The High Court has made the decision to strike out a representative action intended for passengers affected by flight delays, citing financial motivations as the primary factor behind the claim.
The case, introduced by Claire Smyth, aimed to secure compensation for individuals whose flights with major airlines, such as British Airways (BA) and easyJet, faced significant delays or cancellations from December 2016 to August 2022. However, the court found the primary motivation for the action questionable, as it appeared more aligned with financial gains for the funder rather than consumer redress.
Master Davison expressed scepticism towards Smyth’s intentions, noting that the claim was financed by her employer, John Armour, who stood to potentially gain substantial profits if successful. Smyth’s personal involvement with Armour dates back to her time as his yoga instructor, further complicating the perceived objectivity of her representation.
The High Court highlighted the lack of transparency concerning the financial arrangements. Notably, an earlier order permitted a 24% deduction from any awarded compensation under the guise of legal and funding fees, amassing over £70 million. However, the details surrounding these fees remain undisclosed.
Another critical issue was whether the action genuinely represented a collective interest, as required under CPR 19.8. Master Davison argued that the proposed class consisted of myriad divergent interests, necessitating individual assessments rather than a unified claim.
The court criticised alternative motivations behind the action, suggesting that the prominent financial backing overshadowed the purported consumer advocacy. Indeed, viable alternatives, such as the direct claim portals provided by the airlines, offered a more straightforward, cost-effective recourse for consumers.
Furthermore, Master Davison pointed to the opaque relationship between Smyth and Armour, raising concerns over her suitability as a representative for the affected consumers. This was compounded by the previous conduct of Armour, which involved regulatory scrutiny in New Zealand regarding securities pricing practices.
Given these factors, the judge concluded that the case could not proceed as a representative action and directed that Smyth should not act in such a capacity. The decision underscores the importance of transparent motives and interests in representative litigation, prioritising consumer welfare over financial gain.
The High Court’s decision to dismiss the representative action reflects broader concerns about the integrity and purpose of such claims, particularly when financial incentives outweigh genuine consumer advocacy.
