Passengers have previously been able to take their complaints to AviationADR (Alternative Dispute Resolution), a body approved by the CAA, but Ryanair has informed the CAA that it has ended its agreement with AviationADR.
Ryanair has been slowly getting to grips with improving industrial relations after a major climbdown a year ago that saw the airline pledge to recognise unions for the first time.
While airlines can refuse to pay out for "extraordinary circumstances", such as bad weather or air traffic controller strikes, they must pay compensation for disruption caused by strikes held by its own employees.
However, Ryanair argues the strike action amounts to "extraordinary circumstances" and that therefore, it does not have to pay.
Ryanair cancellations: How to claim compensation?
In the first nine months of 2018, it received 22,159 complaints, but only processed 1,347 of 6,653 Ryanair cases.
However, the CAA says passengers are entitled to compensation under European Union law.
It was also revealed that Ryanair had sacked the appeals body it had appointed to give passengers an independent hearing over complaints about the airline.
Ryanair has now told the CAA that it has terminated its agreement with ADR.
The Civil Aviation Authority (CAA) has launched an enforcement action against Ryanair after the low-priced airline refused to pay compensation to passengers for flight disruptions caused by recent strikes.
In response to the CAA's announcement, a Ryanair spokesperson said: "Courts in Germany, Spain and Italy have already ruled that strikes are an "exceptional circumstance" and EU261 compensation does not apply".
'We expect the UK CAA and courts will follow this precedent'.
Consumer rights organisations have welcomed the CAA's move.
A previous Which? Travel investigation into airline arbitration schemes found that passengers often faced significant delays in trying to claim compensation they were due; with some resorting to court orders and bailiffs to force airlines to pay.