A reader LOSES his arbitration case against British Airways for not refunding seat selection fees

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Are British Airways seat reservation fees refundable?

Last November, I published a long article criticising one of the most egregious money-making schemes pursued by British Airways – the refusal to refund seat reservation fees if you cancel your booking.

It was driven by the case of reader Andrew.  He had cancelled two Avios seats in Club World to the US.  All of his Avios and other charges had been refunded, less the £35 per head administration fee, as usual.

However, British Airways refused to refund £500 of seat reservation fees.

Are British Airways seat reservation fees refundable?

Can you really spend £500 on seat reservation fees for a couple?

Unfortunately, yes.

Rhys wrote this article in May 2019 about ‘fee creep’ at British Airways.

We used an example there of Heathrow to New York, where seat selection would cost up to £364 return for a couple.  However, for the US West Coast, you will pay £139 per person each-way for the upper deck of a Boeing 747 – a total of £556 return for a couple.  Bargain.

British Airways seat reservation fees

There were two issues at stake: is it made clear that your reservation is non-refundable? and is this ‘fair’?

Is it made clear that seat reservations are non-refundable?

Let’s look at the first issue.  When you go into ba.com to select seats, this is what you see (click to enlarge):

Are British Airways seat reservation fees refundable?

The terms and conditions are not shown, but require you to click a hyperlink.  Not ideal, but probably acceptable.  But when you click the hyperlink, you get this:

British Airways seat reservation rules refund

This is meant to be a summary of the key terms and conditions.  At no point does it say that seat reservations are non refundable.

If you click on ‘More terms and conditions’ it DOES bring up a lengthy pop up box of rules.  If you scroll almost to the bottom, it DOES say that seat fees are non-refundable if you choose to cancel your flight.  I would argue, however, that this is too many clicks from the booking screen to be watertight.

Regardless of the T&Cs, is this ‘fair’?

You might say ‘it doesn’t matter if it’s fair’.

Except, under UK contract law, it does.

There are lots of pieces of regulation which could come into play here such as the Consumer Rights Act 2015, the Unfair Contract Terms Act 1977, the Unfair Terms in Consumer Contracts Regulations 1999, the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982.

Here is a very concise summary from the Government’s own website:

Businesses can keep your deposit or advance payments, or ask you to pay a cancellation charge, only in certain circumstances:

If you cancel the contract, the business is generally only entitled to keep or receive an amount sufficient to cover their actual losses that directly result from your cancellation (eg costs already incurred or loss of profit).

Businesses must take reasonable steps to reduce their losses (eg by re-selling the goods or services).

Non-refundable deposits should only be a small percentage of the total price.

Cancellation charges must be a genuine estimate of the business’ direct loss.

A good base line is that a consumer contract can only be imposed if it is ‘fair’.

It is very, very difficult to see how retaining a payment of £500+ for seat selection is ‘fair’ when the airline was happy to cancel the underlying seats without penalty.

Seat selection fees also appear ‘unfair’ in terms of the ‘power’ given to each party.  British Airways, according to the small print, is free to throw you out of your allocated seats for any reason it wants:

“A paid seat request cannot be guaranteed, as it may need to be changed for operational, safety or security reasons, even after boarding the aircraft.”

“Paid seating will not be refunded if you cancel your flight, are involuntarily upgraded or are not suitable to sit in the seat type you have selected.”

“In relation to BA marketed and operated flights, if, in accordance with your fare rules, you choose to move to a different flight, you will be entitled to choose an equivalent seat on your new flight. However if an equivalent seat is not available the difference paid will be forfeited and will not be refunded. In relation to other carrier marketed flights, if you choose to move to a different flight, you will not be entitled to choose an equivalent seat on the new flight and you will not be entitled to a refund.”

Note that, if BA upgrades you, you don’t get a seat refund.  It is difficult to imagine a court agreeing with that, especially if you paid for seats purely in order to be together but – due to the upgrade – you were separated.

Oddly, if the whole transaction was non-refundable (the seat and the seat reservation), you may be able to make a case for retaining the seat fee.  You bought a product in advance at a cheaper price by buying it in advance rather than at short notice, with the trade off that the transaction was non-refundable.  This is seen as ‘fair’ under UK law.  The seat fee could be seen as part of the overall cost.

In the case of an Avios redemption – or a fully flexible cash ticket – it is a different story.  The airline is willing to refund the flight.  It is therefore virtually impossible, in my mind, to put together a ‘reasonable’ justification for keeping the seat selection fees.

A reader decided to test this at arbitration

I said last November that I would be keen to hear from any HFP readers who wanted to take British Airways to CEDR arbitration (here is our guide on how to do it) or, failing that, to MCOL / Small Claims (here is our guide on how to do that) over seat selection fees.

A reader (not Andrew who we quoted above) took me up on the offer.

He lost.

