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Legal advice: ‘no-show’ clause challenged

Ever had trouble with a contract term you felt was unfair? Here’s how we were able to help a member challenge a ‘no-show’ clause that left her out of pocket.

Which? Legal member Nicole booked Virgin Atlantic flights through a travel agent for a family holiday to New Zealand.

At the airport, a visa issue resulted in Nicole missing her outward flight. She then discovered Virgin Atlantic had a policy to cancel return flights when a passenger misses their outbound journey.

Virgin Atlantic said it couldn’t help Nicole because she had booked through an agent. She was forced to spend a total of £2,892 to rebook both outbound and return fares.

Our legal advice

We advised that Nicole’s contract was with Virgin Atlantic, making Virgin Atlantic responsible for her journey.

We pointed out that the agent, which in this instance was Gotogate.com, simply acted as an intermediary.

Virgin Atlantic sets out its terms of service in its ‘conditions of carriage’.

We advised Nicole that arguably the no-show clause in these conditions could be unfair under the Consumer Rights Act 2015, as the airline profited from a fare that wasn’t supplied, with no equivalent right to cancel.

We helped Nicole prepare a court claim against Virgin Atlantic. Before the claim went to court, Virgin Atlantic agreed to pay back 50% of the replacement flights, plus Nicole’s small claim fees – a total of £1,516.16 – in a gesture of goodwill.

It also later changed its no-show policy. Virgin Atlantic said:

We would never want to disappoint our customers, and we are sorry for the distress caused. Having worked with the CAA and listened to our customers, we have updated our policy for those who miss outbound flights.

The law on unfair conditions

You’re able to argue that any term in an airline’s conditions of carriage is unfair under the Consumer Rights Act. However, only a judge can ultimately decide whether it is indeed unfair.

We have previously called for no-show clauses to be scrapped, but if an airline enforces it, you may need to go to court to challenge it.

Have you ever encountered a similar ‘no-show’ clause? If so, did you fight it? What was the outcome?

Let us know if this has ever happened to you.

Comments

I would be interested to know why Nicole’s contract is with Virgin Atlantic rather than travel agent Gotogate, which she paid for the flights. When we buy products and services we are generally advised that our rights are against whoever we pay our money too.

That was my thought. Is this something peculiar to the Travel industry, I wonder?

I presume a travel agent, as an “intermediary”, is not technically a retailer and is merely acting in the capacity of an introducer between the potential customer and the ultimate retailer.

I feel this distinction should be made clear in the travel agent’s terms and conditions.

I wondered if this might apply in the case of marketplace traders hosted by Amazon etc.

I find these cases covered by Which? Legal fascinating.

That’s an interesting point, Wavechange, and could well be the interpretation that enables Amazon and others to escape liability for bad trading practices, although I would question that.

It could be argued that Amazon is merely doing on the internet what a local authority or market reeve holding a markets charter does in physical form. It creates a trading place, puts up the stalls, does a certain amount of promotion, procures merchants, and lets them expose their wares for sale while dissociating itself from any responsibility for the merchandise.

I would suggest, however, that Amazon goes much further than that and has become an active and embedded participant in the trading process. It not only hosts the traders on its site, it promotes, or ‘markets’, the goods, it enables the transactions in a way that no physical market operator does, it collects the payments, it tracks the fulfilment of orders, it offers a degree of after-sales service and dispute resolution, and it includes ‘market place’ purchases in its customers’ accounts. I therefore cannot accept that Amazon is an intermediary – a mere introducer of customer to retailer. Without Amazon’s involvement most of these trades would not happen so it is a central and indispensable part of the retail process.

That seems like a good summary, John. My biggest concern is that Amazon and other marketplace traders seem not taking responsibility for preventing dangerous products being offered for sale by their traders. Which? has succeeded in having products withdrawn, but the recent report on phone chargers and power banks is good evidence of the need for more action.

That has been my take on Amazon’s responsibility – they are not just an “advertiser” or a “platform” but take a direct involvement in the sales and distribution process and profit from each sale.

