In December 2008, the European Commission put forward a proposal for a Regulation concerning the rights of passengers when travelling by sea and inland waterway. The Commission’s proposal creates a set of rights for passengers using maritime services on both domestic and international routes which are similar to the measures introduced for airline and rail passengers. The proposal is going through the co-decision procedure (ordinary legislative procedure) with QMV required at the Council. The Council has amended the Commission’s proposal as several provisions could have imposed too heavy administrative and financial burdens on carriers and national administrations. The Council and the European Parliament have recently reached an agreement on this proposal. The compromise deal was approved by the MEPs on 6 July. Consequently, the proposal will be adopted at second reading. Although the Commission’s original proposal has been improved, it still entails further administrative and financial burdens to operators. Adopting such proposal will result in better benefits for passengers however it also entails increased costs to operators which are likely to be passed on to passengers in the form of higher fares.

The Commission’s proposal covers domestic and international commercial passenger maritime and inland waterway services, including cruises within the Community. All Member States support the general objective of the proposal, ensuring non-discrimination of disabled persons and persons with reduced mobility as well as to strengthen passenger rights in general. However, several Member States, including the UK, questioned the wide scope of the proposal as regards the type of ship or the purpose of the journey.
Under the Commission’s proposal the Regulation would apply to passenger services and cruises between ports in the Member States or at ports in Member States. The Council has clarified it, in order to avoid distortion of competition between passenger services within and outside the EU. Hence, the Council has distinguished between passenger services where the port of embarkation is situated in a Member State and those where the port of embarkation is situated outside but the port of disembarkation is situated in a Member State. In this case, the draft regulation would apply if the service is operated by an EU carrier.

Moreover, the draft regulation would only apply to cruises where the port of embarkation is situated in a Member State.

The scope of the Commission’s original proposal was too broad covering all passenger services, despite of the number of passengers carried, the distance of the service and the purpose of the trip. Member states would have been solely allowed to exempt services covered by public service contracts providing that these contracts guarantee a level of passenger rights similar to those required by the Regulation. The Council has excluded from the scope of the draft regulation ships with not more than 36 passengers, ships with not more than three crew members, as well as passenger services over a distance of less than 500 meters one way.

However, whereas the Council has proposed that the Regulation shall apply to vessels carrying more than 36 passengers the MEPs wanted it to apply to vessels carrying 12 passengers or more. Under the agreement reached by the Council and European Parliament representatives the regulation will apply to ships carrying more than 12 passengers, as the MEPs have demanded. In this way, the legislation will cover more vessels whereas the Council’s proposal of 36 passengers could have limited its field of application. Excursion and sightseeing trips, other than cruises, have also been excluded from the scope of the regulation. Furthermore, Member States may exempt, for a period of two years, ships of less than 300 gross tons for domestic transport providing they “adequately” guarantee the rights of passengers under national law.

Under the draft proposal carriers would be required to offer tariffs which are non-discriminatory on grounds of nationality or residence. It also prohibits any discrimination on grounds of disability or reduced mobility as regard booking a trip or boarding a ship. It provides for special and free assistance for passengers with reduced mobility.

The Commission’s original proposal would have required carriers to ensure that all their staff attend disability-related training, even if they work in areas of the ship where they would not have to deal with persons with reduced mobility. Such provisions could have entailed considerable costs to operators. The amount of additional training which operators would have been obliged to provide to their personnel has been reduced. Under the current draft, just the personnel who provide direct assistance to disabled persons and to persons with reduced mobility must be trained in “disability and disability-assistance” whilst personnel responsible for the reservation and selling of tickets or embarkation and disembarkation must be trained in “disability-assistance.”

Disabled persons and people with reduced mobility must therefore be accepted for carriage and not refused transport on the grounds of their disability or lack of mobility, except for reasons which are justified on the grounds of safety and established by law. The port authorities and carriers are required to establish non-discriminatory access conditions for the transport of disabled persons and persons with reduced mobility.

