Thomas Cook "no liability for consequential losses"

shbrooks

Having logged S75 Claim with Halifax for the consequential loss resulting from rebooking more expensive flights, I've today had my claim rejected stating:



"Thomas Cooks' terms and conditions state that for single component bookings, such as flight-only purchases, there is no liability for consequential losses in relation to any arrangement which you book to coincide with that single component.


Accordingly, under Section 75 of the Consumer Credit Act 197 4, as the credit card provider, our liability is limited to the cost of the flights purchased. The cost of flights which were used to purchase using your credit card, will be dealt with under the MasterCard Chargeback Scheme. We will provide you with an update shortly in relation to this."


This appears to be at odds with most things I've read about S75 claims and was wondering whether anyone else has come up against this?

Ben8282

Thomas Cooks' terms and conditions state that for single component bookings, such as flight-only purchases, there is no liability for consequential losses in relation to any arrangement which you book to coincide with that single component.

This has nothing to do with consequential loss in respect of booking more expensive replacement flights under these circumstances.

born_again

Can we ask were your flights that were cancelled covered by the repatriation that the CCA covered?

Terry_Towelling

Your solution may lie with the legal definition of a consequential loss.

My understanding (and that's all it is) is that the extra cost of a replacement flight is a Direct Loss and not a Consequential Loss. I think the test (but you'll need legal advice on this - and apparently that is often inconsistent too) is that a Consequential Loss is something that might not have been easily predictable at the time the breached contract was originally entered into.

Replacement flights being more expensive than the original purchase price is not hard to predict as a possible outcome of a breach of contract and is therefore a Direct Loss and not something that can be side-stepped with a contract exclusion clause.

I am sure there are many who will disagree with what I have written (especially Halifax) but that is how I see it from what I've read on the subject. I don't imagine you'll get Halifax to change their mind based on my say so but, if it is a lot of money (unlikely), you may like to press them a bit further.

I also think the FOS has ruled in another case like this and ordered the card company to repay the extra cost of more expensive replacement flights - sorry can't remember the FOS case number.

AnotherJoe

Shouldn't travel insurance cover the difference?

As an analogy, and travel may be different but if you buy a TV for say £200 and discover it doesnt work and get a refund, you cant (AFAIK) claim £400 because there is no other TV with the feature of the £200 TV at less than £400.

Ben8282

Terry_Towelling wrote: »

Your solution may lie with the legal definition of a consequential loss.

My understanding (and that's all it is) is that the extra cost of a replacement flight is a Direct Loss and not a Consequential Loss. I think the test (but you'll need legal advice on this - and apparently that is often inconsistent too) is that a Consequential Loss is something that might not have been easily predictable at the time the breached contract was originally entered into.

Replacement flights being more expensive than the original purchase price is not hard to predict as a possible outcome of a breach of contract and is therefore a Direct Loss and not something that can be side-stepped with a contract exclusion clause.

I am sure there are many who will disagree with what I have written (especially Halifax) but that is how I see it from what I've read on the subject. I don't imagine you'll get Halifax to change their mind based on my say so but, if it is a lot of money (unlikely), you may like to press them a bit further.

I also think the FOS has ruled in another case like this and ordered the card company to repay the extra cost of more expensive replacement flights - sorry can't remember the FOS case number.

I don't disagree at all with what you have written.
My disagreement is with the relevance of the booking condition quoted by Halifax to this situation.
for single component bookings, such as flight-only purchases, there is no liability for consequential losses in relation to any arrangement which you book to coincide with that single component
My understanding here is that, if an individual books a flight only arrangement (as opposed tp say a package holiday), Thomas Cook cannot be held responsible for consequential (or direct for that matter) loss if their failure to provide the booked component results in a loss for something booked to coincide with it. For example, if a client books a flight only arrangement and the flight is delayed, they cannot be held responsible for losses for something that has been paid for (such as a car rental or hotel room) to coincide with the flight booking. This is a pretty standard airline condition as without it passengers could hold airlines responsible for all manner of things every time a flight was delayed.
As booking replacement flights following the collapse of Thomas Cook cannot be regarded as an arrangement booked to coincide with the single component it has been incorrectly quoted by Halifax as a reason to refuse the claim.
I am not offering an opinion on the validity of the claim but am saying that the reason given for refusing it is invalid.

shbrooks

Thanks for your replies. The amount is for £1300 so definitely worth pursuing further.

I'll look into this Consequential/Direct Loss definition in more detail.

I tried to claim it back through my travel insurance but Holidaysafe were pretty useless and said my 'Premier' cover didn't cover Consequential Loss!

AnotherJoe

shbrooks wrote: »

Thanks for your replies. The amount is for £1300 so definitely worth pursuing further.

I'll look into this Consequential/Direct Loss definition in more detail.

I tried to claim it back through my travel insurance but Holidaysafe were pretty useless and said my 'Premier' cover didn't cover Consequential Loss!

I woudlnt say that was consequential loss. Consequential loss would be, you lost a car rental or a hotel room or even a business deal because of the cancellation. AFAIK though, travel insurance should pay up for a replacement flight. Though sometimes they will say you should have given them the opportunity to get that flight for you.
I would complain to the ombudsman.

born_again

How many people is this £1300 extra for your flights.

While I agree with Ben the quote of the T/C is not relevant to your claim. More details is needed. As it could also be considered that you had not done enough to minimise the loss.

So details such as:
No of people? Relationship of these to you (as we have seen this as a issue)
1 way or both?
If return, were cancelled covered by the repatriation that the CCA covered?

Terry_Towelling

Ben8282 wrote: »

My disagreement is with the relevance of the booking condition quoted by Halifax to this situation.

for single component bookings, such as flight-only purchases, there is no liability for consequential losses in relation to any arrangement which you book to coincide with that single component

I am not offering an opinion on the validity of the claim but am saying that the reason given for refusing it is invalid.

I'd say you are right about the irrelevance of the rebuttal.

OP is clearly not seeking to recover losses from other services booked to coincide with the single component - which may indeed be Consequential Losses; they are seeking to recover losses that are a direct result of having to replace that single component.

The losses sought are not Consequential (as seemingly defined in Halifax' rebuttal) and therefore not covered by the contract exclusion clause.

phillw

Ben8282 wrote: »

This has nothing to do with consequential loss in respect of booking more expensive replacement flights under these circumstances.

I think it does. If you book flight A & hotel B separately and flight A is no longer available then they are saying they have no responsibility for compensating you for the cost of hotel B or for more expensive flights so that you can use the booking.

The banks seem to be saying that the T&C overrides any S75 legislation & that you can't have a better legal position because the company collapsed than if they were still trading.

If the flight was for work, then would anyone expect them to compensate for lost income?