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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.

  • MKB says:

    Lufthansa and Ryanair have been known to use negative base fares which become positive only after surcharges (YQ) and airport/government “taxes” are added.

    If 75% downgrade compensation was restricted to the base fare only, a downgrade in such circumstances could result in the passenger owing the airline money!

    That rather demonstrates the absurdity of restricting consideration to base fare only.

    • Marek says:

      YQ is a carrier surcharge, so would be included as a fare component for 75% calculation.

    • Mike says:

      I’ve never seen a negative LH fare, there are 0 fares, typically when using a promo code, but not negative.

      FR don’t have YQ on any of their tickets, they simply don’t break down the fares. They’re obviously negative when its £10 and APD is £14.

  • NFH says:

    There have been reports in the past (probably also on HfP) of British Airways downgrading only one passenger on a Companion Voucher booking, in which BA argued that it had downgraded the second passenger for whom no Avios were paid, in order to avoid paying any EU261 compensation at all.

    If this ever happens to you, it is worth quoting paragraph 18 of the Companion Voucher’s terms and conditions, which states “The Cardmember and their Companions must travel together at all times therefore must be booked onto the same flight and cabin class when travelling using a Companion Voucher“.

    Paragraph 18 is binding not only on the passengers, but also on BA. This means that BA cannot downgrade only one passenger on a Companion Voucher. It can downgrade neither or both.

    • Economist-Nearby1 says:

      I don’t think that term prevents BA from downgrading one passenger on a companion voucher.

      • Julian says:

        But unhelpfully you don’t bother to say why you hold that opinion………

      • NFH says:

        British Airways cannot interpret this term in its favour. The term is automatically interpreted in favour of the consumer. Section 69 of the Consumer Rights Act 2015 states that “If a term in a consumer contract, or a consumer notice, could have different meanings, the meaning that is most favourable to the consumer is to prevail“. This codifies the well-established legal doctrine of contra proferentem.

        • Lady London says:

          Great. Does that mean that a further amount under contract for breach causing distress (x 2 parties) can be made even though only 1 passenger was downgraded? I like it.

          This in addition to what passengers are already entitled to under statute EU261?

          Go for it. You’d have to include Amex as a co-defendant from the contract point of view (not for statute based claim EU261 as that falls to BA).

          I would separate the 2 cases if there was any danger of the combined amount breaching the max £10k ? mcol can award

          • NFH says:

            You will rarely find a judge who will award any amount for distress and inconvenience. Courts look at financial loss. If distress and inconvenience forms a significant part of your claim, then you would be more successful with an ADR service such as CEDR. ADR services and ombudsmen routinely award amounts for distress and inconvenience, unlike the courts.

        • Callum says:

          Obviously they can, and do, interpret it in their favour!

          I can see an easy defence against your claim – the condition you quote is specifically about booking the flight. You must book into the same class, but they’ll presumably argue they may have to change it at the gate for operational reasons.

          Which side an independent arbitrator would choose I don’t know.

  • TripRep says:

    So do we now have a legal test case so that it can be quoted in any future disputes?

    • NFH says:

      No, cases in the Small Claims track of the County Court do not create precedents.

      • Charlieface says:

        They are not BINDING precedents, they do make for good arguments to the court though.

        • NFH says:

          Yes, you are right. Quoting another judge’s reasoning can be helpful to a judge looking at a similar case.

          • Jonathan says:

            You need the judges reasoning though ie. a written judgment which you won’t get in the small claims court unless you pay a small fortune for a stenographer.

            Saying that customer X won a case against BA over a downgrade would carry no weight at all.

  • Lady London says:

    If someone has an open and shut case of this nature I suppose you could ask for it to be heard in County Court (next higher level) as a matter of public interest given repeated cases won and BA’s position as a dominant aviation carrier in the UK?

    • NFH says:

      I think you (and others) have misunderstood how this works. There are two ways of issuing a County Court claim – Moneyclaim Online and directly at a County Court. The latter incurs slightly higher court fees, but is necessary where there are more than two defendants or more than one claimant. Moneyclaim Online is merely a quick online way to initiate a County Court claim.

      If the amount of the County Court claim is below £10,000, then the claim will usually be allocated to the Small Claims track of the County Court (as opposed to fast-track or multi-track), which means that neither side can claim their legal costs (solicitors’ or barristers’ fees) from the other. The losing party usually has to pay the court fee as well as some other unavoidable expenses such as travel. There is no such thing in the UK as a small claims court. It is the Small Claims track of the County Court.

      • Lady London says:

        In that case to create a precedent you’d have to be claiming over £10,000?

        • memesweeper says:

          Curiously, you cannot use MCOL to ask for anything other than money. Any ‘specific performance’ in the claim (and that would include issuing Avios or re-issuing a companion voucher) means you can’t use the procedure. Someone messed up in the handling of the case that’s reported here I suspect.

          Also claims by minors cannot go to MCOL, nor if any part of your claim has a component for injury, however minor that component is. I know someone who put a minuscule claim for personal injury into a wider claim for damages to avoid MCOL — thus raising the stakes for the respondent if they chose fight the case. He gambled, correctly, the respondent lawyers would take one look at it and advise an immediate settlement.

