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Advice For Victims of Lowcostholidays’ Closure

By Senior Associate, Travel Litigation

The travel litigation team at Slater and Gordon have received many queries from holidaymakers who have booked holidays with Lowcostholidays, asking what can be done to recover their money.

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The short answer is that, unfortunately there is little that can be done in terms of recovering costs expended on a holiday.

Travel agency Lowcostholidays ceased trading on Friday 15 July, 2015, leaving thousands of British holidaymakers’ plans in ruins. It emerged that the failed travel firm lured in customers with a cut-price sale just hours before it collapsed into administration.

The company relocated to Spain in 2013, is no longer a member of ABTA, and is outside of the jurisdiction of the Civil Aviation Authority (CAA), so is not ATOL protected.

An Air Travel Organisers Licence (ATOL) protects you from losing your money or being stranded abroad. Travel firms operating out of the UK selling air holiday packages must have an ATOL and must issue a certificate to you to prove that protection is in place.

British airlines regulator the CAA previously attempted to block Lowcostholidays from leaving the ATOL scheme, but was unsuccessful.

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Can I Claim For Airline Failure?

Some travel insurers include cover for scheduled airline failure, but this applies only to flight bookings that do not constitute part of a package, so will not help in this instance. It is rare that a travel insurance policy will provide cover for the failure of a tour operator.

If you booked your holiday on a credit card and if it cost over £100 then the card provider will be jointly liable, with the tour operator, to provide a refund under s75 Consumer Credit Act. This, unfortunately, doesn’t help if assistance is required whilst the person affected is already abroad.

There is an option to register as a creditor, but given the many thousands of other affected holidaymakers, sadly, consumers are likely to be low on the list and it’s unlikely they will see much compensation, if anything, and certainly not for a while.

Following Lowcostholidays going bust, Finbarr O’Connell, of Smith & Williamson, the administrators, said: “There are about 140,000 customers we believe have lost out. Sadly this means there will be very little back for any claim. The compensation will be paid to claimants on a pooled basis so everyone would get back the negligible sum of about 1 or 2 per cent.”

Credit and Debit Card Customers

If you booked your holiday on a VISA or MasterCard debit card, which each operate a chargeback scheme, this effectively operates much like s.75 does for credit cards. It is an internal policy, as opposed to a legal mechanism, but is designed to offer similar protection. The Chargeback scheme is also operated by VISA, MasterCard and Amex credit cards, for purchases under £100.

Kieran Mitchell is a travel and international litigation solicitor at Slater and Gordon Lawyers in London.

Slater and Gordon Lawyers have a team of travel claims services specialists with many years’ experience in helping families who have been injured in holiday accidents or suffered holiday illnesses through no fault of their own.

Call us for a free consultation on 0800 916 9046 or, from outside the UK, on +44 20 7657 1555. Alternatively, contact us online and tell us where and when you’d like us to call you.

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