The Alternative Dispute Resolution (ADR) system for resolving consumer complaints is broken and in danger of collapse. This is one of the conclusions of a damning new report released today. The report reveals that Government bodies have not heeded the warnings of an earlier report and that regulators have been complicit in making the situation even worse.
The report, “More Ombudsman Omnishambles – 20 months on“, written by consumer campaigners Helen Dewdney and Marcus Williamson, follows on from their June 2016 report that exposed serious failings in the UK ADR system.
The original report highlighted the failings of the Chartered Trading Standards Institute (CTSI), Civil Aviation Authority (CAA) and Ombudsman Association (OA) in their approvals and oversight of organisations providing alternative dispute resolution for consumers and business.
In February 2018 the Government announced that it was seeking to reduce the number of ADR providers in property to one because of consumer confusion. Despite this, the CTSI continues to approve providers in all sectors, significantly complicating the situation for consumers. For example, South Yorkshire Trading Standards and Kent County Council have already been approved for ADR in retail sectors which are already well covered. In addition, the CTSI is failing to deal with one particular provider which was previously known as The Retail Ombudsman (Consumer Dispute Resolution Limited) and which continues to provide ADR services in a variety of sectors. (RetailADR, AviationADR, UtilitiesADR, CommsADR)
The report demonstrates how the CTSI and the CAA are not verifying information given by providers in their annual reports and in the media. In order for an ADR provider to be an Ombudsman, it must meet certain standards and be a member of the Ombudsman Association. The report highlights that the Ombudsman Association has higher standards for approving an ADR provider (see minutes in report). These include not accepting organisations which have poor governance and corporate control and which provide misleading information.
The authors of both reports, Marcus Williamson and Helen Dewdney, are appalled at what they have discovered during this research. Dewdney says “Consumers are confused by the whole ADR sector. Public money – and consumers’ time – is being wasted because of inadequate monitoring and the approval of organisations which shouldn’t be providing services to the public or which simply aren’t necessary.”
The new report makes a total of 13 recommendations. These include:
· ADR providers should all work towards the higher “Ombudsman” status.
· There should be no new entrants to an ADR sector which already has a
well-established and properly functioning scheme.
· Approval bodies should have access to case management systems to check figures
as part of annual reviews.
· Reviews and reports by ADR providers should all be verified by a chartered
· There should be a central portal which signposts consumers to the correct ADR
scheme, funded by the schemes, to reduce confusion for consumers.
Marcus Williamson is a journalist and campaigner with a background in the Information Technology sector. In 2010 he established the website http://CEOemail.com which now helps more than 10,000 people every day to resolve consumer issues by escalating them to the individuals who can make a difference, the CEOs and MDs of companies and other organisations.
What has happened?
On the 2nd October 2017 Monarch Airlines and Monarch Holidays went into administration including those companies trading as:
Monarch Airlines Ltd
Monarch Holidays Ltd (ATOL Number 2275)
First Aviation Ltd (ATOL Number 4888) previously trading as Monarch Airlines
Avro Ltd (ATOL Number 1939)
Customers were informed at 4.00am on the 2nd October. The administrators, KPMG said it had to wait until all of the airline’s planes had landed before issuing the statement, as it does not itself have a licence to operate planes and therefore could not take control of the company until aircraft had landed.
How did this happen?
In the year to October 2016, Monarch made a loss of £291m compared with a profit of £27m for the previous 12 months. It carried 5.7 million passengers in 2015 a 19% drop from 2014.
On the 24th October 2014, Monarch Holdings was acquired from the Globus Travel Group by private investment company and turnaround specialist Greybull Capital for a nominal sum just hours before Monarch’s licence with the Civil Aviation Authority expired.
Security threats and terrorism in Tunisia, Egypt and Turkey has contributed to the downfall of the airline, there aren’t enough bums for seats in the highly competitive short haul market.
