Under EU law, airline passengers are entitled to be compensated by airlines, under Regulation (EC) No 261/2004 if a booked flight is cancelled at short notice or delayed for a substantial period.
Ruling
Lord Justice Lewison in his ruling in Bott & Co Solicitors Ltd v Ryanair DAC writes that
“Bott & Co Solicitors Ltd ("Bott") is a firm of solicitors which specialises in handling such claims on behalf of passengers.
“Its business model depends on processing a high volume of such claims all of which are of low value.
“Ryanair is one of Europe's largest airlines, and processes many such claims. Almost all of them result in the payment of compensation.
“Where Ryanair decides to make a direct payment to a customer who has instructed Bott, Bott claims to be entitled to an equitable lien over the payment which would require Ryanair to hold back part of the compensation in order to cover Bott's entitlement to fees; or to make payment of the whole of the compensation direct to Bott.”
Compensation
In his judgment, Lord Justice Lewison said that Bott & Co, which receives around £100,000 a month from flight delays claims against Ryanair, has no entitlement to an interest in the compensation.
Bott developed an online tool which enables a prospective client to enter their flight details and then check whether their claim satisfies the basic eligibility conditions.
The judgment clarifies that while passengers are entitled to use third parties, they must go through the Ryanair claims process initially.
In 2016, Ryanair altered its terms and conditions, through clause 15, so that passengers seeking compensation for delays had to deal directly with the airline initially and give it 28 days to respond before instructing a third party.
Bott argued the clause was invalid under EU law and that the firm had a claim to an equitable lien.
Bott charges 25% of the total pay-out in fees as well as a £25 administration fee per passenger. The firm has handled 125,000 claims since 2013.
When Ryanair makes payments to Bott’s clients directly, the firm can’t deduct its fees from the compensation before it is paid and must separately pursue the claimant for payment.
It has a 70% success rate in payment requests, the court heard. The court heard that the firm’s business model is under threat.
The court heard submissions on the definition of “litigation services” and flight delay claims were described as “largely mechanical and formulaic”.
The judge decided that Bott’s services were not “required in order to promote access to justice”.
The judge rejected Bott's claim to an equitable lien because in the vast majority of cases there is not even a negotiation.
“Either the client is entitled to compensation in the amount fixed by Regulation 261 or they are not,” he writes.
Instructions
He also said that “Ryanair’s online process for compensation claims does not appear on the evidence to be any more difficult to operate than Bott’s own on-line method of receiving instructions.”
He said it was difficult to see how Ryanair’s processes placed any “material obstacle” in passengers' route to compensation.
Bott has asked leave to appeal and said it welcomed the court’s decision that claimants are free to use third parties, so long as the claim is made in their name.