Stelios wins right to take easyCar appeal to Europe

Stelios Haji-Ioannou, founder of the easy empire, is to appeal to the top European court over claims that his easyCar car rental business breaks the law by refusing to pay customer refunds.

The entrepreneur will argue that the car rental firm should be treated like other transport service providers, which are exempt from a law giving consumers a seven-day "cooling off" period for purchases made at a distance.

The Office of Fair Trading ruled last year that easyCar should be bound by the "distance-selling regulations" even though it is selling a transport service. The sale of airline and train tickets over the internet or telephone is exempt from the law - introduced to protect customers from hard sell tactics employed by the likes of double-glazing salesmen - as are bookings of hotel rooms, theatre tickets and restaurants.

The High Court yesterday granted easyCar the right to appeal to the European Court of Justice, with Justice Terence Etherton concluding that the company had "a pretty good case for reference".

The ruling is a coup for the loss-making easyCar, which would have had to overhaul its business model - based on selling volume in advance - had the OFT decision been upheld. "We would not have been able to continue offering prices as low as we can if we had to give customers a free opportunity to hand back inventory at a late stage in the sales process," an easyCar spokesman said.

Mr Haji-Ioannou is facing an uphill battle with easyCar, which sufferes froma high cost base. Since March, the chief executive and finance director have resigned, leaving Mr Haji-Ioannou running the business. Plans for easyCar to follow easyJet onto the stock market were shelved earlier this year. A flotation is unlikely before 2005, the spokesman said.