Here is the arbitration judgement in full:

Agreed facts
• The passenger and one other were booked on the Flights.
• The passenger cancelled his reservation for the Flights.

Issues in dispute
• The passenger claims £408.00, as a refund of the seat selection fee he paid to the airline.
• The airline denies liability for the refund sought.

Decision making principles
• In order to succeed in a claim against the airline, the passenger must prove on a balance of probabilities that they are owed compensation under Regulation (EC) No 261/2004 of the European Parliament and of the Council of 11 February 2004 (“Regulation 261”).
• I have carefully considered all of the issues raised and the documents provided. Both the passenger and the airline should be reassured that if I have not referred to a particular issue or document, this does not mean that I have not considered it in reaching my decision.

Reasons for decision

1. The passenger claims £408.00 as a “Refund of Seat Selection Fee from fully refundable ticket”. The airline, on the other hand, states the passenger is not entitled to a refund of the seating charges he paid, as, in accordance with its terms and conditions, “pre-paid seating will not be refunded if the Passenger chooses to cancel their booking”.

2. I am mindful that pursuant to the airline’s Terms and Conditions for paid seating, passengers “will not receive a refund for paid seating if [they] cancel [their] flight”.

3. The passenger cites the Competition and Markets Authority’s Guidance on Cancelling Goods or Services. I am not convinced the charge the passenger paid for seating can be considered a “deposit” or an “advance payment” for any goods or services. I also do not deem that the “seat selection fee” paid can be considered a “cancellation charge”.

4. Rule 2.1. of the Aviation Adjudication Scheme Rules stipulates the types of disputes that I, as an adjudicator under the Aviation Adjudication Scheme can deal with. The passenger’s dispute does not relate to “[d]enied boarding, delay, or cancellation”, “[d]estruction, damage, loss, or delayed transportation of baggage”, “[d]estruction, damage, or loss of items worn or carried by the customer” or “[p]roblems faced by disabled passengers or passengers with reduced mobility”. In that sense, the passenger’s claim can only fall within Rule 2.1.5, namely “disputes arising where the customer alleges that the subscribing company has not acted fairly; that is, where the subscribing company has failed to provide the service as agreed under the contract for aviation services”. In that sense, I am only able to determine if the airline broke a term of its contract with the passenger or if it failed in its duty of care owed to the passenger when providing the contracted services. Yet, it falls outside of my remit as an adjudicator to establish whether the contract between the parties is balanced, fair or reasonable or to rule whether it is legal in accordance with the applicable regulations in the United Kingdom.

5. I find that the passenger was clearly referred to the airline’s full terms and conditions relating to paid seating and that a link to those terms and conditions was displayed at the time of booking such paid seating. I consider that those terms and conditions include a clear and unequivocal statement that passengers “will not receive a refund for paid seating if [they] cancel [their] flight”.

6. Subsequently, given that the passenger cancelled his tickets for the Flights, I consider the airline correctly denied liability for a refund of the paid seating charge the passenger incurred. In that sense and in view of the clear provision in the airline’s terms and conditions stating passengers “will not receive a refund for paid seating if [they] cancel [their] flight”, I find there is no basis on which I would be able to direct the airline to refund the passenger £408.00, representing the seat selection fee the passenger paid to the airline.

7. I anticipate the passenger may be disappointed by my decision but hopefully he understands my reasoning. Whilst I recognise and sympathise with the situation the passenger found himself in, the airline’s terms and conditions relating to paid seating clearly and unambiguously state passengers “will not receive a refund for paid seating if [they] cancel [their] flight”. Therefore, I was only able to conclude the airline acted in accordance with those terms and conditions by not offering a refund to the passenger for the said seat selection fees which the passenger paid. Whist I recognise the passenger deems this provision unfair, I am unable to make a determination as to whether the same is unfair, binding, acceptable, balanced or not to the detriment of the consumer. Should the passenger be unsatisfied with my ruling, he is free to reject the decision and and to negotiate a settlement with the airline or to pursue the matter elsewhere should he wish to do so, including to dispute the validity of the abovementioned provision (or the airline’s terms and conditions as a whole) before a competent body or court.

Decision

• The passenger’s claim does not succeed.

What next?

It is not hugely surprising that the claim failed, unfortunately.

It is not disputed by me, the passenger or the arbitrator that the BA terms and conditions allow it to pocket your seat selection fees if you cancel your flight.  This appears to be the only point that the CEDR arbitrator has considered.

By his own admission, the arbitrator is not allowed to consider whether these terms are ‘fair’ under UK contract law.  Only a court can decide this.

However, I would clearly take issue with the arbitrator’s view that BA makes its cancellation policy ‘clear’ and ‘unambigous’.  It is clear from the screenshots I show above that this is absolutely NOT the case.  I doubt the abitrator actually did anything as obvious as try to make a BA seat booking himself.