      • Yuff says:

        Lawyer, Barrister or Judge? 😁

  • the_real_a says:

    I’m shocked that the judge awarded Avios. I dont think i have ever seen a case where points compensation have been court ordered and for good reason. I wonder if this was primarily the structuring of the case by the OP – i would have solely claimed cash.

    The provider could simply deposit the points in the account, and then close the account and still have complied with the order of the court.

    There is no suggestion BA has ever acted vindictively after losing a court or arbitration case but i certainly would not trust organisations not to do so.

    • NFH says:

      A claimant would always have to quantify the monetary equivalent of the Avios claimed in order to determine the total monetary value of the claim and the consequent court fee payable. But it’s perfectly acceptable to give the defendant the option of settling in Avios, and a judge might look favourably on a claimant who did so in order to avoid betterment, particularly for claims issued before the claimant gained knowledge of the new Nectar/Avios arrangement.

    • Charlieface says:

      Perhaps the claimant had basically accepted the Avios award on the basis of their own ticket, so the judge would not have changed that as it wasn’t disputed.

    • abc says:

      It’s not quite clear from the description of the case, but it seems that the 74,250 Avios were not actually part of the dispute, as that’s what BA said they would pay as requested, and the court case might have been only about the compensation for the second adult ticket, which was then awarded in cash.

  • Magarathea says:

    I had a BA downgrade in 2019 and I decided to pursue my EU261 rights. Here is my story.
    I was downgraded from First to Club on one leg of a long-haul trip a few months before a BA 241 reward flight. At the time of the downgrade the difference in avios was refunded to me for one person only. Despite what some people say on this site, accepting this partial reimbursement does NOT disqualify you from making an EU261 downgrading claim. I was due a 75% reimbursement under EU261 due to the length of the flight. After the trip, I emailed BA to claim my 75% reimbursement. I would note here that the claim was for 75% reimbursement of the fare. EU261 compensation is of course a different thing. After about three months of emailing and phone calls with BA fobbing me off with various spurious reasons, I got a final refusal with a deadlock statement referring me to CEDR if I was unhappy. I set out carefully worded documentation to CEDR with a schedule of calls / correspondence, copies of all correspondence, a reasoned argument referencing EU261 why I was due the 75% reimbursement and a detailed calculation of the cash reimbursement I thought I was due.
    CEDR found in my favour but fortunately, they disagreed with my reimbursement calculation. They significantly undervalued my claim with regard to nothing being provided for the BA Companion Voucher, incorrect calculation of the downgraded portion of the trip and rejecting cash as the mechanism of reimbursement. They said the reimbursement should be part in avios and part in cash. Despite CEDR’s conditions saying decisions are final, I politely wrote to them with reasoned argument suggesting that some of their decision appeared to be in direct contravention of EU261. They amended their decision and I got my cash reimbursement for both passengers valued at 1.6 p / avios for the downgraded portion of my flight. The situation of taxes and charges was uncertain with regard to numbers and what is due.
    It was quite a lot of work but it was satisfying to win and I would do the same again.

  • Tical says:

    Great result and well worth the effort. Let’s see how my situation pans out – BA cancelled avios flight LHR-SOF in July and refused re-routing. Bought alternative ticket and MCOL for amount. BA refunded avios and part of fees (after seeing MCOL) and claim I have accepted refund (!!!) and also that I have no right to claim for wife and infant on the same booking. Looks like we are headed for a hearing but there has been some incomprehensible communication in the meantime

  • Harry says:

    Interesting how some airlines seem to be hungry for negative publicity, as in this case with BA and others simply read the rules, see that they are probably even if not definitely liable, and make good immediately. Those are the airlines that get good publicity. In December 2019 my wife and I were booked on LOT from Tel Aviv to New York [return] via Warsaw in Premium Economy, out on a Thursday. The plane that flew into Tel Aviv from Warsaw developed what was described as a minor fault. It turned out to be too major to repair immediately and our morning flight to Warsaw was canceled. This meant that we would miss our connection. LOT offered a free hotel etc. and rebooking on the next day’s flights, or rebooking anytime the next week. We wanted to be in New York the next day and asked for a re-routing on another airline. LOT booked us onto DELTA nonstop that night. We arrived eight hours late in regular Economy. LOT cheerfully and quickly compensated us with EU600 for the delay and in addition, the EU261 mandated compensation of 75% for the downgraded outward bound leg of the ticket. The return flight from New York was very comfortable and the in-flight crew was great. An all-around very positive experience. The delay was unavoidable in real terms, but LOT really went out of its way to make us happy. When I once flew into Dusseldorf from London with BA and arrived 2 hours 50 minutes late and missed my non-linked onward connection, BA just laughed. No help, no real apology, and just a laugh and a wink, see we got you by 10 minutes. Why is BA so shortsighted. That was three+ years ago and I have not flown BA since! The problem then was that one of the cabin crew called in sick. BA was short-staffed and it took hours to slot in someone else. No force majure, just poor management. I have recommended LOT numerous times since, although they only really got a few months ‘value’ because of COVID!

    • NFH says:

      I’ve had a different experience with LOT. I issued a County Court claim against LOT and Amex in February 2020 after LOT’s system automatically cancelled a flight leg in January 2020, requiring a new ticket to be purchased, as well as a related EU261 claim. LOT settled in December 2020, just before the case was listed to be heard in January 2021. I found LOT to be stubborn and failing to understand its own conditions of carriage. I’ll tell the full story on FlyerTalk some time.

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