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Finnair Fiasco from 2016

SandyS

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Just received this email and not sure what to think. I had long since given up.


Hi,

I ask both of you to respond to this email individually, thank you.

This email concerns the flight delay reimbursement that IfDelayed has taken care of for you. Attached you can find the judgement given in your case. Unfortunately, there is not an English version available.

Background if the issue: IfDelayed has made a contract with you about your flight delay. IfDelay has bought litigation services from Lakitoimisto KPF (law firm KPF). In the agreement between IfDelayed and KPF it was agreed that KPF shall take care of the legal process and IfDelayed shall manage all the correspondence with their customers, i.e. the flight customers. However, it has come to our attention that IfDelayed has neglected their responsibilities on informing their customers from the start of 2020. KPF heard about this only after contacting the flight customers. We have not been able to reach the contact persons of IfDelayed after we found out about their bankruptcy.

A Swedish company Insurello AB bought the brand of IDelayed. We have discussed the matter of litigation costs with them during autumn 2020. Unfortunately, Insurello has not been willing to cover for the litigation costs that have been sentenced or are waiting for the judgement even though Insurello has bought the brand that promised that the flight customers shall not be liable for these costs.

In your case the district court sentenced Finnair to win the case and sentenced you to be liable for their litigation costs. We appealed to the court of appeals. The right to appeal was granted, so your case is now in the court of appeals. Due to the unclear situation about IfDelayed we asked the court to halt the legal process. How the case continues depends on how you wish to proceed (options below).

KPF considers that this situation is not fair for the flight customers. In the agreement between IfDelayed and the flight customers IfDelayed guaranteed that the flight customers shall never be liable for any costs. This is not true after the bankruptcy and it is unlikely IfDelayed has enough assets to cover the litigation costs. It also means that IfDelayed is not able to cover our work we have done for the cases.

This situation is very difficult for the flight customers and we have worked hard to try to solve this problem. As a result, we have decided the following about the options:

  1. If you wish to continue the legal process, we will continue it so that KPF will not bill you for any of our work we have already done for it or will do in the future. This also includes the payment the court collects for filing the claim.
In this option KPF would continue the legal process so that, we demand the court to moderate the flight company’s litigation costs the flight customers are sentenced to pay for due to the bankruptcy. Please notice that if the proceedings are wished to continue, this can raise the litigation costs of the flight company. We cannot give an estimation what the court would decide on this matter.

  1. If you do not wish to continue the legal process, we will inform the court about this and you are liable for the litigation costs the court sentences you to pay for the flight company, if Finnair decides to collect the sum. The sentenced sum is 6.000 euros + penalty interest 7 % from 12.3.2020.
You can take your time to think about this. We hope for an answer on Friday 30th of October at the latest, so we can inform the court how you wish to continue.


******

Foreign clients outside of European Union: If Finnair starts the enforcement process on the judgement that you were sentenced to pay for the legal fees, you are going to be responsible for the litigation costs of Finnair announced in the sentence. If Finnair does not start the process, the sentence is not going to be carried out and you do not have to pay. However, we do not know what Finnair will do.
 

33kft

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What sort of extortion is this? I don't know what the backstory is but that's outrageous if true?

Edit to say: I do assume having read this over a few times that Finnair would likely not pursue costs if they were aware that it would be passed on to customers, but who really knows? Having a 6K EUR liability on your head and having to decide between perhaps increasing it in the hope of reducing it, or otherwise giving up, is not a great option to be faced with.
 
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Happy Dude

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So you used a third company ("no win no fee" - except in bankruptcy) to chase Finnair for compensation for something, and now that company has gone bankrupt and subsently bought by a fourth (Swedish) company who lost to Finnair in appeals court and you're now being pursued for those costs?
 

33kft

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I would perhaps rewrite it slightly:

So you used a third company ("no win no fee" - except apparently in bankruptcy) to chase Finnair for compensation for something, and now that company has gone bankrupt and subsequently bought by a fourth (Swedish) company. Meanwhile, a fifth company (Law Firm) who was pursuing the case on behalf of the third company lost to Finnair in appeals court and somehow the fourth company has denied liability for those costs, so you're now being pursued for those costs?
 

MEL_Traveller

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It's an interesting case! This is one of the many EU261 claim companies for things like flight delays, cancellation or downgrades. They handle your claim and if successful keep ~30% of the fee (give or take).

Of course if they're not successful, you're supposed to pay nothing.

To take Finnair to court they must have thought they had a pretty good case... most of these companies have direct access to aviation systems and can work out the exact reason for the delay or downgrade.

