Pax reclaims 100% back from TO after late cancellation

A snowHead

http://www.bbc.co.uk/programmes/b03xzs1l

A Money Box listener had to cancel their holiday with less than two weeks notice when his wife became ill suddenly. By taking snapshots of their web pages, he managed to prove that Thomson Holidays had resold or returned the flights and the hotel room. The county court deemed that the 100% late cancellation fee in Thomson's terms and conditions did not reflect the true cost of the cancellation and were deemed unfair. Consequently he was awarded £2256, the full cost of the holiday, plus court fees.

A snowHead

Or just buy decent annual travel insurance which pays out in these circumstances

Well, the person's real but it's just a made up name, see?

But that would be unjust: you'd simply be splitting profit for Thomson across all the premiums paid. Why let them get away with gouging people like that? Plus you'd be down the premium, which is clearly unnecessary as it's basically a scam.

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why is it 'unfair'? It's in the terms and conditions that you agree to when you buy the holiday. It would only be unfair if the t's and c's explicitly said "100% fee UNLESS we can resell the rooms" (which they may well have done otherwise the courts would not have any right to change the contract - and the BBC's reporting may well be completely wrong, as per.)
Why do people feel they can enter into a contract and then complain when it's enforced? Puzzled

Mind you the courts keep making rediculous rulings about holiday delays and compensation.

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because it is not a negotiated contract - it's a "take it or leave it" clause (and probably in fine print). There are protections for customers against unfair terms. Plus, Thomson should not be making a profit out of the fact that someone got ill and they can now re-sell the holiday.

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boardiac, doesnt the buyer make the offer? and the seller accepts or refuses

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I believe it was this bit of law that he used:

http://www.oft.gov.uk/about-the-oft/legal-powers/legal/unfair-terms/guidance

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alexl, unfair terms are unfair terms. Also, the principals regarding cancellations seem well established and cover a range of industries - not just holidays.

It also seems very fair to me ... holiday company's loss is mitigated by a subsequent booking, therefore they should have a duty to mitigate the loss of the customer who cancelled.

I work in live music (live bands / concerts, etc.) and exactly the same principals/law applies if a band booking is cancelled. (Band under duty to to find alternative engagement - if they can = no cancellation fee is due / if they can't find one, client pays cancellation fee).

Having spent 25 years in the motor industry, I can tell you that a dealer's chances of keeping a customer's deposit who has cancelled an order for a car are pretty much zero, even if it's a special order. Judge just says "you can sell the car to someone else to cover your costs so you haven't lost anything".

Using the same logic, if a TO has sold the same holiday twice, he's making double profit from one holiday so it is unfair on the first consumer who cancelled. Actually, considerably more than double profit because the first sale will now have a 100% margin. Only if the TO can prove that he could not re-sell the flights and accommodation having made a fair attempt, does he have an ethical case for keeping the money.

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Raceplate and legal.

hobbiteater it doesn't matter - the terms and conditions are set by the "seller" (here, Thomson) and are not negotiable. They are in a stronger position than the customer, and "force" the customer to accept their Ts and Cs (or not go on the holiday - i.e. take it or leave it).

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You know it makes sense.

Otherwise you'll just go on seeing the one name:

abj,

A snowHead

As was said in an earlier post cost of cancellation is normally covered by holiday insurance so not sure why this route was not pursued.

Not fair to find a unit cost as holidays vary so much and difficult to compare like with like as close to time of holiday price of holiday likely to be discounted to make sure holiday sold and if flights are scheduled costs for tour operators go up massively.

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Well, the person's real but it's just a made up name, see?

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Tour Operators will be pleased that Small Claims judgements are not precedement setting although they can be persausive. kat.ryb, the customer may have had travel insurance but if the wifes condition was pre-existing then they would not have been able to claim.

The big TOs have been getting away with unfair T&Cs for years. I almost ended up in the Small Claims Court with Thomas Cook after they shifted my flight to Turkey by around 4 hours. This meant that a flight that was already borderline acceptable to me (c.01:00 arrival back in to Manchester), became a 05:00 arrival. The Package Tour regulations talk about "reasonable" changes to flight time but do not define what reasonable is. TC say in their T&Cs that 12 hours is reasonable. I disagrred with their view.

After getting nowhere with TC Customer Service I sent a "Notice before action" to the CEO and Group Legal Director stating my intention to take the case to court.Shortly after I received a letter saying thaey stood by their T&Cs but given my intention to pursue legal action they would refund my deposit. Laughing

Hopefully whatever government department takes over the OFT work in this area will look at the T&Cs and take some enforcement action. Afterall there are many small business in the hospitality sector whose T&Cs state they deposits/payments are non-refundable unless they manage to resell the holiday/accomodation. I wrote a set of T&Cs for my mother-in-law for her holiday cottage that stated that if the accomodation could be resold then the customer would receive a refund less £25 admin charge and any difference between the original price paid and the price the holiday was then sold at.

However, the issue with big TOs is around proving/disproving that they have been able to resell. For example, if a hotel/flight/cruise was sold out and they then remarketed the holiday and sold it, then there is little argument that they were not out of pocket and therefore a full refund less any reasonable admin charge should be made. However, if the holiday was not sold out but the TO sold 3 more after the customer cancelled but they still had inventory left, then then a straightforward refund would be difficult to justify. The only reasonable course of action would be for the TO to have some sort of formula that allowed for lost proft and any costs that they could not recover from their suppliers and deduct these from the amount due back to the customer.

Ultimatley, if TOs were forced to review their T&Cs then all our holidays would increase in price as the business models will include an assumption each year of an amount that will be generated from various cancellation fees. If this income reduces then it will have to be found somewhere else, i.e. in the price of the holiday.

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I think there may be a little more to this than meets the eye. If the wife ha a pre-existing condition then she should have declared it and paid an excess. It is pretty much possible to get insurance for anything but at a price, its not a question of is it possible it is more a question of how much. Most conditiions can be covered with caveats about exacerbations after purchase and before travel most peope apart from the imminentlyt terminally ill can get cover. I am not sure how the traveller could have proved that the T/O had resold the holiday. The website may have been showing full capacity but thi could be becaue someone (the traveller) had already paid for the holiday. One might expected the T?O to have got a small refund on any foop element of the unused holiday. The Ts and Cs are quite clear and we enter into contracts at our peril and we should read our insurance cover very carefully too. I would have expected the T/O to make it a requirement of the booking that the traveller has adequate insurance cover and demonstrates this.

Small Claims Court are something of a lottery, back in my professional days as a lawyer I have won cases where the judge clearly did not really understand the facts but found in my favour anyway through some convoluted thought process - I only ever fought cases for my employer where it was absolutely clear we were in the right, otherwise the whole process is time wasting and costly. As defendant you get no costs even if you win and you end up wasting a day travelling to some far flung part of the British Isles. The point of principle has to be worth the fight! I fully apopreciate that for a "punter" a holiday costing circa £2,500 is worth fighting for and I think he was very lucky and the lawyer for the T/O possibly not as competent as they might have been.

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You would have thought Thomson had decent lawyers as this is quite an important principle at stake

My understanding is that it is a requirement of terms and conditions that customers have adequate insurance so still not sure why a claim wasn't made rather than through the courts, maybe the insurers refused to pay out.

As for Thomson being able to resell the holiday I have my doubts whether it would have been like for like. As it was a late cancellation I imagine the T/O would have had to discount the price to get a sale and they often sell at a loss to get bums on seats or had profit reduced by increased flight costs.

Interesting case and surprised about the outcome.

After all it is free

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Pax reclaims 100% back from TO after late cancellation

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