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A HfP reader sues BA when it refuses downgrade compensation on a 241 voucher

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A question that often gets asked when the conversation moves to EC261 compensation (2019 No.278 now that we have left the EU) is what value the British Airways American Express companion voucher has in the case of downgraded or cancelled flights.

British Airways continues to insist that the companion voucher has no value, since it is simply a ‘plus one’ for an Avios booking.

Common sense suggests otherwise, and indeed we know that British Airways has lost numerous CEDR and MCOL arbitration cases with HfP readers over the years on this point.

British Airways BA Amex cards float 2

For clarity, we do not know of ANY case where British Airways has actually won in court or arbitration on this issue. You may wonder why it continues to force readers to take this route to get the compensation they are legally due.

We were recently contacted by a reader who had just successfully won a dispute in Court. As the case had progressed to Court with BA unwilling to settle, there was no confidentiality undertaking signed. For once, we are free to discuss it.

Over to our reader:

“I was due to travel on a long-haul flight with my wife and infant. We had booked a reward flight in Club World using a Companion Voucher. We were downgraded without notice at the gate and had a second set of boarding passes issued with seats in World Traveller Plus. This was after a two hour delay waiting at the gate.

The BA staff tried to offer cash compensation of £200 each when we expressed our frustration. We rejected this and refused to travel on another day as we had another flight to catch at the destination. We were informed that BA would contact us within seven days of the flight to discuss the refund due, but no contact was made.

Over the next six months, 16 emails were exchanged between myself and British Airways’ customer relations team as I tried to seek the correct compensation.

I had calculated the correct compensation due under EC261 for downgrades. Based on my understanding that I was entitled to 75% of the price of the ticket and bearing in mind it was an Avios purchase, I was seeking:

Outbound leg was 90,000 avios (peak pricing)
75% of 90,000  = 67,500 Avios per adult
75% of 9,000  = 6,750 Avios per infant (infants pay 10%)
Total due:  141,750 Avios downgrade compensation

The total refund in Avios would be 141,750 for the three of us.

Unfortunately, British Airways rejected my calculation. As I wasn’t making progress, I decided I had no option but to take British Airways to court.

I wrote a detailed letter to BA before starting my action and subsequently issued a claim in the Small Claims Court using MCOL, the Money Claims Online Service. This was relatively straightforward and the online portal is quite user-friendly. You can do this yourself and do not need to appoint a lawyer.

BA 787

At this point, British Airways offered me compensation I was legally due of 67,500 Avios for my ticket and 6,750 for our child.

However, it disputed my wife’s refund since it was a Companion Voucher, i.e. the companion ticket holder ‘did not pay a fare,’ and therefore not entitled to compensation. They were essentially arguing that the voucher had no value.

We argued that under Article 10.2(c) of EU Regulation 261, we were both entitled to compensation of 75% of the price of our tickets for the downgrade.

Article 10 of the Regulation relates to upgrading and downgrading. It states:

2. If an operating air carrier places a passenger in a class lower than that for which the ticket was purchased, it shall within seven days, by the means provided for in Article 7(3), reimburse:

(a) 30% of the price of the ticket for all flights of 1500 kilometres or less, or

(b) 50% of the price of the ticket for all intra-Community flights of more than 1500 kilometres, except flights between the European territory of the Member States and the French overseas departments, and for all other flights between 1500 and 3500 kilometres, or

(c) 75% of the price of the ticket for all flights not falling under (a) or (b), including flights between the European territory of the Member States and the French overseas departments

We also referred specifically to Article 3.3 of the Regulation which sets out very clearly that:

‘This Regulation shall not apply to passengers travelling free of charge or at a reduced fare not available directly or indirectly to the public. However, it shall apply to passengers having tickets issued under a frequent flyer programme or other commercial programme by an air carrier or tour operator.’

Clearly, EU261 applied to companion vouchers. Given that you can only get a companion voucher after a £10,000 credit card spend and the associated £195 fee for the card itself, we were adamant that British Airways was wrong in giving it a nil value.

British Airways BA 777X 777 9X

It is worth noting that within BA’s court documents they referred to the “Steef Mennens v Emirates Direktion für Deutschland” case.

This was an attempt to demonstrate that a passenger who did not “pay a fare” was not entitled to any compensation. We asserted the facts of this case were completely different and could not be compared to our case, on the basis a Companion Voucher (with intrinsic value) was used to purchase a ticket. This view was accepted by the court.

We were successful at trial and were somewhat surprised that BA had not offered to settle prior to the hearing.

In addition to compensation for my wife’s downgraded ticket, we were also granted costs to cover the claim fee and hearing fee. The cash value of Avios was based on the cost of buying Avios directly from British Airways – so 1.6p per Avios.

We were therefore awarded £1,080 and 74,250 Avios, as well as our costs.

The judge agreed that it was acceptable for compensation on my ticket and my child’s ticket (but not my wife’s companion ticket) to be in Avios since this was the means of payment.

The £1,080 comes from multiplying 67,500 Avios x BA’s selling price of 1.6p per Avios.