I would *never* have contemplated an issue like bankruptcy leaving me with a debt using one of these companies. So I feel for the OP.

I wonder what the risk would be if the OP did nothing and simply ignored any demand that came through? Perhaps advise the lawyers you are not resident in Europe and see if that means Finnair is willing to drop the case?
 

SandyS

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The back story to this can be read under Finnair Fiasco. Since it’s from early 2016, I couldn’t put any other replies on the thread.
When I received this email I thought it was a scam at first.
As previously mentioned, it was a no win no fee scenario. After the initial correspondence with Ifdelayed and a couple more emails saying they were still pursuing it, I heard nothing and gave up. I’m shocked to see this. They have only contacted me by email (even though I provided IFdelayed with my home address )and it just so happens I still have the same email whereas my partner doesn’t, so they then sent me an email asking me to pass it on. I haven’t responded. Not really sure what to do.
 

33kft

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Just read your original thread at: Finnair Fiasco

Wow, what a journey. Here's the text you quoted from IfDelayed in the previous thread:

Due to the airline's reluctance to pay the standard compensation for flight delay in accordance with EU261 / 2004, we ask for permission to sue the airline in the District Court in Finland.

Here are the terms of our service:

By responding to this message affirmatively, you agree that an agent appointed by Ifdelayed AB may represent you against the airline. Under no circumstances will you be liable to pay any costs or other penalties if we do not win your case. If we win your case, our agent may charge the airline for the costs accepted by the District Court. In addition we may charge the airline for the costs generated by our collection operations, both before and during the trial. If we win a standard compensation under EU261/2004, we will charge a maximum of 25% (incl. VAT) of the won compensation.

We will also require the airline to pay our fee on behalf (25% VAT incl.) of you. If this demand were to succeed, this would mean that you will receive the full amount of the standard compensation. Due to the uncertainty of the current legal situation, the success of this requirement is not yet certain.

Unfortunately the judgement they sent you is in Finnish but it would be interesting to have it translated to see exactly what the court ordered - ie who were the plaintiffs by name (was it those being represented or the law firm) and who exactly they registered a judgement against for costs. I think reading that and having your own legal representative go over the email, judgement and anything you signed would paint a clearer picture.
 
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SandyS

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I am also wondering if this is just speculative. What happens if you don’t receive the email?
 

odysseus

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Not receiving the email is the same as any other default. It's not their responsibility to keep your email up to date, so legally the judgement is still against you. As per the legal firm's statement though, it is up to Finnair whether they want to pursue collection.
 

pauleg

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Just received this email and not sure what to think. I had long since given up.


Hi,

I ask both of you to respond to this email individually, thank you.

This email concerns the flight delay reimbursement that IfDelayed has taken care of for you. Attached you can find the judgement given in your case. Unfortunately, there is not an English version available.

Background if the issue: IfDelayed has made a contract with you about your flight delay. IfDelay has bought litigation services from Lakitoimisto KPF (law firm KPF). In the agreement between IfDelayed and KPF it was agreed that KPF shall take care of the legal process and IfDelayed shall manage all the correspondence with their customers, i.e. the flight customers. However, it has come to our attention that IfDelayed has neglected their responsibilities on informing their customers from the start of 2020. KPF heard about this only after contacting the flight customers. We have not been able to reach the contact persons of IfDelayed after we found out about their bankruptcy.

A Swedish company Insurello AB bought the brand of IDelayed. We have discussed the matter of litigation costs with them during autumn 2020. Unfortunately, Insurello has not been willing to cover for the litigation costs that have been sentenced or are waiting for the judgement even though Insurello has bought the brand that promised that the flight customers shall not be liable for these costs.

In your case the district court sentenced Finnair to win the case and sentenced you to be liable for their litigation costs. We appealed to the court of appeals. The right to appeal was granted, so your case is now in the court of appeals. Due to the unclear situation about IfDelayed we asked the court to halt the legal process. How the case continues depends on how you wish to proceed (options below).

KPF considers that this situation is not fair for the flight customers. In the agreement between IfDelayed and the flight customers IfDelayed guaranteed that the flight customers shall never be liable for any costs. This is not true after the bankruptcy and it is unlikely IfDelayed has enough assets to cover the litigation costs. It also means that IfDelayed is not able to cover our work we have done for the cases.

