruled that airlines that fly in and out of Canada can be required to provide passengers with standardized compensation on some international flights for delays within their control.

Several global airlines and associations challenged the additional passenger protections on the grounds that the regulations conflicted with the Montreal Convention, an international treaty that Canada signed in 2001.

Earlier this year, the airlines argued in their appeal that the Montreal Convention already provided passengers with an avenue to seek damages.

The SCC disagreed and said there was "no conflict" between the Canada Transportation Act and the Montreal Convention.

"This is a victory for consumers," said John Lawford of the Public Interest Advocacy Centre which was an intervener in the SCC case.

"The Supreme Court decision encourages airlines to treat (the regulations) as part of their operations, as the cost of doing business (and) as something they should honestly engage with. If they do change their attitudes, it will help clear the backlogs and make people trust airlines and instill confidence on the demand side," Lawford said.

The high court found that the Montreal Convention primarily provided rules for compensation "tied to an injury" or negligence, but not necessarily consumer protection.

Under the 2019 regulations in the Canada Transportation Act, passengers could file claims without tying compensation to harm instead of going through the onerous legal process set out in the international treaty.

The regulations mandate standardized compensation for delay, cancellation or denial of boarding based on the time by which a passenger's arrival at their final destination is delayed.

By dismissing the appeal, the SCC denied the carrier the ability to invoke a "due diligence defence" or point to "contributory negligence" to avoid having to pay compensation.

"As long as the disruption in question occurred for a reason within the carrier's control and was not required for safety purposes, the compensation is fixed," the SCC said in its ruling.

Representatives of the International Air Transport Association (IATA) said that they were "disappointed" by the decision and urged the Canadian government to improve the “overall air travel system.”

"Protecting the interests of passengers is best achieved through a safe, efficient journey where disruptions are minimized. While airlines play a critical role in this, the federal government needs to focus its efforts on improving the overall air travel system, especially in the parts of the value chain which are directly under its control," the IATA said in a statement.

The Canadian Transportation Agency, which adjudicates claims, said that the decision "brings certainty to Canada's passenger protection regime and confirms air carriers' minimum obligations to pay compensation for flight disruptions and lost and damaged baggage."

While the Supreme Court decision allows the regulations to stand, it won't necessarily increase the speed by which passengers will get their money back for delayed flights and damaged baggage.

The Air Passenger Protection Regulations started coming into effect on July 15, 2019.

The most recent statistics provided by the CTA shows that since April 1st, 2019, more than 150,000 complaints have been filed with the agency, including 22,309 so far this year.

As the CTA works through the new complaints, the CTA says it's dealing with a backlog of an estimated 79,000 cases – some of which date back years.