The draft regulation provides for obligations to be imposed on carriers and terminal operators in case of cancellation or delay of any service, such as giving information, and providing assistance, including meals, refreshment and hotel accommodation, re-routing and reimbursement as well as compensation of the ticket price for all passengers in case of delay.

The Commission has based such provisions on the aviation model, however several member states, including the UK, argued that it is not appropriate to copy one system available in one mode of transport to another different mode of travel. Ports may not have catering facilities available, therefore some operators might find difficult to fulfil such requirements. Hence, the draft proposal now specifies that certain obligations would only apply where passengers depart from manned port terminals with certain facilities and staff.

Whereas the Commission has proposed that passengers shall be offered free of charge snacks, meals or refreshments in the event of cancellation or delays of 60 minutes or more, on a passenger service or a cruise, the Council has proposed 120 minutes. Under the compromise deal, adopted by the European Parliament, if a passenger service or a cruise is cancelled or delayed for more than 90 minutes, passengers departing from port terminals would be offered free of charge meals or refreshments “in reasonable relation to the waiting time, provided they are available, or can reasonably be supplied.” Moreover, if there is a cancellation or a delay in departure involving a stay of one or more nights, “where and when physically possible,” the carrier would be required to offer passengers, departing from port terminals, accommodation free of charge as well as transport to and from the port terminal and place of accommodation in addition to the snacks, meals or refreshments above-mentioned. There is a limit to the cost for accommodation to EUR 80 per night, for a maximum of three nights. However, these provisions would be ultimately interpreted by the European Court of Justice.

Moreover, in case of cancellation or delayed for more than 90 minutes on a passenger service, passengers will also be entitled to re-routing and reimbursement of the ticket price from the carrier.

Under the Commission’s original proposal, passengers would have been entitled to a refund of 25% of the ticket price for delays of between 60 and 119 minutes, 50% for delays over two hours and 100% if the carrier fails to provide rerouting after a two hour delay. The MEPs have accepted the Council's common position, hence, passengers would be entitled to a refund of 25 % of the ticket price for a delay of one hour in case of a journey scheduled to last four hours, a delay of two hours in case of a journey scheduled to last more than four hours, a delay of three hours in case of a journey scheduled to last more than eight hours, or a delay of six hours in case of a journey scheduled to last more than 24 hours. If the delay exceeds the double of the times above-mentioned the compensation shall be 50% of the ticket price.

These compensations would not be paid when the delay or cancellation has been caused by bad weather conditions and exceptional circumstances. There is also an exemption to the obligation of providing free accommodation if the cancellation or delay is caused by bad weather conditions. Moreover, there is no right to assistance and compensation when the passenger is informed of the cancellation or delay before buying the ticket or when the passenger causes the cancellation or delay.

The EU regulation establishing common rules on compensation and assistance to air passengers in the event of denied boarding, cancellation and long delay of flights, provides for compensation for cancellations but not for flight delays, hence maritime passengers will be entitled to more rights than air passengers. It is important to recall that the Secretary of State for Transport, Philip Hammond, has recently asked the Commission to review Regulation 261/2004, “(…) in light of the European Court of Justice decision of November 2009 which has resulted in some perverse and disproportionate consequences with respect to the financial impact on airlines of having to compensate passengers for delayed flights.”

Under the draft regulation, carriers and terminal operators are required to provide passengers with adequate information throughout their travel in accessible formats and in the same languages as those in which information is generally made available to all passengers. They are required to make sure that information on the rights of passengers under this Regulation is publicly available on board ships and in port terminals.

The under the draft proposal carriers would also be required to set up a complaint handling mechanism for rights and obligations covered by this Regulation.
Member States would be required to designate one or more bodies responsible for enforcing the regulation and for handling complaints from passengers as well as to establish “effective, proportionate and dissuasive penalties” applicable to infringements of this Regulation. One could ask whether there is a need to introduce penalties for infringements of this Regulation.

The Regulation would apply from two years after it has been published in the Official Journal, meaning in 2012.