across the bar

can we sue iceland?

by Steve - Posted 23 April 2010

There you are, a little Eskimo sitting chilling at your fishing hole - the next thing you know you are being showered in molten lava and ash. Who would have thought that Iceland was such a dangerous place beyond Bjork and the odd hungry polar bear!

The recent eruption of Eyjafjallajokull (hat tip for proper pronunciation) left millions of airline passengers grumpier than a hungry polar bear. Now that the dust has settled, passengers want to be paid compensation for losses suffered through cancelled direct and connecting flights, other transport costs, hotel reservations and unpaid salaries.   

With the sheer magnitude of the losses already suffered by the airlines (which is said to be more than the loss suffered in the aftermath of September 11), it comes as no surprise that the airlines are arguing that they are not liable because a volcanic eruption is an Act of God which made it impossible for them to perform under their contracts with passengers.

In SA law, an Act of God (or force majeure in fancy legal latin), is regarded as an event that directly and exclusively results from the occurrence of natural causes that could not have been prevented by the exercise of foresight or caution. If a contract becomes impossible to perform as a result of an Act of God, neither party may be held liable for any loss suffered by the other.

However, if the impossibility is temporary, the parties may not be entitled to cancel and may have to accept delayed or alternative performance (in this case, a new flight). What is regarded as temporary will be a question of fact in each case.

In World Leisure Travel v Georges (2002 WLD), Mr Georges cancelled a family package tour to Mauritius he bought from WLT when his flight to the island was cancelled due to a cyclone that hit the night before he was due to depart. A clause in the fine print of his contract stated that cancellation of the tour within 2 weeks of the date of departure would lead to the entire tour price being forfeited.

After the flight was cancelled, Mr Georges sent a fax to WLT also cancelling his tour and claiming a full refund of the tour price. The legal basis for the cancellation was that the contract had become impossible to perform. Unfortunately the court disagreed and held that, because SAA had laid on a special flight 2 days later, the impossibility was only temporary. Mr Georges was therefore not entitled to cancel the contract and forfeited the full tour price.             

If you are one of the unfortunates that have just spent the last 6 days on a cold airport floor, this may not come as good news. But hey, spare a thought for the Eskimos or quit your job and open a travel insurance agency.