Thomas Cook consequential loss.

Lpool21 · 19 October 2019 at 4:24PM

Hi guys
I booked some flights with Thomas Cook for a party of 6 including me,my daughter,my parents and 2 friends on my Barclaycard for this Dec.The approx cost was £3500 and the flights were economy on way out and premium on the return.
When I heard that Thomas Cook had gone bust I booked the cheapest replacement flights I could find at a total cost of £5500.These flights are economy both ways so less than like for like.
I applied to Barclaycard under section 75 for the initial £3500 and for £2000 consequential loss for the replacement flights.
I received a reply today stating that they would refund the full £3500,subject to investigation,but would only refund consequential loss for me and my daughters flight as she is my dependent.
I don’t think this is correct as I solely paid the full amount for both the Thomas Cook flights and the replacement flights.I am the one that has fully suffered the consequential loss and no one else.
Any help/advice would be very much appreciated

born_again · 19 October 2019 at 4:43PM

So they have actioned a chargeback for the £3.5 flights.
Consequential loss will not cover ALL parties just because you booked and paid for the flights. It in effect only covers you and your dependants.
You will have to ask your friends to pay the difference in their flights.

Lpool21 · 19 October 2019 at 5:00PM

Thanks for the reply.
I cannot anywhere find it stated that consequential loss only applies to dependents.

YorkshireBoy · 19 October 2019 at 5:11PM

Lpool21 wrote: »

Thanks for the reply.
I cannot anywhere find it stated that consequential loss only applies to dependents.

Where are you looking? Legislation? FOS guidance/rulings? I'm guessing you haven't yet looked there.

Lpool21 · 19 October 2019 at 5:59PM

could you please point me in the right direction as to where this is stated.
case 5 in the Ombudsman news issue 86 seems to suggest to me that consequential loss applies to members of the booking other than the person booking and their dependents.

born_again · 19 October 2019 at 9:00PM

Lpool21 wrote: »

case 5 in the Ombudsman news issue 86 seems to suggest to me that consequential loss applies to members of the booking other than the person booking and their dependents.

Mrs K was obliged to buy tickets
from a different airline to get her family
home from their holiday.

Thar little quote from the above mentioned FOS page is very clear...

You could complain and let it go to FOS, as it will not cost you anything. But I would not hold your breath and advise your friends that they might have to pay you back.
Better to do that now, rather than in a few months time.

Terry_Towelling · 19 October 2019 at 9:37PM

What follows is just my opinion but I don't agree that an issuer can limit payment of consequential losses to only the debtor and their dependents.

Case 5 in Issue 86 of the FOS news doesn't actually say anything about this sort of limitation - in fact it says something quite to the contrary.

Mrs K (of that case) was the debtor and she had to pay a higher price for replacement tickets for the whole party to get home. The card company was told to pay the full cost of these replacement tickets. Yes, the travelling party was all family, but two of them were Mrs K's parents and so could not legally be considered to be Mrs K's dependents.

Having also read a bit more about consequential losses (after another thread), it now seems (to me) that the cost of replacing something not fulfilled following a breach of contract, is not a consequential loss; it is a direct loss, so, presumably any limitations that card issuers might like to impose on consequential losses would not apply anyway.

Lpool21 · 20 October 2019 at 10:24AM

Thanks
I interpret the case the same as Terry.
The case I highlighted is very similar to mine as the lady received consequential loss for family not just dependents.Like her I am travelling with my parents.
I will look more into how my loss could be considered direct and not consequential.
Asking the other members of our group to pay is not an option as I offered to take them away over Christmas so it is my responsibility to do that.
I guess i am under contractual obligation to carry out my promise lol

Terry_Towelling · 20 October 2019 at 4:37PM

From what I've been reading, the distinction between direct and consequential (or indirect) losses is not particularly well understood. For a start, all losses that arise are a 'consequence' of the breach of contract. Those that are caused directly by the breach should include the cost of replacing whatever service was not provided - replacing lost flights is just that. You are, of course, required to mitigate your losses when making a claim for breach of contract, so you would need to buy replacements on a like-for-like basis for as low a cost as you can. Indeed, FOS noted in Mrs K's case that she had purchased replacement flights at a 'reasonable' price.

Other things worth noting are that FOS is not necessarily expressing the same views as a court of law would and neither is your card company - they are merely providing their interpretations. On that basis, that's all I am doing too.

Thomson Reuters - Practical Law provides the following definitions of the types of loss:-

Consequential Loss - also known as indirect loss - arises from a special circumstance of the case, not in the usual course of things. It is recoverable only if the paying party knew or should have known of that circumstance when it made the contract, under the second limb of the rule in Hadley v Baxendale [1854] EWHC Exch J70. By definition, therefore, consequential losses are exceptional and often not recoverable.

Direct loss is the natural result of the breach in the usual course of things. Most foreseeable kinds of loss are direct, including financial losses such as loss of profits and loss of business or goodwill.

Looking at these definitions, the fact one may have to pay more to replace something fits very nicely into the definition of a Direct Loss.

Overseer · 20 October 2019 at 5:36PM

Hi Lpool21, I have a similar situation as yourself. Firstly I have to say that I am happy and impressed with Barclaycard's text to me to make a section 75 claim immediately after Thomas Cook went bust, and their quick response to refunding me with my full TC transaction amount after receiving my ' Travel Dispute 'claim form.

I had paid Thomas Cook by BarclayCard credit card for flights for myself, my wife and my sister-in-law and was fully refunded including baggage etc.
As for my consequential loss claim, this where it is a bit complicated. Having had paid a £400 deposit for renting a villa for the 3 of us , I had to pay the rental balance of £880 by 1st October or I would lose the deposit. Of course I could have cancelled the holiday and claimed BC for the £400 lost deposit as consequential loss ( but I had no certainty of the recovery of it ) , so instead I rebooked inflated flight prices with Jet2 ( only flights, no baggage etc ) as the extra cost above the TC invoice was similar to the deposit of £400.

Barclaycard response was a refund of the consequential loss for me and my wife but not of my sister-in-law, with the same reason given as you received from BC. So she has a £65 net loss.

I am not sure whether the complete loss can be claimed and I'm not sure if they would have wholly refunded me for all 3 parties if I had cancelled the holiday and lost the £400 villa deposit. That way there would be no £65 loss but there would also be no holiday !
I will have to check section 75 further to clarify some points. If I find anything worthwhile I'll post it.

born_again · 20 October 2019 at 5:51PM

I think the only way to get any sort of answer to this is to complain. See if complaints team will refund or if not let it goes to FOS and see what they say.
At least that way there is a hard & fast ruling that S75 teams can use to base their response on.

In many cases, unless there has been a previous ruling by FOS. They will err on the side of NO.
I know our S75 team will refund fir Family/dependants. But not for anyone not in the account holder immediate family.
Some card provider would not action S75 if a additional card holder had made the transaction. On the basis that they were not the account holder. As such S75 only applied to the account holder.

Thomas Cook consequential loss.

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