Air Canada seeks to quash regulator’s decision on passenger compensation in court

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Air Canada AC-T is asking the Federal Court to overturn a decision by Canada’s transportation regulator that ordered the airline to pay compensation to two passengers for a flight delay, a move that signals the risk of further litigation from carriers targeting decisions that favour travellers, consumer rights groups warn.

The airline filed an application for judicial review at the end of December asking the court to quash the decision by the Canada Transportation Agency (CTA). The regulator in November had ordered the carrier to pay $2,000 in compensation to two passengers from Kelowna, B.C., for a flight delay that had occurred in January, 2020, according to documents reviewed by The Globe and Mail.

Some consumer advocates worry many similar legal challenges might follow after the Trudeau government last year made changes to the country’s air passenger rights rules. The overhaul was meant, among other things, to streamline the handling of consumer complaints over issues such as flight delays, cancellations and lost or damaged luggage.

But the amendments included a clause that critics say makes it easier for airlines to try to overturn adverse decisions in court, potentially dragging passengers into lengthy court proceedings and undermining rather than helping their ability to receive compensation.

Before the recent changes, passengers and airlines unhappy with CTA orders might be able to appeal them before the Federal Court of Appeal only if the decisions raised questions about whether the law had been properly and consistently applied.

But the legislative changes allow those who are simply dissatisfied with a complaint decision to ask the Federal Court to review it to determine whether it was reasonable, Mr. Lukacs said.

The amendment may “open the floodgate for judicial review applications in the Federal Court,” Gabor Lukacs, president of consumer advocacy group Air Passenger Rights wrote in submissions to the House and the Senate in May, as Parliament was weighing the amendments.

John Lawford, executive director and general counsel of the Public Interest Advocacy Centre, said he shares similar concerns about the legislation.

The amendments were part of the budget implementation bill, which received royal assent in June.

Air Canada referenced the new provision in its recent application for judicial review, saying it means it is allowed to ask the Federal Court to review the transport regulator’s decision.

The CTA is a regulator that also acts as a quasi-judicial tribunal reviewing, among other things, passenger complaints against airlines. It can order airlines to pay passengers up to $1,000 in compensation for lengthy delays caused by factors deemed to be within their control and unrelated to safety.

In court documents reviewed by The Globe, Air Canada called the CTA decision on the passengers’ complaint “unreasonable.”

The complaint involves Kelowna residents Andrew Dyczkowski and Anna Kaczmarek, who in January of 2020 experienced a flight delay from Vancouver to Toronto while travelling with Air Canada that caused them to miss their connection to Costa Rica.

Mr. Dyczkowski and Ms. Kaczmarek’s plane was grounded because of a faulty door, according to the documents. But Air Canada argued it didn’t owe compensation because the main cause of the eventual two-hour delay was bad weather, a factor outside of its control.

The CTA officer, however, was ultimately unpersuaded that the delay was out of Air Canada’s control and ordered it to pay $1,000 each to Mr. Dyczkowski and Mr. Kaczmarek.

Peter Fitzpatrick, a spokesperson for Air Canada, said the transport regulator has been hiring new complaint resolution officers (CROs) to manage passenger claims, as part of the recent changes.

“As an expert tribunal, it is important that the CTA ensures that its CROs have the required aviation expertise to assess operational evidence coming from carriers and incorporate it fully into their decision-making,” Mr. Fitzpatrick wrote in a statement via e-mail.

“In such cases where we believe the complaint was not assessed properly, our only recourse is to seek review at the Federal Court,” he added.

In the CTA decision concerning Mr. Dyczkowski and Ms. Kaczmarek, the CRO said an Environment Canada weather report Air Canada had submitted as part of its evidence was of little value because the airline had failed to provide a plain-language explanation of its significance to the case. But the officer also found that Air Canada had insufficiently substantiated other weather-related arguments.

Sau Sau Liu, a spokesperson for Transport Canada, said via email that the CTA does not comment on specific cases, noting that “the new resolution process for air travel complaints doesn’t prevent passengers or airlines from challenging decisions in Court.” The CTA is an independent orgnaization that is part of the transport and infrastructure portfolio.

The federal government moved to strengthen passenger rights after a year of airline travel chaos and a swelling backlog of complaints before the CTA. Among other things, the changes shortened the time airlines have to respond to complaints.

But the risk that airlines will turn to the courts to get a new answer on complaints already examined by CTA officers is a serious flaw, Mr. Lawford said.

“It’s very intimidating for a consumer to be part of a legal action in Federal Court over filing a complaint,” he added.

Editor’s note: A previous version of this article implied the Public Interest Advocacy Centre flagged a specific concern about legislative changes making it easy for airlines to seek judicial reviews of passenger complaint decisions. In fact, the organization had flagged more general concerns about the amendments. This version has been updated.