This situation is very difficult for the flight customers and we have worked hard to try to solve this problem. As a result, we have decided the following about the options:

  1. If you wish to continue the legal process, we will continue it so that KPF will not bill you for any of our work we have already done for it or will do in the future. This also includes the payment the court collects for filing the claim.
In this option KPF would continue the legal process so that, we demand the court to moderate the flight company’s litigation costs the flight customers are sentenced to pay for due to the bankruptcy. Please notice that if the proceedings are wished to continue, this can raise the litigation costs of the flight company. We cannot give an estimation what the court would decide on this matter.

  1. If you do not wish to continue the legal process, we will inform the court about this and you are liable for the litigation costs the court sentences you to pay for the flight company, if Finnair decides to collect the sum. The sentenced sum is 6.000 euros + penalty interest 7 % from 12.3.2020.
You can take your time to think about this. We hope for an answer on Friday 30th of October at the latest, so we can inform the court how you wish to continue.


******

Foreign clients outside of European Union: If Finnair starts the enforcement process on the judgement that you were sentenced to pay for the legal fees, you are going to be responsible for the litigation costs of Finnair announced in the sentence. If Finnair does not start the process, the sentence is not going to be carried out and you do not have to pay. However, we do not know what Finnair will do.
Wow!!! Diabolical problem/situation!!
 
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Mattg

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Can Finnair and/or this law firm really legally compel you to pay money for a service when your original contract stated that there was no fee involved? (Genuine question.)

You were never consulted about any of these things that happened in the background, and never agreed to pay any of that money, so that's a huge bait & switch. What a clustermess.
 

MEL_Traveller

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Can Finnair and/or this law firm really legally compel you to pay money for a service when your original contract stated that there was no fee involved? (Genuine question.)

You were never consulted about any of these things that happened in the background, and never agreed to pay any of that money, so that's a huge bait & switch. What a clustermess.

I'm not sure it's not a case of bait and switch. The problem is the original claims company went bankrupt.

The original claims company was unsuccessful in getting compensation for a delay from Finnair. They wrote to the OP suggesting they take it to court. The claims company engaged a firm of lawyers to do this.

The case was unsuccessful, with Finnair winning and getting costs awarded to them.

If the claims company had still been around, that would have been the end of the matter. They accepted all costs and risks. They would also have paid the lawyers and paid the judgement on behalf of the OP.

The lawyers are now writing to the OP. It doesn't look like they are asking for money for their services... but they are advising that the judgment for costs is sitting in the background.

Bait and switch? Only if the original company had reneged on their deal. That didn't happen here.

We need to find out who brought the case... if it was the OP (via the lawyers) the judgement will be against the OP. If it was the claims company, the judgement will be against the claims company. But it doesn't sound like it is the latter.

Mattg - I wonder if this is a question for your legal contact in Germany you interviewed for one of your podcasts?
 

SandyS

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The judgement attached to their email is 32 pages long. Using Google Translate, I've translated the last page.
I guess my question now is if they are likely to pursue us?

The District Court finds that the reason for the delay was a latent software design error identified by the manufacturer, which therefore applies to all machines in the refueling system of which such software is used. According to the report submitted by Finnair, there has been no indication of the defect at that stage, as the defect has been the manufacturer's first case. On the basis of the evidence, it cannot be concluded that Finnair failed to take any reasonably required measure that could have avoided the delay. Finnair could not have prepared for a fault that was not yet known even to the aircraft manufacturer, and thus no instructions could have been given to the airlines for it.

According to an experienced witness, Finnair could not have prevented the problem in any way or managed it in advance. The District Court has no reason to assess the situation differently on the basis of the report presented.

The District Court finds that Finnair has fulfilled its burden of proof. The action must therefore be dismissed

In those circumstances, there is no need to rule on the applicant’s right to claim costs.

Since the applicants have been unsuccessful, they must be ordered to pay the costs of the other party, in accordance with Chapter 21, Section 1, of the Rules of Procedure. The amount of the costs incurred by the defendant is undisputed and reasonable in relation to the nature and extent of the case.

The applicants have requested that liability be settled. In the present case, the applicants are individuals and the airline is the other party. The plaintiffs have given a power of attorney to handle the matter to an agent appointed by IfDelayed's power of attorney or an expert appointed by him, as OTM Paukku has acted in this case.

Defendant has invoked the terms of IfDelayed. It is not disputed that those standard terms do not apply to the contractual relationship between the applicants and IfDelayed. Juho Eloranta's e-mail dated 18 June 2018 also confirms that Sandys will not incur any costs if the claim is not approved.

