Finnair Fiasco from 2016

[Anna]

although costly to pursue overseas debts, there is a bilateral agreement with Australia.

Which bilateral Finland - Australia agreement allows enforcement of 'debts'?

 

[MEL_Traveller]

Which bilateral Finland - Australia agreement allows enforcement of 'debts'?

There's a link to the draft proposal and consultation paper in post 34 of this thread. I'm not sure if it's got anywhere yet. Some more info here: Recognising and enforcing foreign judgments

Worth seeking some legal advice on Finnair's ability to chase this.

 

[Anna]

Yes but that is not a bilateral Finland-Australia agreement, that is a (still apparently draft) multilateral agreement.

I also note FWIW that the definition of 'judgment' in the Foreign Judgments Act 1991 (Cth) does not include 'costs order'. Under Australian law a judgment and a costs order are different things and you can't substitute the one term for the other. I have no idea about the position under Finnish law though.

 

[MEL_Traveller]

Yes but that is not a bilateral Finland-Australia agreement, that is a (still apparently draft) multilateral agreement.

I also note FWIW that the definition of 'judgment' in the Foreign Judgments Act 1991 (Cth) does not include 'costs order'. Under Australian law a judgment and a costs order are different things and you can't substitute the one term for the other. I have no idea about the position under Finnish law though.

Agree.

I know it may feel like throwing good money after bad, but I think some legal advice from an Australian lawyer would be a good idea for those faced by Finnair's claims that they can enforce the judgment here.

 

[SandyS]

Agree.

I know it may feel like throwing good money after bad, but I think some legal advice from an Australian lawyer would be a good idea for those faced by Finnair's claims that they can enforce the judgment here.

Thank you for the comments, they are very helpful.
I have spoken to an Australian lawyer who pretty much said the same as TheFinnishLawyer.

He said that they technically can collect the money but would need to apply under Common Law.
In his opinion, it would be very costly and time consuming on their part and he personally wouldn't lose any sleep over it but there is a risk because yes, they are able to apply to collect the money.

The whole thing is unfair on so many levels.

 

[MEL_Traveller]

Thank you for the comments, they are very helpful.
I have spoken to an Australian lawyer who pretty much said the same as TheFinnishLawyer.

He said that they technically can collect the money but would need to apply under Common Law.
In his opinion, it would be very costly and time consuming on their part and he personally wouldn't lose any sleep over it but there is a risk because yes, they are able to apply to collect the money.

The whole thing is unfair on so many levels.

It is very unfair

The other option was to go to one of the bigger bloggers like Onemileatatime, who would probably be quite interested in this story. No idea what the outcome might be... it might not change Finnair's resolve.

However, if you decide to go down the path of just ignoring it, you probably don't want to attract any undue attention. 'Going global' might just make Finnair pursue the case

 

[SandyS]

Yes its a funny one.

This is such a unique circumstance with the company going bust.
It doesn't do Finnair any good for their PR but in the end, people don't really care. They see a cheap fare and book it, so I doubt Finnair care about the PR.

Finnair probably care far more that they have won their case and probably see themselves as champions for the airline industry and would love to see these firms that do no win/no fee claims go bust.

In some cases, a delay is an uncomfortable annoyance and if you get some compensation, great. I've been delayed for 4 hours on an interstate flight with Jetstar! I try to build in buffers should stuff happen.
This Finnair flight delay was far more than that for me. It was so stressful and costly.

I'm not interested in punishing an airline or getting upset about something that can't be helped and my heart goes out to all the travel industry staff affected by Covid but I do believe that airlines should be held accountable for avoidable, lengthy delays that are the result of greed.

 

[AFF Editor]

I recently spoke to @SandyS and @nicnet about their ordeal on the AFF on Air podcast. You can listen to the interviews with them here: Podcast Episode #66: EU261 Claims Cost Finnair Passengers Thousands

And for a summary of what happened and why, you can read today's AFF Gazette article here: Finn-UNFair: Thousands Lost in Compensation Nightmare

This really has been a series of unfortunate events. Although it appears that no individual or organisation has actually broken any laws, it still seems very unfair on the individuals caught up in this mess.

 

[MARTINE]

I recently spoke to @SandyS and @nicnet about their ordeal on the AFF on Air podcast. You can listen to the interviews with them here: Podcast Episode #66: EU261 Claims Cost Finnair Passengers Thousands

And for a summary of what happened and why, you can read today's AFF Gazette article here: Finn-UNFair: Thousands Lost in Compensation Nightmare

This really has been a series of unfortunate events. Although it appears that no individual or organisation has actually broken any laws, it still seems very unfair on the individuals caught up in this mess.

Dear Sandy S and nicnet I feel so sorry for what you have been through and the stress this has undoubtedly caused. You have my sympathies… only ‘good’ to come out of this- I doubt anyone on this site would ever use Finnair. To ‘Finnish Lawyer’ the willingness of strangers to help out AFF community is wonderful and as I read through their contributions I felt a glimmer of relief. We have all followed this and send you best wishes. This too shall pass…

 

[TripleB]

It's actually really difficult (administratively) to enforce a foreign judgment (excluding NZ) in Australia.

I would imagine that it would cost at least $10k to get the order certified, translated, apostilled, and registered in an Australian court. Only then can they go and take recovery action in Australia. It's really not straightforward. Based on my super quick reading of the filing fees, the court filing fee alone will be north of $4k.

Also it's not something you can get your usual (cheap) debt collecting lawyer to do - this sort of process is way beyond their skillset. You are going to have to go up the foodchain of lawyers a bit (which will significantly add to the costs).