[HfP edit: it is very rare for CEDR or MCOL to make a non-monetary award against British Airways. In every previous case we have seen, all of the compensation was paid in cash based on 1.6p per Avios]

It was crucial that we laid out the calculation to value the Companion Voucher, and therefore the compensation in monetary terms since we were using Money Claim Online.

My advice would be that you can most certainly pursue compensation for a downgrade on a companion voucher but it is imperative to set out your claim very clearly.

We put a lot of time and effort into researching the regulations, reading various terms and conditions and drafting the court documents. In the end it took 14 months from the date of the flight until the court hearing came around, but our perseverance and hard work paid off.”

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Comments (193)

This article is closed to new comments. Feel free to ask your question in the HfP forums.

  • KBuffett says:

    Did you get also get 8% interest or payment for your time (in lieu of solicitors costs)?

    Also, there’s no mention about taxes and fees, had they been correctly and fully refunded prior the court case?

    Finally, are results of these types of cases available online to view?

    • Anna says:

      I was going to ask the same question about the taxes/fees.
      The CAA seems completely incapable of holding BA to account for the repeated, long-term failure to comply with passenger rights legislation.

      • Lady London says:

        not just repeated failure but systematically engendered failure which is worse

    • Rob says:

      Taxes and fees are not part of the 75% refunded. There IS precedent for this. You may be able to argue for any additional charges added to your class of travel vs what you flew but I think First and Club are the same.

      • Jonathan says:

        Surely YQ (carrier surcharges) are? I agree that genuine taxes & fees (ie. money that the airline hands over to airports or governments etc) are excluded but the YQ is essentially part of the fare as the airline pockets it.

        • TGLoyalty says:

          Agree I’m not sure why YQ would be excluded.

          Proper airport, passenger fees and taxes should of course be excluded

      • Charlieface says:

        AIUI, the extra taxes are refunded in full separately from the 75% calcualation.

        But YQ should be included in the 75% as it’s not a tax

      • David S says:

        But the downgrade was from Club World to World Traveller Plus, not First to Club

    • cinereus says:

      Yes, as with any case you always get interest though not usually at 8% these days!

      You also never get payment for preparation time but you do for the hearing time.

      The judgment for a case this minor will not be published.

  • Tim says:

    Shocking treatment by BA.

  • Annih says:

    Going through something similar now. Cancellation and then reroute a s then downgrade.

    BA only want to offer the small number of avios difference between the fare buckets. They aren’t offering anything for the companion voucher and most certainly aren’t applying the 75%.

    Curiously though, how does the MCOL award avios? Surely the claim should all be in cash terms? Wouldn’t the true base fare be an applicable ask too as per mennens?

    • TGLoyalty says:

      You need to have actually flown the downgraded flights before you’ll get compensation.

      Also important to remember anything they give you on the day of downgrade doesn’t affect your claim to compo under EC261! If I was the OP in article I would have taken the £200!

      • Jonathan says:

        For a downgrade they can deduct anything they’ve already given you. Certainly in the CEDR cases reported on Flyertalk any cash or cash like awards were counted towards settlement figures.

        • TGLoyalty says:

          Even if that is the case, EC261, says it isn’t. There was no detriment to the award. You would have had £600 in your pocket.

          • Lady London says:

            not sure, TG.
            For a flight cancelled on the day I would guess a token amount acceptable for immediate unexpected expenses.

            For a downgrade on the day I’m not sure what extra expenses you’d have immediately on the day as you’d be boarding the plane so would you not be i more danger of being viewed as having accepted the £200 as all or part settlement?

    • Tim Hewson says:

      How does MCOL award Avios? I expect that you include money in your claim and BA offers Avios in its reply and the Judge rules that that is reasonable and reduces your monetary claim by an appropriate mount.

      • Rob says:

        I am guessing that BA offered to pay in Avios – I would be surprised if the Court suggested that off its own back.

        • Lady London says:

          claim should have been 1.6p based on 75% of the number of avios used for thr first seat, claimed for 2nd seat as well plus 10% of that for infant plus 75 of YQ calculated same way for each seat plus 8% statutory interest on the lot.

          Taking avios means they’ve cheated you again


  • Steve says:

    Is there a time limit on how long you can wait before bringing MCOL action? I had a case like this two years ago where after some correspondence (with precise calculations) BA refused any compensation at all, on the grounds that by taking the downgrounded flight we had agreed to the downgrade (!).

    Also at least at the time I was looking at this I thought that CEDR wasn’t advised for companion voucher cases as they tended to value it at zero?

  • Jimmy says:

    Nice read but food for thought, there is nothing stopping BA to put that reader on a permanent ban (no-fly) list so he will never be able to fly with BA again.

    In the end, BA is a private limited company and they can say we would never want to do business with you again which is totally okay from a legal standpoint. I had taken a financial company to court before and despite I won the court case and compensated, my account was closed down soon after the court case and I was never welcomed to be their customer again, I complained this to Financial Ombudsman but they said this is totally at the financial company discretion to do that and they can only ask them not to but at the end it was not something they can rule over. Not sure if this can apply to the airlines as well but I do not see why not.