On the 25th September 2016, there were numerous online rumours about Monarch Airline’s imminent bankruptcy. And in the days that followed, Monarch obtained additional funds from shareholders, and on 30th September 2016 its Civil Aviation Authority ATOL licence was temporarily extended until 12th October 2016. Monarch Airlines retained it after Greybull Capital provided £165m in investment funding.
However, it wasn’t enough to save the airline. On the 30th September 2017, the Civil Aviation Authority (CAA) extended Monarch’s licence for 24 hours due to financial issue but on the 2nd October 2017 at 4.00am the airline went into administration.
The airline’s website is now managed by the CAA, and corporate and staff affairs directed by KPMG.
What about passengers?
110,000 Monarch passengers were/are stranded overseas and 300,000 future bookings have been cancelled. Although the CAA is keen to point out that passengers are not stranded as they have plans to bring everyone home.
“Flights booked directly with Monarch Airlines from 15 December 2016 onward
Customers with these bookings are not ATOL protected and are not entitled to make a claim to the CAA. You are advised to contact your card issuer, insurer or PayPal for advice on how to claim a refund.
Flights booked on or before 14 December 2016 directly with First Aviation Ltd trading as Monarch Airlines
If your flight was booked with Monarch Airlines on or before 14 December 2016 and you received an ATOL Certificate stating that your flight is protected with First Aviation, you are ATOL protected. We are making arrangements for refunds to be made as soon as possible to these UK customers.
We will be providing more information on how you should claim shortly. You will be able to submit a claim when we make the Monarch claim form available. Please do not submit a claim until advised to do so.
Holidays booked directly with Monarch Holidays
Customers booked directly with Monarch Holidays are ATOL protected and will have received an ATOL Certificate when they made their booking. We are making arrangements for refunds to be made on these bookings as soon as possible, and we aim to complete this by the end of 2017 at the latest. We will be providing more information on how you should claim shortly. You will be able to submit a claim when we make the Monarch claim form available. Please do not submit a claim until you are advised to do so.
Monarch flights and Monarch Holidays booked through another travel company or travel agent
If you booked a flight or holiday with another travel company or travel agent you should contact them directly about your arrangements.
The UK Government has requested that the CAA charter more than 30 aircraft to bring UK passengers home at no cost. It is expected that holiday makers will not have to cut short their holiday.
Yet to go, what are your rights?
Don’t go to the airport as there is no point.
Tour operators must use an ATOL License for package holidays abroad. So your package should be covered by ATOL so you will be able to claim a refund
If you have booked a hotel (worth up to £200) or car hire (worth up to £300) with the flight you should be able to get a refund under ATOL . This is known as a Flights Plus booking, protected by ATOL when booked through a tour operator. Flight-Plus is part of the ATOL Regulations 2012
If you did not receive an ATOl certificate and you are not covered by ATOl (see above) then you are not entitled to any refund. However, if the flight cost was more than £100 you may be able to claim under Section 75 of the Consumer Credit Act 1974. If you purchased the tickets on a debit card or they cost less than £100 you may still be able to claim from the bank under their voluntary Chargeback scheme.
You may be able to claim on your travel insurance but it would need to be a high level cover policy.
Reports of hotels making holidaymakers pay again
The CAA says “There are a few cases affecting passengers on Monarch package holidays who are ATOL protected. Some hoteliers wrongly think that they will not get their money for the Monarch booking and therefore ask the customer for payment. When this happens the CAA steps in to reassure the hotel that payment will be made. We have done this with two hotels in Lanzarote today and the situations have been resolved.”
In the latest apparent “Let’s treat customers as badly as possible” Ryanair business plan, it has decided to cancel 40-50 flights a day from its schedule of over 2,500 flights for six weeks to the end of October. This is caused by incredibly bad management of staff leave. Not only that, it is so poor that they aren’t even managing the cancellation properly. Giving people little to no notice.
Ryanair’s Facebook and Twitter feed provides little information and people are flocking to share their outrage at the appalling management of the whole situation.
