Canadian airline passengers could lose the ability to challenge compensation decisions under proposed federal legislation that would allow airlines to select private adjudicators to handle customer complaints.The Canadian Automobile Association (CAA), which operates 90 travel agencies across the country, is warning that changes contained in the federal government's omnibus budget legislation could undermine consumer protections and give airlines too much influence over compensation disputes.“No third party adjudicator’s decision should ever be binding on a consumer,” the association wrote in a submission to the Senate transport and communications committee.“Leaving a passenger with no opportunity to challenge the finding of a third party contracted by the carrier would be unfair.”Blacklock's Reporter said Bill C-31, A Second Act To Implement Certain Provisions Of The Budget, would permit airlines to enter into agreements with designated third parties to resolve passenger complaints.The proposed changes would allow carriers to select the organizations or individuals responsible for adjudicating disputes involving their own customers.Currently, passenger compensation complaints are handled by the Canadian Transportation Agency (CTA), which has accumulated a backlog of approximately 97,000 cases.Passengers are waiting an average of three years for their complaints to be resolved.CAA warned that allowing airlines to select and pay their own adjudicators could create conflicts of interest.“We have reservations about airlines handpicking their own contractor,” the association told senators.“This creates an incentive to focus on outcomes that support the carriers, those that would be funding them. Where is the oversight and enforcement of these relationships?”Canada introduced the Air Passenger Protection Regulations in 2019, establishing compensation requirements for passengers affected by flight disruptions, denied boarding and baggage problems.Compensation amounts cited under the regime range from $400 for a three-hour flight delay to $900 for passengers denied boarding because of overbooking.Additional compensation provisions include up to $2,100 for lost or damaged luggage and a maximum of $25,000 in general damages.According to the association, the maximum general damages award has never been issued..CAA acknowledged that Canada's existing passenger protection system has serious shortcomings but argued that transferring complaints to private adjudicators would not necessarily resolve them.“The air passenger protection regime in place today is far from perfect,” the association wrote.“It is regrettably neither efficient nor fully effective. It offers too many grey areas that both passengers and airlines are left to interpret.”The association said passengers frequently lack the information needed to determine whether they qualify for compensation or how much they should receive.“In many cases, passengers do not have the necessary information to determine what, if anything, they are owed.”CAA argued the federal government should address the complexity of the regulations rather than simply changing who decides complaints.“A third party will not fix the backlog if we must rely on the same complicated rules,” the association wrote.“The current Air Passenger Protection Regulations have caused the backlog, not solely the inefficiency of the Canadian Transportation Agency.”Another consumer advocacy organization, Air Passenger Rights, raised similar objections during a September 23 Senate committee hearing.Group president Gabor Lukacs warned that allowing airlines to choose their own adjudicators could compromise the independence of the complaint process.“The fact the airline chooses the adjudicator means they have some leverage,” Lukacs testified.He also argued that the current regulations contain numerous exceptions that make it difficult for passengers to obtain compensation.“Air Passenger Protection Regulations are filled with loopholes that shield airlines from liability and make the regime unnecessarily complex and unworkable,” he said.Lukacs told senators that even relatively small compensation disputes can require extensive documentation and lengthy reviews.“The regime is so complex a decision maker must review hundreds if not thousands of pages of documents, consuming a full working day on average, to resolve a mere $400 case,” he testified.“Private, third-party adjudicators will not render decisions any faster.”The proposed legislation comes as Ottawa faces mounting pressure to address delays in resolving airline complaints and improve the effectiveness of passenger protection rules.Both consumer organizations maintain that simplifying the regulations and ensuring independent decisions are essential to improving the system.They warn that allowing airlines to choose the adjudicators responsible for deciding complaints against them could leave passengers with fewer avenues to challenge compensation decisions