    • Mouse says:

      I doubt BA’s IT would be up to the task of enforcing such a ban

    • Adam says:

      They could but given the negative PR that would follow I would guess that it would be an incredibly poor decision on their part if they did. You wouldn’t need too many people to book elsewhere as a result of the feedback for it to have been mistake.

    • Dwb1873 says:

      So, BA would ban someone for expecting them to uphold their end of a transaction, after promoting the service and taking the fees?

      A service they’re trying heavily to further roll out with Nectar etc.

      I mean it would be ludicrous – but then again, it’s BA – but maybe new leadership with encourage a different approach.

    • NC says:

      Which financial institution? Name names!

    • memesweeper says:

      The Financial Ombudsman may not be able to intervene, but there is the general law requiring consumer contracts to be ‘fair’. BA would be in difficulty if it tried to ban a traveller and/or exclude them from the BAEC for winning in court fair and square against the airline. Any term which allowed them to do this would probably be deemed unfair.

      • Jack says:

        Nah, a term allowing them to exclude you from the BAEC/flying with them (by itself) would probably be considered fair. There’s no significant imbalance in rights etc, if they tried to confiscate/forfeit your Avios then it’d be a different matter.

    • Jonathan says:

      They’d also have to compensate you for the value of your Avios (probably at the 1.6p valuation they sell them) if they kicked you out without you breaking the T&C’s.

    • Nadeshka says:

      For BA that seems a bit “cutting your nose off to spite your face”, it’s just turning down a revenue stream. If imagine BA makes more money from each flight booked than banks/ccards make from a customer in a year if you’re paying off everything monthly.

      Also given the award was in avios I’m not sure banning the claimant from ever using them would go down well.

      I took BA to small claims court for EU261 compensation for a cancelled flights several years ago, we settled the week before the court for the avios equivalent of the EUR600 compensation. No hard feelings on either side since, they have had plenty of business from me using those avios, new ones and also cash fares.

    • cinereus says:

      You’re absolutely right and of course that could happen. I’ve also been blacklisted from businesses after having to take them to court to get what was owed.

    • Dubious says:

      You could use some of the compensation to buy a share of the company and then at the next AGM raise a question about the long-term versus short-term sightedness of such a policy.

      • Chris Heyes says:

        Dubious I like it lol I’ve been a share holder of a few company’s and queried a few dubious practices (a few the company’s have acknowledged and corrected)
        Nice day out and a meal included at AGM lol
        Plus insight into further investment
        The Chairman has asked who i am apparently so I’ve been told lol

  • BS says:

    Thanks for the update. I am glad it worked out.
    BA have been utterly shocking in my case, where they refused to re-route under EC261 due to them cancelling a flight route. They only offered a refund. I am over £1000 out of pocket, but I decided it was not worth taking BA to court, because of the effort involved (as in the 14 months in this case). I have put in a Section 75 claim in with my credit card, but if that fails I will just lump it.
    Needless to say, BA has gone down significantly in my estimation. They (were) one of two potential operators for a regular route for work. I have since tried the other airline (Emirates), and will be making a point of not flying BA where I can for now (until Emirates similarly screw up…!). I have already abandoned collecting avios for flights due to the poor availability and high taxes, although I will funnel any avios I get from flying through to Nectar.

    • Lady London says:

      @BS it’s an online form. takr a break and gather your energy…. you can claim up to 6 years after event. Gives you time to ensure you claim everything you can.

      • cinereus says:

        It’s not just filling out the MCOL form. It will be liaising over those 14 months. Paying attention to all court correspondence and paying things like hearing fees in time. Then there’s a short window to prepare and file your skeleton which has to contain all evidence to be relied upon at the hearing. For the average low value MCOL case like this, preparing the MCOL form takes about 30 minutes and the rest of the work is several hours over several months. Not worth it for many people who value their free time highly.

  • Ruth4325 says:

    Interesting. How will this influence BA’s future approach to downgrading compensation? I presume this now gives a legal precedent that should mean anyone downgraded on a 241 can refer to this case in their own negotiations or legal proceedings (should that be required). Will it will make BA more likely to proactively settle or less inclined to target 241 customers for downgrade?

    • Andrew says:

      I don’t believe that small claims court can set a legal precedent sadly.

    • Ben says:

      Small claims court decisions cannot be referred to as case law, I believe.

    • Anna says:

      No precedent and as mentioned in the article, it’s not the first time BA has done this. HFP reader TripRep wrote extensively about having the identical experience on a flight to the Maldives a couple of years ago and his protracted attempts to get the appropriate compensation out of BA.

    • Alan says:

      Would need to go to appeal to become precedent and I would guess BA won’t be risking doing that!

    • David Cohen says:

      From what I understand (and I’m sure I’ll be corrected), they can’t set a precedent in law, however they can be noted and taken into account.

  • Crafty says:

    Well done – an excellent job.

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