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  • FIRST POST
    • Lpool21
    • By Lpool21 19th Oct 19, 4:24 PM
    • 16Posts
    • 2Thanks
    Lpool21
    Thomas Cook consequential loss.
    • #1
    • 19th Oct 19, 4:24 PM
    Thomas Cook consequential loss. 19th Oct 19 at 4:24 PM
    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
Page 1
    • born again
    • By born again 19th Oct 19, 4:43 PM
    • 659 Posts
    • 345 Thanks
    born again
    • #2
    • 19th Oct 19, 4:43 PM
    • #2
    • 19th Oct 19, 4:43 PM
    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
    • By Lpool21 19th Oct 19, 5:00 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    • #3
    • 19th Oct 19, 5:00 PM
    • #3
    • 19th Oct 19, 5:00 PM
    Thanks for the reply.
    I cannot anywhere find it stated that consequential loss only applies to dependents.
    • YorkshireBoy
    • By YorkshireBoy 19th Oct 19, 5:11 PM
    • 31,023 Posts
    • 19,027 Thanks
    YorkshireBoy
    • #4
    • 19th Oct 19, 5:11 PM
    • #4
    • 19th Oct 19, 5:11 PM
    Thanks for the reply.
    I cannot anywhere find it stated that consequential loss only applies to dependents.
    Originally posted by Lpool21
    Where are you looking? Legislation? FOS guidance/rulings? I'm guessing you haven't yet looked there.
    • Lpool21
    • By Lpool21 19th Oct 19, 5:59 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    • #5
    • 19th Oct 19, 5:59 PM
    • #5
    • 19th Oct 19, 5:59 PM
    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
    • By born again 19th Oct 19, 9:00 PM
    • 659 Posts
    • 345 Thanks
    born again
    • #6
    • 19th Oct 19, 9:00 PM
    • #6
    • 19th Oct 19, 9:00 PM
    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.
    Originally posted by Lpool21
    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
    • By Terry Towelling 19th Oct 19, 9:37 PM
    • 2,099 Posts
    • 1,748 Thanks
    Terry Towelling
    • #7
    • 19th Oct 19, 9:37 PM
    • #7
    • 19th Oct 19, 9:37 PM
    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
    • By Lpool21 20th Oct 19, 10:24 AM
    • 16 Posts
    • 2 Thanks
    Lpool21
    • #8
    • 20th Oct 19, 10:24 AM
    • #8
    • 20th Oct 19, 10:24 AM
    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
    • By Terry Towelling 20th Oct 19, 4:37 PM
    • 2,099 Posts
    • 1,748 Thanks
    Terry Towelling
    • #9
    • 20th Oct 19, 4:37 PM
    • #9
    • 20th Oct 19, 4:37 PM
    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
    • By Overseer 20th Oct 19, 5:36 PM
    • 15 Posts
    • 6 Thanks
    Overseer
    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.
    Last edited by Overseer; 20-10-2019 at 8:09 PM. Reason: More information and clarification.
    • born again
    • By born again 20th Oct 19, 5:51 PM
    • 659 Posts
    • 345 Thanks
    born again
    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.
    Last edited by born again; 20-10-2019 at 5:55 PM.
    • Lpool21
    • By Lpool21 20th Oct 19, 6:05 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    Hi Overseer
    Sounds like you are in exactly the same situation as me.
    Bc are due to call me tomorrow as I have escalated my complaint.I am going to highlight the case from the Ombudsman to them and mention the fact that my loss could in fact be a direct one.
    I have looked online and asked on here for any evidence that consequential loss only applies to dependents but I cannot find it.
    People book/pay for flights for travel with girl/boy friends,friends,parents etc etc all the time and I cannot understand why consequential loss would not apply in these instances.
    If I have no luck with Bc then I will take my case to the Ombudsman.
    • Migster
    • By Migster 20th Oct 19, 6:52 PM
    • 40 Posts
    • 19 Thanks
    Migster
    Whilst you booked all 6 tickets, presumably the 2 friends and probably your parents were going to pay you back for theirs. As such you are really only bearing the cost of 2 tickets, so I can see why Barclays might not be willing to pay the difference on all 6, as it could be argued that this "loss" belongs to the other adults in your party.
    • Lpool21
    • By Lpool21 20th Oct 19, 8:37 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    Hi Migster
    As I have i have already stated I am paying for all the flights and no one is paying me back.
    I don’t think this would make any difference anyway.
    • Terry Towelling
    • By Terry Towelling 20th Oct 19, 9:46 PM
    • 2,099 Posts
    • 1,748 Thanks
    Terry Towelling
    It would be interesting to know on what basis the banks are deciding when to pay out and when not, because they all seem to have differing interpretations. The Consumer Credit Act doesn't mention family, friends or the like, it simply mentions the 'debtor' having the option to hold the creditor liable for losses following a breach of contract.