What the pilots are saying
I was on Radio 5 this morning and there were a few calls from Ryanair pilots who wanted to understandably remain anonymous. They were saying that Ryanair pay poorly and whilst they recognise that pilots are well paid, it is below the industry average. They also have to pay for their own accommodation and training and so staff turnover is high. A pilot for Jet2 said that Ryanair pilots are always leaving and joining them. Pilots are limited to the hours they can fly a year So the problem is not only that Ryanair has mismanaged the leave, it would also appear that it is because they treat their staff badly they get fed up and quit. Of course, if Ryanair paid better, the cost of the flights would go up? Maybe it is something it needs to look at if it is to survive.
On the news this evening (18/09/17) pilots were saying could happen again next year. (I won’t be flying Ryanair, I use them all the time, I won’t be now!)
Ryanair has now released a list up to 28th October. Still no mention of applying for compensation on there!
What Ryanair should be doing
Ryanair should be trying to get you onto another flight, even if that is with another carrier and must pay you compensation. Airline template and information for all the details. You can use their form but you could write, adapting the letter for your circumstances and the costs that you incurred and give a deadline for payment as they will have a huge rise in claims at the moment methinks!
If the flight is more than 14 days away then you will not get the compensation.
You are entitled to the compensation (details in link above) unless you are offered re-routing, allowing you to depart no more than one hour before the scheduled time of departure and to reach your final destination less than two hours after the scheduled time of arrival”.
If Ryanair has left you stranded you are entitled to the hotel and refreshment/food costs until they can get you onto another flight. You must keep these reasonable though and I would advise you keep evidence of searches to find low cost accommodation etc.
If you have booked a hotel and other things, Ryanair is saying that it will not pay and you may be able to claim on insurance. Again, I’d like to see this tested in court. It is Ryanair’s fault and I don’t see why the insurance companies should pay which will ultimately put our premiums up!
The EU laws don’t cover consequential losses. However domestic law may, but because Ryanair is based in Ireland you would need to sue through the Irish courts. You should be able to get advice from the UK European Consumer Centre. (Court action may mean having to pay Ryanair costs so take advice).
The Association of British Insurers is urging travellers affected by Ryanair cancellations to contact the airline in the first instance to seek replacement flights and compensation. Mark Shepherd, head of property, commercial and specialist lines at the ABI, said:
“Ryanair has admitted it is to blame for the large number of flights currently being cancelled. Travellers affected will be understandably upset and have every right to expect help and support from the airline, whether that is alternative flights with a different carrier or compensation for the disruption suffered and other expenses incurred. If passengers are experiencing additional costs which for some reason Ryanair is refusing to cover they may be able to make claims on a travel insurance policy, but this may depend on the level of cover they bought. Clearly the first port of call must be Ryanair itself.”
Consumer Rights Act 2015 came into force to cover airlines October 1st 2016 but it is such a new law that it’s largely untested and will be until we get a definitive judge-lead ruling. So given the lack of confidence in the airline ADR provider (as highlighted recently on BBC Watchdog) which lost its previous ombudsman title, in circumstances which remain unclear, The Retail Ombudsman is no more the consumer really has 2 realistic routes, that’s to go direct to the airline setting out that there has been a breach and the losses and if there is no remedy there it’s on to court for a ruling on both the CRA and contract breach. I think Ryanair will settle they wouldn’t want to risk it. So write to the airline detailing your case I think you’ll find that they will pay out just as BA did with their fiasco in May.
The UK EU Consumer Centres says “Consumers may be able to pursue the airlines under the Consumer Rights Act 2015 (CRA) as the company should perform a service with reasonable care and skill. Also, another instrument that passengers may be able to use is the Montreal Convention.” The CAA has been looking at how the CRA will work with the Montreal Convention as it is very complicated regarding what and when you are covered as the MC applies once in the sky and over rules anything else. It is far from clear cut!
