The Lod District Court has ruled that Israeli consumer protection law does not apply to foreign airlines that have no representative office in Israel.
The ruling was handed down in a class action filed against British low-cost airline EasyJet five years ago. The lawsuit claimed that EasyJet was in breach of Israeli law in not returning money to people who booked flights and cancelled within the framework provided by Israel's Consumer Protection Law.
The law in Israel allows cancellation of a transaction made remotely (by telephone or via the Internet) within fourteen days of the purchase date, and up to seven days before a flight, and stipulates that the consumer will receive a cash refund less 5% or NIS 100. The lawsuit estimated the damage suffered from EasyJet's failure to apply the law in the millions of dollars.
Those hurt by the conduct of EasyJet are not just consumers who thought that an airline with such extensive operations in Israel must be subject to Israeli law, but also local travel agents, who found themselves obliged to comply with Israeli law and refund fares to customers who cancelled flights, but unable to recoup from the airline. Many travel agents stopped selling flights of companies with no representation in Israel, chiefly the three main low-cost airlines, EasyJet, Ryanair, and Wizz Air.
Wizz Air did apply to be able to establish a hub in Tel Aviv but was refused, and established its regional hub in Cyprus instead.
The travel agents have been pressing for the law to be amended so that they will be exempt from the fourteen-day cancellation rule and will only be obliged to pay refunds in accordance with the terms and conditions of the ticket sold.
The judge ruled that a local representative appointed by an airline has limited authority, and that since EasyJet used ground services provided by an external contractor (QAS), even though its personnel wore EasyJet uniforms, there were insufficient grounds for making it subject to Israeli consumer law. He also pointed out that the open skies agreement between Israel and the European Union did not impose Israeli consumer law on foreign airlines flying to and from Israel.
EasyJet argued that it operated from London, and that although it maintained an Internet site in Hebrew, the booking process was in English and payment was in foreign currency and not in shekels. It also pointed out that it did not operate through travel agents and offered no customer service center in Israel. It said that it stayed on the ground in Israel between flights for less than an hour.
The judge found that applications for refunds for cancelled flights on EasyJet were governed by English law, and that the lawsuit therefore had no basis. He did not award costs "in consideration of the novelty of the matter."
Published by Globes, Israel business news - en.globes.co.il - on June 15, 2020
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