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Scenic to pay $23m in damages following decade-long class action
After almost 10 years of litigation, cruise operator Scenic will pay $23 million in damages to 1,200 group members after they were promised a European river cruise but were made to travel on “second-rate” bus tours instead.
Lauren Croft
Scenic Group has been ordered to pay $26 million in compensation and costs as a class action relating to the cancellation of numerous cruises in 2013 after heavy rainfall in Europe finally came to a close after almost a decade.
“The settlement is the culmination of 10 years of protracted litigation in which Scenic resisted every step of the way. The group members must be congratulated for their resilience and willingness to stay the course,” he said.
“Whenever group members were called upon for assistance and information, they responded in large numbers. They knew what they received from Scenic did not resemble what they paid for, and they remained motivated to pursue this matter until Scenic paid them the compensation they deserved.”
The class action, brought in 2014, followed heavy rainfall and extreme river flooding in Germany in 2013, which meant that Scenic was unable to run river cruises on the Rhine and Danube in April and May that year.
The tours had been described as a “once-in-a-lifetime cruise along the grand waterways of Europe” where passengers have a “truly unforgettable journey” and travel in luxury.
However, due to the adverse weather conditions, passengers were instead forced to stay in hotels and travel on long bus routes. Despite the weather conditions being clear, Scenic did not cancel the cruises or offer refunds or alternate packages.
In August 2017, Justice Peter Garling found that passengers were entitled to damages from Scenic for breaches of Australian Consumer Law and failure to comply with consumer guarantees. However, in 2018, the Court of Appeal delivered a judgment that precluded the passengers from claiming damages specifically for distress and disappointment.
The class action, funded by Omni Bridgeway, was eventually referred to the High Court in 2020, which held that passengers were entitled to damages for distress.
The proceedings then returned to the Supreme Court of NSW for the determination of the damages to be received by group members. A two-week hearing took place in March 2021 to determine the claims of 32 “sample” group members as a means of establishing the principles for the determination of all remaining claims.
The court determined that the 32 claimants should be awarded damages for the reduction in the value of their cruises and the disappointment and distress which they experienced. Scenic’s appeal of this decision was recently dismissed by the NSW Court of Appeal.
Sample group members who gave evidence in court during the class action will be entitled to a payment of approximately $771,000, with remaining group members entitled to claim between $3,500 and $12,500 and, depending on which cruise they took, between $8,800 and $12,500 each for “distress and disappointment”, according to the settlement notice.
Scenic was also ordered to pay $3 million in legal costs.
In a statement provided to Lawyers Weekly, Scenic Group noted that while it was disappointed with the final judgment, the outcome was in line with their “financial provisioning, given the previous court decisions and subsequent appeals”.
“We are pleased that this matter has finally been settled and can confirm that Scenic Group is committed to delivering scheduled itineraries, without compromising on the guest’s safety or the services we provide,” a spokesperson said.
“Whilst the prospect of schedule interruptions is unpredictable, we take nothing for granted and continue to invest in our River Cruise Cover and itineraries for the benefit of our guests.”
The settlement is subject to approval and listed for a further hearing in July.
Somerville Legal is also currently litigating a further class action against Scenic as a result of similarly disrupted cruises that took place in 2018.
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