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Comments

  1. Where’s @LadyLondon ?
    I’m sure she would love this

  2. Jerrry Butler says:

    Down the boozer with Old Bob and Geoff!

  3. JohnG says:

    I’m not sure the logic you are using to discern a difference between the base ticket being refundable or not affecting whether an upgrade is refundable or not is overly compelling. The seat upgrade has exactly the same impact on BA irregardless of whether the underlying ticket is refundable or not, and the terms are the same.

    If a plaintiff were to make this case in court then I’d suggest they make it secondary to the argument that the upgrade fee terms were not disclosed clearly enough (irregardless of underlying ticket), and that even then they focus on the narrow point that as the underlying ticket was refundable the onus on BA to make clear if additions are refundable or not is even higher.

    Clearly one issue with this argument is that anyone aware that seat upgrades are non-refundable would almost certainly have end up having to lie in court.

    An alternative argument based on fairness is tricky. I’d be very surprised if the case law wouldn’t give an extremely strong guide on the viability of this claim. My personal estimation is that it wouldn’t win in court; not least because differentiating non-refundable seat upgrades from non-refundable plane tickets, concert tickets, other purchases that are seen as fair would be difficult.

    • Polly says:

      A refundable ticket, albeit an avios one, would certainly indicate the assumption that any associated fees would be refundable too. The idea that BA thinks it’s ok to keep seat reservations fees, even if you are not flying is unbelievable. Indeed some posters have received their seat cost refunded.
      Think will definitely succeed in MCOL. Looking forward to seeing the outcome.

    • cinereus says:

      Not sure if there’s much extant case law specifically on these issues of fairness as it’s fairly new and untested.

  4. John might have also missed the other obligation. The fact that a fair number – perhaps more than half of the people – believe that a refundable ticket is a refundable ticket less the clearly mentioned fee – then BA were obligated to explain this “oddity” clearly so that people would be informed unless blind or stupid. Hiding onerous terms is against the law. That is one of several arguments.

  5. …….. there’s also the issue that it seems that it isn’t a binding condition because BA’s own staff assume it’s refundable and make refunds. So if customer believes it’s refundable, BA staff think it’s refundable and many post publicly tgat they have been refunded, then this is clearly wobbly dobbly.

    • Jerrry Butler says:

      Refunded Wobbly dobbly i don’t understand the logic behind that

  6. BA cancelled my flight to Cancun in April because of Covid 19. They have duly refunded me the flight + seat selection. However, they deducted £150 for an outbound upgrade offer I had later accepted and paid for, citing this was a ‘change’ to my flight and they never refund any changes to flights. Is that correct, seeing as BA chose to cancel my flight and I could not ultimately use it, It seems very unfair?

    I have searched online for answers with no success so would love to hear similar experiences with this issue? Thank you.

  7. Se if I can help.

    If BA has decided that it would not refund seat reservation fees to passengers who cancel refundable bookings then presumably it would make it impossible for their staff to click some buttons and do so.

  8. Emran says:

    Having been an adjudicator, I understand the decision based on rules around jurisdiction. However, I don’t agree that BA makes its rule “clear” and certainly not made so “unambiguously”.

    BA’s decision can only be tested in court where I doubt it would even want to put up a defence.

  9. I have US friends who were booked on BA to London the weekend the pandemic kicked off, and their State Department advice was not to travel, so they reluctantly cancelled their flights, (we locked down the falling week whilst they would have been in the UK).

    They too paid for seat reservations both ways and BA refuse to reimburse them (the return flight would have been cancelled by BA – as by that time we were locked down and they would have been stranded here).

    I wondered if anyone can advise if a US citizen can take a case out in our County Court/Small Claims Court against BA please?

  10. Andrew says:

    It seems a bit odd that Rule 2.1. of the Aviation Adjudication Scheme Rules says that the adjudicator can deal with “disputes arising where the customer alleges that the subscribing company has not acted fairly” but the adjudicator seems to think they have no jurisdiction to consider if the company acted fairly.

    Or to put it another way, the adjudicator seems to think anything in the terms and conditions – however onerous, or hidden away – is necessarily “fair”. Bizarre.

    Was the passenger really seeking Reg 261 compensation? Should they have been arguing that the airline was acting unfairly, contrary to consumer law?

  11. Michael says:

    It appears that the terms of the arbitration agreed by BA and CEDR are at variance to the requirement of the Civil Aviation Authority which require to arbitrator to consider: –

    “Any more general disputes arising where the consumer alleges that the business is not trading fairly. Here we are referring to situations where the consumer has been misled, for example into paying more for the flight or into buying something that they didn’t actually want, where the consumer has been harmed by the use by the business of an unfair contract term, or where the consumer has been otherwise harmed by the breach by the business of general consumer protection law.”
    Please will HFP pursue?

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