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13 January 2021
In August 2020 the Central District Court dismissed several requests for the certification of various class actions which had been filed against different airlines on the basis that statutory damages under the Israeli Aviation Services Law (ASL) (Compensation and Assistance for Flight Cancellation or Change of Conditions) 2012(1) cannot be claimed in class actions.
In all of the class action requests, similar responses were raised by the airlines. The main argument was that according to the Class Action Law 2016, the court cannot award compensation where proof of damage is not required.
In some of the cases, the airlines filed a preliminary motion to dismiss the certification motion prior to filing a response to the merits. In some cases, this preliminary argument was raised within the response.
Due to the similarity of all of the cases, which were dealt with by the same judge, it was decided that this preliminary issue would be heard at the first stage.
The court stated that as a general rule in class action proceedings, preliminary arguments should not be dealt with in a separate motion for dismissal of the claim, but rather within the certification motion stage (which by its nature is a preliminary stage). However, there are exceptions to this rule – which have been established by the courts in previous cases – such as unique and extreme cases in which it is clear that there is no basis for the certification motion.
The judge stated that in her opinion, the nature of these arguments fell within the above exception.
The applicants in the various proceedings argued that although the first addendum to the ASL sets a fixed amount of damages for cancelled flights based on the length of the flight in kilometres, this should not be considered as being neither exemplary compensation nor compensation without proof of damage, and the language of the provision does not explicitly use these terms.
Therefore, the court may award the fixed compensation set by the ASL in the framework of a class action.
The applicants further argued that the certification motion is also based on other causes of action, such as tort law or the Consumer Protection Law; hence, there is no basis to dismiss in limine.
The main argument raised by the airlines in all of the proceedings was that according to Clause 20(e) of the Class Action Law, it is not possible to claim the statutory compensation set by the ASL in case of a cancelled flight.
Clause 20(e) of the Class Action Law provides that the court "will not award in a Class Action exemplary damages and will not award compensation without proof of damage".
Several airlines also argued that it is not possible to base the certification motions on other causes of action (eg, tort or contract) due to the exclusive cause of action set by the Montreal Convention and the Carriage by Air Law 1980.
The court dismissed all of the actions which sought the statutory compensation.(2)
The judge accepted the airlines' arguments that the compensation according to the first addendum (according to Clauses 5(b) 6(a)(3) and 8(b)(1) of the ASL (the fixed compensation)) is considered compensation without proof of damage, which cannot be awarded in the framework of class action proceedings.
It was further determined that although not specifically stated in the ASL, this is a form of compensation which does not require proof of damage, a principle deriving from the wording of the clauses.
Any claimant can file:
Hence, fixed damages are not suitable for class actions.
This principle was applied via various laws which provide for fixed damages without proof of damage, such as the Prohibition of Discrimination in Products, Services and Entry into Public and Entertainment Places Law 2000.
In a previous class action proceeding (Dahan), another district court judge reached a similar conclusion.(3)
In Dahan the court stated that the fixed compensation under the ASL for a cancelled flight is statutory compensation. Passengers are entitled to this compensation without needing to prove actual damage. Therefore, it is compensation without proving damage.
As to the applicants' argument on other causes of action, such as tort (negligence or breach of statutory duty) or unlawful enrichment, the court stated that in view of the exclusive cause of action provided by the Carriage by Air Law 1980,(4) parties cannot file a claim against a carrier based on causes of action which are not based on the ASL under the circumstances in which the Montreal Convention applies.
An appeal to the Supreme Court was filed in some of the proceedings and is still pending.
For further information on this topic please contact Peggy Sharon or Keren Marco at Levitan, Sharon & Co by telephone (+972 3 688 6768) or email (email@example.com or firstname.lastname@example.org). The Levitan, Sharon & Co website can be accessed at www.israelinsurancelaw.com.
(1) CA (Central DC) 55278-03-18, Hila Be'er v Aeroflot – Russian Airlines (18.08.2020); CA 18746-01-19, Sendelman v Ryan Air Ltd; CA 58610-01-19, Bar Sheinder v EasyJet Airlines Co Ltd; CA 60667-01-19, Golan v El Al; CA 32778-03-19, Azarov v Aeroflot; CA 9511-11-19, Maoz v Ryan Air Ltd; CA 6458-11-19, Dlein v El Al.
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