I have asked Which? more than once to give a legal view without much success. However, whatever the legal situation – which seems unclear – I would expect any responsible company to apply its own controls on what it sells to ensure the products are not dangerous, unsafe or non-functional. Just as I would any responsible retailer. Amazon and eBay do not.

Why are Amazon, then, promoted by Which? Why are they not treated as a delinquent company like, for example, Whirlpool? Hopefully, not because Which? derive an income stream from amazon 🙁 .

You have made an important distinction, Malcolm – “they . . . profit from each sale”. That does not occur in a traditional market place, or a car boot sale for that matter, where the organiser just provides a facility in return for stall or pitch charge.

Amazon, et al, do not consider themselves to be a retailer in respect of goods sold in their market place so they accept no responsibility for their safety. That line has presumably been ‘bought’ by the authorities. It is high time it was challenged in court.

There is a clue in the name “Travel Agent”, as an agency is not a retailer. One party to the contract is the airline. The agent is appointed to act on the airline’s behalf as their authorised representative, to negotiate the sale of their services to a third party (you).

The airline determines the scope and nature of the role performed by the travel agent who is acting under the direction and control of the airline. They cannot, for instance, offer you flights or holidays that do not exist, or vary the terms conditions of carriage.

Although an agent may arrange the transaction, they are not usually responsible to you (as the third party) for the contract as long as they act within the scope of the agency arrangement they have with the airline. It is the airline and you who have entered into the contract.

It is similar to the arrangement with an Estate Agent. They are acting on behalf of the vendor and your contract is with the seller of the property.

Consumer protection laws that deal with agency relationships are different from those that cover retail contracts.

@wavechange – ” … that our rights are against whoever we pay our money too.”

In the case of a travel agent (and many other types of agency), you are not paying the agent for the provision of goods and services. They are remunerated by commission paid by the airline or package travel organiser. This is why travel agents have to be bonded to a trade organisation, to ensure that any money they handle is secure.

Thanks Em. The example of an estate agent does seem very clear to me. I did succeed in making a claim against a travel agent for compensation, but that was arranged through my employer than me as a consumer – so consumer law would not be applicable.

Can you give us any advice here or somewhere more appropriate on whether Amazon and other marketplaces should take responsibility for ensuring that the traders they host do not advertise non-compliant and unsafe products.

The legal position currently is that Amazon Marketplace, eBay, etc., have limited responsibility. Which? itself says as much here:

https://www.which.co.uk/policy/consumers/5234/onlinemarketplaces

We can all say “yes”, they should be more responsible, but do we focus on them too much because they are such large, international organisations? Where do you draw the line and how do you define what services an Internet marketplace actually provides?

Should commercial property owners be responsible for what their shop leaseholders sell?
Should Royal Mail be liable for the delivery of unsafe products into your home? What about the local pub, the traditional marketplace for dodgy goods?

Thanks again, E. I had not seen this document and cannot recall it being mentioned in any of the Convos. It had not been published when Which? reported on dodgy phone chargers and power banks: https://www.which.co.uk/news/2019/09/killer-chargers-travel-adaptors-and-power-banks-rife-on-online-marketplaces/

I take your point about who should be responsible for goods offered for sale, but I believe we need to find a way to ensure that citizens can purchase goods from companies without putting themselves at risk. We don’t have much protection when buying secondhand goods from individuals and it seems unlikely that this will change.

John Ward says:
4 January 2020

That is an excellent Policy Document and I am surprised it has not been brought to our attention before. Thanks, Em, for providing the link. The recommendations are comprehensive and I hope they all get implemented.

