The Spanish alternative in aviation dispute resolution

There is an alternative dispute resolution (ADR) settlement of air passenger disputes coming from Spain that is expected to improve the speed of the conflict resolution process as well as reduce the workload of the courts of justice.

The aviation industry is governed by national and international laws and regulations. Cases related to aviation are almost always taken before the legal system, some aviation analysts have observed. These legal processes can take time from  trial and possibly to appeal and this may take years.

In 2022 a ministerial order was issued for a new Spanish alternative dispute resolution proceedings for claims under EC Regulation 261/ 2004. This new ADR proceeding will cover claims that include cancellations,  significant delays, boarding denials and schedule changes under EC Regulation 261/2004.

The Spanish State Aviation Agency ( AESA) shall be the designated Spanish national enforcement body. The procedure for the new proceedings become operational when AESA is approved as a qualified ADR authority. So it will only be effective for disruptions suffered after such approval is obtained. It will be limited to flights departing from Spain and flights departing from outside the European Union and arriving in Spain, unless such flights are operated by an European Union carrier and the non-European Union country grants  compensation and assistance rights. It will also apply to claims based on EC Regulation 1107/2006, which concerns the rights of disabled persons and persons with reduced mobility. However, claims under the 1999 Montreal Convention for the Unification of Certain Rules for International Carriage by Air for personal injuries and baggage are excluded from the new ADR proceedings. Where there is a disagreement such claims must still be referred to the ordinary courts of justice. Also, excluded are damage claims based on breaches of the contract of carriage which go beyond the scope of the obligations laid down by EC Regulation 261/2004.

Passengers can choose to bring their claims through the new ADR before the AESA or begin normal court proceedings before the commercial courts. Even then passengers are not bound by the decision of AESA and can choose to go to the courts if they do not agree with the decision coming from the new proceeding. Though this process is voluntary for passengers, it is, however, mandatory for airlines.

When a passenger initiates proceedings, airlines must raise their defence. They can appeal the AESA decision before the courts. However, the decision made by the AESA is enforceable while the appeal takes place. So, where there is a ruling in favour of a passenger by AESA,  airlines will have to pay the compensation ordered before an appeal decision is given.

The process requires that passengers must file a formal complaint with the airline before they are allowed to address the AESA. Airlines must confirm receipt of the complaint and reply to the passenger within one month. If the airline rejects the claim ( totally or partially), it must inform the passenger about their rights to file a claim with the AESA. Passengers must file their claims with the AESA within one year of their initial formal complaint to the airline. Where they fail to do so, the AESA will refuse to open the proceedings. The passenger may still bring a complaint before a court of justice if they so wish. (Further details can be seen on https://www.lexology.com).

The ADR proceedings are expected to take place primarily electronically. Proceedings should take no more than 90 days, although an additional 90-day extension is contemplated in complex cases. Airlines must also pay the amounts awarded to passengers when their claim is totally or partially upheld. Such payment must be made within 30 days from the decision of AESA, even if the airline challenges the decision in court. To strengthen the position of the passenger,  the new legal provisions expressly state that the decision of the AESA is immediately enforceable through the court; and also, airlines that do not process the payment on time may be fined between 4,500 and 70,000 euros under the Air Safety Act 2003.

This example from Spain gives an insight into the minds of industry regulators as it relates to flight cancellations, significant delays, boarding denials, schedule changes and others covered by this new regulation. Again the aviation community should not just see it as the burden of airlines only. All hands should be on deck at this critical stage of aviation recovery to ensure that the burden of recovery is not unevenly borne by any single member of the community. A positive passenger experience is afterall the responsibility of all members of the community and calls for collaboration to achieve the same.

There are different alternative dispute resolution methods and mediation is one of them in aviation. Mediation does have advantages that members of the community can explore.

Contracting parties in the aviation industry frequently enter into long term business agreements in which some can last decades. Mediation is less confrontational than litigation and so parties can maintain or develop a future business relationship. So there will not be a further breakdown of the commercial relationship of both parties.

Mediation is also a fast and more cost effective resolution of aviation disputes. Of course, this applies not only to passenger disputes but also to concessionaires and other airport community members. It facilitates a quicker resolution of aviation disputes at a lower cost and does away with the damaging publicity that sometimes follows litigation.

The Mediation process is also far less formal than that of litigation or arbitration. The flexibility of the process allows the parties to focus on the substantive issues instead of procedural formalities. There are no fixed process rules with respect to mediation.

Another benefit which is significant with respect to mediation in dispute resolution in the aviation industry is the ability to select the mediator. Hiring a skilled mediator in aviation related proceedings can result in a faster resolution to disputes.

As everyone looks forward to addressing the teething pains of post pandemic recovery, there are many options available to the airport community that will result in a Win-Win for all.