    So, are the banks exploiting the definition of the word 'debtor', or are they using some part of the Law of Contract to limit the way they will pay out when the beneficiaries of a contract include people other than the person who originally incurred (and still holds) the debt - i.e. they have received a gift?

    The Consumer Credit Act defines a debtor as:-

    “debtor” means [F18(except in relation to green deal plans: see instead section 189B(3))] the individual receiving credit under a consumer credit agreement or the person to whom his rights and duties under the agreement have passed by assignment or operation of law, and in relation to a prospective consumer credit agreement includes the prospective debtor;
    That doesn't appear to preclude the person incurring the debt from still being the debtor despite other people benefitting from performance of the contract.

    On a slightly tangential note, if I own a house jointly (and equally) with several friends and I pay £50 by credit card and £950 in cash for radiators to be installed in each of our bedrooms, but it all goes wrong and I have a claim for breach of contract, is the bank going to say, they will give me back the £50 but the rest of my claim is a consequential loss (which is debatable) and therefore any additional payment will only cover repairs in my bedroom, because the people in the other rooms are not family or dependents of me? That would be absurd.
    • Lpool21
    • By Lpool21 20th Oct 19, 10:33 PM
    • 16 Posts
    • 2 Thanks
    Lpool21
    You make some very good points Terry.
    I am also very interested to discover how the banks are arriving at this conclusion.
    The example you give of the radiators is very good and funny.
    The case example I gave explicitly grants payment of consequential loss to non dependents ie the ladies parents.
    • Overseer
    • By Overseer 20th Oct 19, 11:59 PM
    • 15 Posts
    • 6 Thanks
    Overseer
    ?
    Hi Terry, I'm a bit confused about your radiators example. Unless I'm not understanding properly.
    First of all, if you make a payment of £50 by credit card, you have no protection with the credit card issuer for payments under£100. But if you make a part payment of £100 or over and no matter how you pay the balance - the whole amount is covered by section 75.

    However, using your example, if you only pay £50 by credit card and the balance in cash, and something goes wrong, you can make a claim under the Consumer Rights Act 2015.

    Alternatively, you can make a claim through the Small Claims Court if the claim is under the maximum amount for your country and
    you can recover your costs of doing so if you are successful.

    Both the above examples are not affected by who owns the house, the person who creates the contract is the only claimant.
    • dazza.mk
    • By dazza.mk 21st Oct 19, 5:00 PM
    • 1,858 Posts
    • 1,166 Thanks
    dazza.mk
    Hi Terry, I'm a bit confused about your radiators example. Unless I'm not understanding properly.
    First of all, if you make a payment of £50 by credit card, you have no protection with the credit card issuer for payments under£100.
    Originally posted by Overseer
    Overseer, the value of the purchase needs to be £100- £30k, this doesn't mean that you have to pay the full value on your credit card. If you paid 1p on the credit card and the rest in cash you would be covered by the legislation.
    • Overseer
    • By Overseer 21st Oct 19, 8:54 PM
    • 15 Posts
    • 6 Thanks
    Overseer
    Credit Card Protection under Section 75
    Hi dazza.mk ,
    Thanks for bringing the misunderstanding to my attention about payment amount by credit card. I must admit that I have always had it in my head that £100 was the essential minimum to pay by credit card to ensure cover by section 75. In my defence I can only say that most written examples state £100 to get the message across, although it is more complicated than that.
    • Overseer
    • By Overseer 21st Oct 19, 9:00 PM
    • 15 Posts
    • 6 Thanks
    Overseer
    Credit Card Protection under Section 75
    Hi Terry, My apologese for getting it wrong. I now know what you meant about paying £50 deposit by credit card. See below.



    Credit Card Protection under Section 75t Card Protection under Section 75
    #19


    21st Oct 19, 8:54 PM

    Hi dazza.mk ,
    Thanks for bringing the misunderstanding to my attention about payment amount by credit card. I must admit that I have always had it in my head that £100 was the essential minimum to pay by credit card to ensure cover by section 75. In my defence I can only say that most written examples state £100 to get the message across, although it is more complicated than that.
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