Two things stood out for me. First the need to ensure that, after the UK leaves the EU, we keep up with the proposed EU legislation on online marketplaces and legal responsibilities to ensure that product safety concerns are addressed more effectively in future and that consumer protection is not weakened. The second thing is the alarming degree of trust that consumers appear to have in the reliability of product reviews posted on-line; this was identified in Which?’s dialogues with individual buyers,

The document does not comment directly on an issue discussed here at length – the sale of electrical products into the UK market with a non-compliant two pin plug. We never received a satisfactory or conclusive response to questions about the liability of the online marketplaces and it seemed to turn on the definition or interpretation of ‘exposing for sale’ which is a specified factor in the relevant electrical safety regulations. The degree to which an online market place is exposing a product for sale when it places a listing on its website still requires clarification in my view.

I see that the Which? article mentioned by Em is mentioned in the Convo: “Why online marketplaces need more regulation”: https://conversation.which.co.uk/money/online-marketplace-regulation

Since we have a relevant Convo, may I suggest we discuss online marketplaces there and leave this one for discussion of unfair clauses in contracts.

Em, thanks for this. I think there is a real difference between the responsibilities you mention – lessors do not profit directly from the sale of individual items, they do not select the items to be marketed, nor do the carriers nor your local pub. Nor do, say, magazine and newspapers profit directly from what their advertisers sell; they do, of course, if the advertise their own offers.However Amazon do appear to profit directly from each sale. Therefore, in my view, they should be responsible and I would like Which? to campaign as strongly as possible – how about a supercomplaint – to put a stop to their behaviour. Is EU legislation currently preventing this, I wonder (in ignorance). Why is Which? apparently taking no real action (or is it?).

John Ward says:
5 January 2020

The Policy Document is only a couple of months old so I presume the recent lethargy in government over anything other than Brexit and the general election has somewhat hampered progress by Which? in pushing its recommendations forward.

It details the EU’s proposed new legislation due to take effect in 2021 and it is important that the UK enacts as near identical provisions as possible.

Thanks Thomas, that’s very helpful. I do appreciate you and your colleagues dropping in to give us legal advice.

Thanks Thomas for this, and Which? for the November report on marketplaces, something I’ve only just become aware of.

It seems to me there is a blurred area between an agent who simply acts as an intermediary, and someone who has a more active role in the sale of goods. Ir would seem to me that when they stock, despatch, take payment they are doing more than acting as an agent. The EU look to be bringing in regulations that will cover those who offer “fulfillment” which is what Amazon do in many instances. Perhaps marketplaces will get round this by abandoning a fulfillment role.

It is time this grey area was cleared up. Anyone who advertises, stocks, delivers, takes payment for, handles returns and profits from a sale is, in my view, essentially fulfilling the same role as a retailer and should take responsibility for the products they promote.

I would hope that Amazon themselves would face up to this responsibility and examine the products before they sell them for assured consumer safety and compliance with EU/UK regulations, whether there is a law in place or not. Meantime, I would like Which? to stop promoting them. A faint hope.
.

My girlfriend and I made a return booking months ago to fly with LOT Polish Airlines last week. For personal reasons, my girlfriend had to fly out a few days earlier than originally planned, so she didn’t need the outbound flight leg any more but still needed the return flight leg back to London. Article 6.5 of LOT’s terms and conditions state:

If the passenger failed to inform the carrier about the change of his/her journey plans before commencement of his/her journey and does not use the seat booked for him/her, and the fare applied for the ticket does not allow such changes to be made, the carrier is entitled to cancel bookings made by it for further flight segments.

My girlfriend notified LOT more than one month in advance of her change of journey plans. For LOT to be entitled to cancel further flight segments, all three of the above conditions must be met, given that they are separated by “and” rather than by “or“. Although the first condition was not met, LOT cancelled her return flight leg, so we had to rebook it for £320. I am therefore claiming the £320 as a consequential loss plus €400 in respect of denied boarding under Regulation (EC) No 261/2004, given that she presented herself at the airport under the original booking reference before using the new booking reference. EU261 is not a breach of contract or misrepresentation, so I can’t make a Section 75 claim for that part of the claim, meaning a County Court claim is going to be necessary.

As usual, I am getting excellent advice from Which Legal Service.