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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.

  • revlou says:

    Couldn’t BA simply have re-issued a new companion voucher to stop this getting to where it did (or are they a cost to Amex so sort of “nothing to do with BA”)?

    • bsuije says:

      I don’t think the “loss” of the companion voucher was the issue…

    • cinereus says:

      That wasn’t the issue and that wasn’t what the claim was about. It was a straightforward EU261 case as per the write-up.

  • Joseph Heenan says:

    Did I miss it or did the reader in this case not receive a 75% refund on the cash “fees” element they’d presumably also paid for the ticket?

    I believe the actual taxes are exempt but 75% refund of the various cash elements BA make up should be due.

    • AJA says:

      It appears they didn’t claim for the YQ element of the fare although they should have done so. I would also argue that this shows that the second fare on a companion voucher is not free. If it was the only thing you would pay would be APD. Most reward seat fares other than RFS fares have a serious element of BA taxes and fees attached which you are forced to pay on an Amex card so it’s easy to show you did not get a seat without a cash element.

      • meta says:

        Plus you can claim 8% interest, postage costs, etc.

        • Lady London says:

          why take avios after that experience? money every time. In addition to the above, should have claimed preparation time at their professsional rate as well.

          Suggest since not bound by a gagging agreement send it to the Daily Mail as well.

          Can someone explain why British Airways put this couple and their infant through this process to claim and why they bothered to turn up in court and try to defend the claim?

          • Callum says:

            Because the judge awarded avios? They were awarded costs. AsI understand it, very few (or no?) judges would award payment for “preparation time” – and certainly not at “professional rates” – on a small claims case.

            Because they thought they would win – the same reason any company defends a case!

          • Lady London says:

            @Callum costs can be awarded in mcol where the defendant has behaved really badly such as wasting court ad plaintiff time by not paying out in perfectly clear cases where they’re liable and making the plaintiff drag them to court to get their money.

            @meta got it

          • Callum says:

            Lady London – If it’s “perfectly clear”, why would there be an onerous amount of preparation time?

            I know you’re correct that in rare cases they do award costs, but I find it hard to believe that includes charging “professional rates” for the plaintiff preparing documents! (And I wouldn’t include this case under that description – I agree with the outcome but it’s clearly not straightforward given this was obviously not considered while creating the legislation).

            Though I fully accept I’m no expert in this area (and my claim against KLM was settled before the court date so my experience is limited) so I’d appreciate being pointed in the right direction if I’m wrong.

          • Lady London says:

            @Callum I’ve read the law and the professional rate concerned is the plaintiff’s own usual rate they charge their own services at based on the fact that they displaced their ability to earn that out of their professional life by having to spend more than a reasonable amount of time trying to get BA to pay up and then preparing a court claim etc in cases where the fact that BA was liable was clear. @meta’s case was the perfect example.

            If BA has wasted the court’s time in forcing the passenger in such a clear case to drag them to court then it’s natural that someone who isn’t a lawyer might take hours to prepare a claim a lawyer would complete in 30min. MCOL is intended for such people.

            I won a case against a very large company that was also open and shut the company was liable. They made no attempt to settle even when asked if court could be avoided because the case seemed so clear. It was clear from the way the judge reacted in court and spoke to them on this in court, that them having wasted the court’s time was an important matter ans I believe that led to h

          • Lady London says:

            …that made sure of me getting max settlement judge could give.

          • Callum says:

            You just saying that you “read the law” means nothing to me…

  • JDB says:

    Well done to the reader! For me it raised a couple of questions: 1) I understand the companion voucher is provided by Amex (not BA). Do they directly / indirectly pay something to BA in cash or Avios each time one is used or is it part of the overall deal? 2) what taxes/fees/carrier charges are paid on say BA staff free tickets or staff 10% ticket or other industry heavily discounted tickets? Given the companion ticket attracts full taxes etc. any reduced charges on industry discounted tickets (not infant/children ones) would seem indicative of the status of the companion ticket. Does anyone know?

  • Tony says:

    Probably been said / provided before but is there now a simple template guide for this ?

    Well done on this as well.

  • Liz says:

    I don’t normally comment, but today have decided to do so because I wanted to say, on behalf of other BA companion voucher holders out there, a BIG THANK YOU to your reader for pursuing this case.
    As I’m sure we all know, pursuing cases in small claims court or any court is a long, lengthy, laborious process, and usually far outweighs the actual money involved. Most people who have just given up. I certainly would have.
    But the moral rewards from doing these things are far higher. Hopefully this sets future precedence for BA in future cases and some moral hazard for downgrading BA companion voucher holders.
    And also THANK YOU for sharing this story with us!

    • meta says:

      There are set rules. Once you issue a MOCL claim it will take maximim of 28 days before BA has to respond. Lately courts have been granting 14 days extra due to covid. When they respond, it will go to the judge who can set a hearing date or rule based on the evidence. It might take another month for this. But overall it shouldn’t take 14 months as in readers’ case, 6 months max.

      The reader simply waited too long for BA to reply.You need to put pressure on BA straight away as otherwise it will get passed on from one person to another.

  • Phil r says:

    I think collectively we should all be putting pressure on Amex. This is where the real leverage is. Could head for points contact them and ask why this seems to happen so regularly and makes a mockery of the perk you get from the card.

  • C says:

    I’m just shocked at the blatant disregard of law and fair dealing by UK retailers, and the attitude that it is good business to force customers to go to court. I just had to file an MCOL claim against another travel related business, who agreed in writing last June they owed me ~£170. They paid ~£70, and then ignored all subsequent emails and letters. I received a default MCOL judgment in my favour, but now need to pursue enforcement.

    I’m going through the same with another UK service business: agreed in writing a refund due to me, but then refuse to respond to subsequent correspondence, forcing me to pursue MCOL. And I’m gearing up for this with my [former-] broadband provider, who have continued to charge me despite agreeing an early termination of my contract due to their unwillingness to provide service to me. I think they know most people wil just give up and let them keep the money.

    • Lady London says:

      @C I struggle with this issue myself with the UK

    • cinereus says:

      Shocked? This has been business as usual for all industries in the UK for as long as I can remember.

    • Charlieface says:

      Once heard a story where somebody MCOL’d Ryanair, they ignored summons and got a summary judgement, which they ignored. Claimant applied for court bailiff, and turned up at the airport trying to impound a plane. Got paid pretty quickly…

  • Billy says:

    Not entirely related, BA refused my EC261 claim in August for a cancelled flight as they claimed extraordinary circumstances.

    Despite the fact that they made no offer to help me get to my destination and operated flights on other days. Is it worth pursuing?

    • AJA says:

      Did you buy alternative flights? Or did BA refund the cost of the cancelled flights? If not then yes claim. If BA refunded the cost of the cancelled flight you aren’t entitled to any further compensation unless you can prove the cancellation was due to a technical issue.

      • meta says:

        BA did the same to me in Augusty I refused a refund and pursued it via MCOL. They settled before hearing.

      • Lady London says:

        It is not their choice to give a refund it’s your choice whether to choose refund or your other rights that may be much more helpful and protective.

        In general never accept any refund even partial from BA for any downgrade or cancellation as you have no other rights once you do this and those other rights are often much, much better. In fact with BA I would go so far as to say an offer of any refund fulk or partial is an indicator to check what bigger rights you have that BA could be trying to avoid you getting.

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