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The End for Unfair Cancellation Charges?

Author:
Dated: 04/03/2014

The Telegraph has recently reported how a reader from Shrewsbury won his case against holiday giant TUI Travel, parent company of Thomson Holidays. Despite TUI having their case presented by a specialist London barrister, the judge ruled that cancellation charges of around £2,200 were unfair.

Excessive Charges

Bruce Crawcour from Shrewsbury went to the Small Claims Court in Telford after he had to cancel his holiday 6 days beforehand. The cancellation cost him £2,200, the full price paid for the holiday.

Mr. Crawcour started to get suspicious about losing all his money when he looked at Thomson's website. It turned out that Thomson had managed to resell his flight and accommodation within 24 hours.

His legal submissions included the following:

  • The cancellation charges are put into the contract to prevent Thomson from being out of pocket if you have to cancel the holiday last minute
  • Thomson were able to resell the cancelled flights and accommodation, which would have gone a long way to making sure they weren't out of pocket
  • The fact they kept £2,200 of his money AND resold the holiday meant they would be making a tidy profit, rather than just making sure they didn't incur a loss – this makes Thomson's charges unfair

Unfair Terms

The judge decided in favour of Mr. Crawcour, stating that the charges he had to pay were not a genuine "pre-estimate of loss", basically meaning they were charging more than they needed to.

Nick Harris, Head of International Travel Law commented:

"This case just goes to show the audacity of the tour operators. They were essentially able to sell the same holiday twice and make a profit from Mr. Crawcour’s illness. Cancellation charges, when fairly levied are not a problem – but they must be fair to both tour operator and holidaymaker. In this case, they certainly were not.""

TUI are appealing the decision in this case. However, if their appeal fails it will become landmark case, forcing tour operators to change their terms and conditions for cancellation, allowing people to dispute the charges.

It's worth noting that if you take out travel insurance, the policy may provide cover for cancellations where there is a legitimate excuse, such as being ill or a family bereavement. If you can make a claim on your travel insurance, they will pay any cancellation charges for you.

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