Recently in Hungary, a regional court stated that the consumer protection authority has general competence to deal with complaints about breaches of the EU Regulation regarding compensation to air passengers (e.g., it could impose a fine on airlines for not paying compensation) but that ordering the compensation itself is not included among the powers of the consumer protection authority in the applicable Hungarian laws. Thus,
the court decided to annul the decision of the authority on compensation.
The court emphasized that the compensation is considered a civil law claim so it should be decided by a court.
This decision came after the regional court submitted the question to the European Court of Justice (ECJ) for a preliminary ruling and where the
ECJ ruled that government authorities should be able to decide on compensation
if they are specifically authorized to do so by their local laws, which has not yet happened in Hungary according to the regional court.
This is a rather surprising decision, as so far in Hungary, most airline passengers have turned to consumer protection authorities for legal assistance if their flight was delayed or cancelled, and the authorities often decided that such airline passengers are entitled to compensation and even imposed fines on the airlines for nor paying it.
According to the interpretation of the Hungarian court, the Member States of the EU could authorize their national authorities to decide on individual complaints, however, the local legislation of the Member States shall include the appropriate procedural rules which are necessary to differentiate administrative and judicial procedures, in order to avoid the danger of forum shopping.
Earlier, the Supreme Court of Hungary declared that consumer protection authorities do have the power to decide on compensation so
there is a serious controversy in judicial case-law right now which needs to be resolved in the near future,
as the authority requested the Supreme Court of Hungary to review the final judgment of the regional court.
Currently in Hungary, airline passengers may turn to conciliation bodies which operate alongside chambers of commerce and industry to settle consumer disputes with airlines out of court, or the authorities can also initiate a public interest lawsuit at court to enforce consumers’ civil rights claims, such as compensation.