The registration of foreign judgments is pretty straightforward for NZ judgments, administratively difficult for a scheduled list of countries (think UK, former British colonies in Canada, parts of US, Singapore and some civil law countries, and then I don't even know how you'd register a judgment from the rest of the world. Finland doesn't appear to be on the list of 'administratively difficult' countries - which means that it's going to be 5 stars for difficulty.

There's a fair chance that their threats of debt collectors and legal action in Australia are a bit hollow.

 

[SandyS]

It's actually really difficult (administratively) to enforce a foreign judgment (excluding NZ) in Australia.

I would imagine that it would cost at least $10k to get the order certified, translated, apostilled, and registered in an Australian court. Only then can they go and take recovery action in Australia. It's really not straightforward. Based on my super quick reading of the filing fees, the court filing fee alone will be north of $4k.

Also it's not something you can get your usual (cheap) debt collecting lawyer to do - this sort of process is way beyond their skillset. You are going to have to go up the foodchain of lawyers a bit (which will significantly add to the costs).

The registration of foreign judgments is pretty straightforward for NZ judgments, administratively difficult for a scheduled list of countries (think UK, former British colonies in Canada, parts of US, Singapore and some civil law countries, and then I don't even know how you'd register a judgment from the rest of the world. Finland doesn't appear to be on the list of 'administratively difficult' countries - which means that it's going to be 5 stars for difficulty.

There's a fair chance that their threats of debt collectors and legal action in Australia are a bit hollow.

Yes, the lawyer said it was very difficult and expensive however, legally they can enforce it. If they have won in Finland, they have won their case.

I cannot afford another $14k should they decide to go ahead.

Finnair told me they would definitely go ahead that it was "my decision to initiate a court case so....
They would not even provide a translation for me. KPF advised I pay also.

 

[TripleB]

There's no doubt that they legally can enforce it against you in Australia. I'm just not so sure that they would actually do it.

It's 5 stars for difficulty and cost for just $14k.

 

[nicnet]

It's 5 stars for difficulty and cost for just $14k.

Give it to an Australian lawyer, and then pass ALL the costs on to Sandy?
Doesn't sound that difficult ....

 

[Anna]

I doubt anyone on this site would ever use Finnair.

I would still use Finnair if route and timing suited. But this thread has taught me to be very careful before joining in any EU compensation cases because they are not 'no win no costs' for the punters.

Referring back to the original story, another thing this fiasco is a lesson about - do not book international flight sectors that 'connect' if they are with different airlines and are not on the same booking reference. You will have all sorts of problems if you cannot make the connection, as the OP found out.

pass ALL the costs on to Sandy

Highly unlikely they would get indemnity costs. However even party-party costs would be a few thousand, more than an average individual wants to be up for.

 

[TripleB]

Finnair no doubt had thousands and thousands of passengers who were impacted by the A350 issues. They no doubt fought this one for 2 reasons (1) to try and keep the floodgates closed and (2) to play for time.

Why play for time? Well it's much harder for the plaintiff EC261 claim firms to drum up business by running an advertising campaign 3 or 4 years after the fact.

As for enforcing the judgment in Australia - it's anything but simple.

Finnair will need to be mucking around with official translations, departments of foreign affairs, finding an Australian lawyer who knows what they are doing in registering a foreign judgment (or paying for the privilege of a lawyer learning how to do it), filing fees in the Federal/Supreme Court and then they have to hope that the person they are chasing is good for the money. Sure there is potential costs exposure for Sandy - but it won't be anything like 100% of Finnair's costs.

There's a difference between what a client pays their own lawyer (called solicitor-client costs) and what is recoverable from the other side. The usual costs order against an unsuccessful litigant is that they pay 'party-party' costs - which are usually between 45 and 55% of the actual costs. If you can convince a judge that you are entitled to indemnity costs (and there are a stack of rules and judicial discretion involved) then you might get between 70 and 80% of the actual costs.

In the circumstances, I suspect that Finnair's legal team (and the people in the business instructing the lawyers) will be very glad to have kept the floodgates closed. They might chase the Finnish and EU resident unsuccessful plaintiffs for $14k ... but I just don't see them throwing good time and money chasing $14k in Australia. If the situation was a Finnish resident owing an Australian airline $14k in similar circumstances - there is little chance that they would chase that kind of sum in Finland.

 

[nicnet]

Sure there is potential costs exposure for Sandy

And there you have it.
Sandy probably doesn't want to gamble any more, and probably prefers to cut her losses.

 

[nicnet]

In response to the article, Finnair says:
"We always recommend contacting us directly to ensure open and transparent communication about the merits of the case before commencing legal actions."
This comment is as value-less as it is laughable.

We contacted them numerous times, and eventually Finnair came back with:
"If you are not satisfied with our decision regarding the compensation, you may contact the Consumer Authority".
So we did, and the Authority came back with the same view as us. Which Finnair then decided to ignore.

 

[TripleB]

Not wanting to run the risk of potentially incurring further costs is a perfectly understandable strategy. I totally get that. It's easy for me to sit here an opine on the practicalities, legal hurdles and costs associated with Finnair enforcing the $14k judgment in Australia when it's not directed at me.

If you are going to go down the road of just paying up then you may as well have a go at trying to settle for something less than the judgment.

If I were in Finnair's legal team and you were to offer me 50% then I'd bite your hand off to take it.

 

[AVV]

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.

 

[MEL_Traveller]

Since the OP may have little to lose .... has there been any consideration of sharing this with some of the bigger blogs such as Onemileatatime, ThePointsGuy and Viewfromthewing? Perhaps even getting matt's article syndicated?

The publicity might not get Finnair to change its mind, or stop people flying Finnair... but it might give negative publicity to the claims firms in general, and possibly spur the 'new' ifDelayed to cover the costs out of its own pocket (or risk losing business to other firms).