The High Court has today handed down judgment dismissing a claim bought by Bott & Co Solicitors Ltd against Ryanair DAC arising out of the latter’s handling of claims for flight disruption compensation under Regulation (EC) 261/2004.
The judgment could have a significant impact on the market for handling flight disruption compensation claims.
The claimant firm specialised in bringing low value flight disruption compensation claims against airlines. Ryanair had adopted a practice of settling pre-action claims directly with the Bott & Co’s clients, as opposed to communicating with the firm directly, with the result that the firm encountered difficulties in recovering its fees. Bott & Co sued Ryanair in respect of this practice in Part 8 proceedings, claiming various forms of relief which it said were necessary to protect its equitable lien over its fees. Bott & Co also sought a declaration that a clause of Ryanair’s General Terms and Conditions of Carriage which required passengers to submit compensation claims directly to Ryanair in the first instance was unenforceable on consumer protection grounds.
Mr Edward Murray, sitting as a deputy of the Chancery Division, dismissed the claim. His judgment contains important guidance on when a solicitor’s equitable lien will arise. The judge stated that in order for a solicitor to have such a lien: (a) there must be a fund in sight; (b) which has been recovered, preserved or established by the solicitor’s efforts or activity; (c) as a result of litigation or arbitration, including a compromise resulting from the pressure of the same; and (d) in which the solicitor has an interest that equity can protect and which is deserving of protection. The judge concluded that no lien arose in the case before him given that the compromises which were the subject of the claim occurred without litigation or arbitration, and there was no basis for extending a protective equitable principle to cover them.
The full judgment can be read here.
Brian Kennelly QC and Tom Coates acted for Ryanair DAC.