The District Court finds that, under the standard terms and conditions, IfDelayed only charges its customers a share of any compensation that may be paid to the customer and receives any the costs of the proceedings if the action is successful. The terms state that all legal costs will be borne by IfDelayed if the action is unsuccessful. Accordingly, there must be no disparity between the parties which would justify the conciliation of costs. Nor is the matter to be regarded as ambiguous within the meaning of Chapter 21, Section 8c of the Code of Judicial Procedure. There is therefore no justification for justification.

OPINION OF THE JUDGMENT
The action is dismissed.

SandyS & partner is jointly and severally liable to Finnair Oy for its legal costs
EUR 6,000.00 and interest on arrears in accordance with section 4 (1) of the Interest Act as of 12 March 2020.
An appeal against the judgment may be lodged with the Helsinki Court of Appeal. Dissatisfaction must be reported at the latest 2/19/2020
 

Kerrodt

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This sounds like a shakedown to me.

You don't (I assume) have any direct contractual relationship with KPF, therefore they have no contract to enforce with you. KPF would be an unsecured creditor of IfDelayed and have to line up with all other creditors. That would be the end of the line if IfDelayed have no funds to distribute.

If every bankruptcy worked like this (i.e. unsecured creditors of a bankrupt company going after the customers of the bankrupt company for payment plus costs plus interest) then the whole world would be in a complete mess of bankruptcies and debt chasing.

However, Finnish law might be different and allow some sort of pass through of liability. Getting some free/cheap advice on Finnish law may help.

In the meantime, do not reply to the emails, do not engage with them, do not admit to anything, and do not pay them a single Euro.
 

SandyS

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Yes, I think it sounds like a shakedown but I could be wrong. I haven't replied to any emails from them.
 

MEL_Traveller

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This sounds like a shakedown to me.

You don't (I assume) have any direct contractual relationship with KPF, therefore they have no contract to enforce with you. KPF would be an unsecured creditor of IfDelayed and have to line up with all other creditors. That would be the end of the line if IfDelayed have no funds to distribute.

If every bankruptcy worked like this (i.e. unsecured creditors of a bankrupt company going after the customers of the bankrupt company for payment plus costs plus interest) then the whole world would be in a complete mess of bankruptcies and debt chasing.

However, Finnish law might be different and allow some sort of pass through of liability. Getting some free/cheap advice on Finnish law may help.

In the meantime, do not reply to the emails, do not engage with them, do not admit to anything, and do not pay them a single Euro.

This is not the lawyers asking for money.

The judgement is for Finnair, against the applicant (the OP). Finnair wants its money... the lawyers seem to have indicated previously that they won't be paid for their time.


The District Court finds that, under the standard terms and conditions, IfDelayed only charges its customers a share of any compensation that may be paid to the customer and receives any the costs of the proceedings if the action is successful. The terms state that all legal costs will be borne by IfDelayed if the action is unsuccessful. Accordingly, there must be no disparity between the parties which would justify the conciliation of costs. Nor is the matter to be regarded as ambiguous within the meaning of Chapter 21, Section 8c of the Code of Judicial Procedure. There is therefore no justification for justification.

The bold sentence seems incomplete and may be important? The first three quarters of the paragraph seems to indicate the court acknowledges ifDelayed would accept all liability for any costs incurred. not sure how it jumps from there to 'SandyS is liable'.

it looks like Finnair was successful in arguing an inherent manufacturing defect... there is some relatively recent information on this by this other claims company: Can I Claim Flight Compensation For A Technical Defects | Bott and Co

As mentioned above - is this something Mattg's legal rep from Germany might be able to provide assistance? It's certainly an unusual case and might be of interest to them.
 

SandyS

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Its my understanding the lawyers aren't asking for any money (IfDelayed weren't meant to cost me anything either), it just seems strange, so I haven't replied yet. And its very lucky (?) I even received the email because my partner no longer has the same email and that could have been me also. I would have thought in such a matter they would write to you but I don't know, so interested in any opinons before I decide what to do. I do wonder if Finnair would pursue us.

I used Google Translate, so not the most reliable translation. I have attached the original judgement they emailed for anyone who might be interested.

*** 27 Oct: Attachment removed as requested by member ***
 
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Mattg

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As mentioned above - is this something Mattg's legal rep from Germany might be able to provide assistance? It's certainly an unusual case and might be of interest to them.

FWIW I asked Matthias, and he said he's not familiar with Finnish procedural and bankruptcy law.
 

MEL_Traveller

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Thanks mattg. 👍 I was hoping he might have been able to give his thoughts on whether or not Finnair was likely to go after the costs given it is a non-citizen and non-resident (or in other words.. does the OP need to be worried!)
 

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