In recent years, numerous claims have been filed alleging that airlines breached their statutory obligations under the Aviation Services Law (the “IASL”) – particularly the duty to inform and disclose passengers’ rights in the manner prescribed by Section 14 of the IASL. Plaintiffs often seek exemplary (statutory) compensation for such alleged breaches, and courts occasionally grant such claims and award exemplary compensation for these violations.
In a recent case, we successfully challenged such a court ruling. We appealed to the District Court, arguing that Section 11 of the IASL (which awards exemplary compensation) provides a closed list of scenarios warranting exemplary compensation, such as failure to provide statutory benefits following flight cancellations. However, this provision does not authorize such compensation for standalone breaches of the duty to inform or disclose information under Section 14 of the IASL.
We further addressed the claim that the failure to inform is linked to the failure to provide benefits in cases of flight cancellation (since passengers are not informed of their rights, they do not seek and the airline does not provide them with benefits), clarifying that exemplary compensation is a punitive remedy and must be construed narrowly.
The District Court accepted our position in full, reversed the lower court’s decision, and held clearly that exemplary compensation cannot be imposed for violations of the disclosure obligations set forth in Section 14 of the IASL. Beyond its direct impact on similar claims, this ruling may have broader significance, limiting the availability of exemplary compensation in other cases involving statutory breaches that fall outside the specific framework provided by the IASL.
This publication is provided as a service to our clients and colleagues, with explicit clarification that each specific case requires individual examination and discussion in writing.
The information presented here is of a general nature and is not intended to answer the unique circumstances of any individual or entity. Although we strive to provide accurate and available information, we cannot guarantee the accuracy of the information on the day it is received, nor that the information will continue to be accurate in the future. Do not act on the information presented without appropriate professional advice after a comprehensive and thorough examination of the specific situation.
