Section 75 query (following successful claim)

LeeAHarris

After causing me nearly £400 of expenses, British Airways refused to refund them. They did not contest that their lack of duty of duty of care caused the extra expenses, but stated that they didn't believe they should pay me back. So I made a Section 75 claim with my credit card company (not a chargeback). The amount claimed was more than I paid British Airways in cash (it was a cash/Avios booking).

The claim was successful and I've received the funds from NewDay.

It doesn't affect me, as I've now been refunded, but I was wondering if anyone knows if NewDay are able (or likely) to claim the money back from B.A. As the card company through which I bought the tickets NewDay are jointly liable, but it wasn't their shoddy service that caused the loss, and I hate to think that British Airways, who are fully at fault, will get away with not paying NewDay back.

born_again

Best guess NO.
Simply not worth it to them.
Any legal fee's would wipe out the return.

eskbanker

According to well-informed insiders on here, it's very rare for a credit card company to seek to recover costs from a merchant in such circumstances, as the fact that they settled doesn't actually oblige the merchant to accept this as some sort of binding judgment, and because of that, the costs involved in pursuing the merchant simply don't justify trying.  It's possible that creditors might try for claims worth tens of thousands but they won't for hundreds.

As you say, it doesn't affect you, so forget about it and move on....

LeeAHarris

I suspected that was the case. It does annoy me that the party at fault gets away with it, but oh well.

born_again

LeeAHarris said:

I suspected that was the case. It does annoy me that the party at fault gets away with it, but oh well.

Even big cases.
Breast implant cases years ago cost one bank alone over £10 million. Never claimed any of it back. Due to the costs of doing so.

MyRealNameToo

LeeAHarris said:

After causing me nearly £400 of expenses, British Airways refused to refund them. They did not contest that their lack of duty of duty of care caused the extra expenses, but stated that they didn't believe they should pay me back. So I made a Section 75 claim with my credit card company (not a chargeback). The amount claimed was more than I paid British Airways in cash (it was a cash/Avios booking).

The claim was successful and I've received the funds from NewDay.

It doesn't affect me, as I've now been refunded, but I was wondering if anyone knows if NewDay are able (or likely) to claim the money back from B.A. As the card company through which I bought the tickets NewDay are jointly liable, but it wasn't their shoddy service that caused the loss, and I hate to think that British Airways, who are fully at fault, will get away with not paying NewDay back.

The law allows them to, there is a specific clause in S75 about it. The experience from those that work in banking on here states it doesnt happen in the companies they've worked for. 

born_again said:

LeeAHarris said:

I suspected that was the case. It does annoy me that the party at fault gets away with it, but oh well.

Even big cases.
Breast implant cases years ago cost one bank alone over £10 million. Never claimed any of it back. Due to the costs of doing so.

This is what I dont understand, and I know this is an old conversation. There are TPAs in the insurance world that work purely on a contingent basis, like a debt collector. You dont pay them a penny but you sign an agreement that says they can keep 1/3 of whatever they recover. So in your tit job example if they'd recovered £9m of it they get to keep £3m and the bank get £6m back. If they recover nothing it cost you nothing. 

I'm sure there's a reason why they haven't gone down this route, but it cannot be cost as clearly simply writing off all debts is more expensive than paying £0 to attempt recovery. 

eskbanker

MyRealNameToo said:

The law allows them to, there is a specific clause in S75 about it. The experience from those that work in banking on here states it doesnt happen in the companies they've worked for. 

You're presumably referring to s75(2):

Subject to any agreement between them, the creditor shall be entitled to be indemnified by the supplier for loss suffered by the creditor in satisfying his liability under subsection (1), including costs reasonably incurred by him in defending proceedings instituted by the debtor.

but that's presumably predicated on the 'tied finance' model prevalent when this Act was introduced, when there'd have been direct contracts between creditors and suppliers, unlike the current scenario with generic unconnected credit card companies.

I'm no lawyer but am unclear on how 'subject' is interpreted here anyway, i.e. does that wording mean 'if there is an agreement between them, the creditor shall be entitled to be indemnified by the supplier' or 'unless there is an agreement between them [stating something else], the creditor shall be entitled to be indemnified by the supplier'?

born_again

I think Insurance is a different ball park, as it is within a core group of companies who are claiming against each other on a regular basis (If I understand what you are saying)
While banks & 3rd party retailers have no such links.

So any claim against a retailer would have to go via courts, with the resulting costs involved. Sadly banks legals do not come cheap..
In terms of the Breast Implants. My understanding, was that if they tried court route it would be massive legal costs, with no guarantee of getting anything back. Due to company simply folding.