However, request it as advised in the post and if you follow the tips you’ll get it as people are.
If you have booked a package holiday through a travel company which has put you on a Ryanair flight, it is responsible for getting you to your destination. It, should also be informing you of any issues with your flight. If not, it has not been providing services with reasonable skill and care which is a breach of the Consumer Rights Act 2015 and also Package Travel, Package Holidays and Package Tour Regulations 1992. Regulations 12 and 13 refer to alterations in the package holiday or to departure times or location.
Getting another flight
You are entitled under EU rules to “rerouting, under comparable transport conditions, to your final destination at the earliest opportunity”. Unfortunately what exactly “the earliest opportunity” means has not been properly tested and defined in court. Yet.
Ryanair in their continuing poor customer care are telling passengers that hey may have to wait three days or more before they can be flown to their destination. The Civil Aviation Authority (CAA) says that airlines are obliged to book you on a rival airline “where there is a significant difference in the time that a reroute can be offered on the airline’s own services”. The CAA does not define “significant” Different airlines have different rules regarding what they think is “significant”. However, whether they are legal remains to be seen, so if you get another flight at two days and Ryanair don’t pay then please do take them to court and let me know about it!
The Civil Aviation Authority (CAA) is the enforcement body for upholding the consumer rights of air passengers, and so it is able to take action against any airline that operates out of the UK, regardless of nationality. (It does not, however, regulate Ryanair from a safety perspective, this is done by the Irish Aviation Authority. My investigation into airlines charging to sit children with an adult Plane greedy – Are airlines holding families to ransom? uncovered that Ryanair are making a mandatory charge to sit a child with an adult in the group. The CAA categorically stated that the airline should not charge but would not do anything about it because Ryanair is based in Ireland and the IAA have refused point blank to comment. So I don’t hold out much hope here.)
Ryanair has previous
Just to show that the CAA can take action when it wants to do so, this from September 2015 on the CAA website:
As part of its on-going campaign to safeguard the rights of UK air passengers, the UK Civil Aviation Authority (CAA) has launched enforcement action against Ryanair. This action follows a review by the regulator that found Ryanair is not complying fully with European consumer law designed to support passengers following flight disruption. Ryanair is now required to make policy changes or face the prospect of further enforcement steps leading to court action, if the airline remains non-compliant.
Update 03 February 2018. The CAA is to investigate airlines and seating allocations. Interestingly you will see below that in August 2017 it told me that this wasn’t a problem. It seems to have changed its mind! Finally, after complaints from consumer groups and others it is to investigate the practice of charging for people to sit together.
Update 01 July 2018 the link to the CAA research above now has the findings. However, it appears that it isn’t doing much about it.
Many airlines introduced paying for seat reservations on flights some years ago. Airlines say this is because some customers want to ensure that they are near the loo, by a window, or in the middle if they get travel sick etc. Of course there’s also paying over the odds for legroom seats too! Remember when you could get them for free just by asking at the desk?!
So, what are the legal rules about seat reservations?
EU Regulation (EU) 965/2012
This regulatation states that if a child travels with an accompanying adult in the same class of cabin, the child should be seated in the same seat row segment as the accompanying adult. Where this is not possible, the child should be seated no more than one seat row or aisle away.
The European Aviation Safety Agency (EASA) is responsible for aviation rules and regulations in Europe and their document known as Annex IV (PART-OPS) says: CAT.OP.MPA.165 Passenger seating
“The operator shall establish procedures to ensure that passengers are seated where, in the event that an emergency evacuation is required, they are able to assist and not hinder evacuation of the aircraft.”
Civil Aviation Authority guidance
The CAA states it has published guidance material for UK airlines explaining how to comply with the above rule, part of which says that family groups should be seated together.
“The seating of children close by their parents or guardians should be the aim of airline seat allocation procedures for family groups and large parties of children.
Young children and infants who are accompanied by adults should ideally be seated in the same seat row as the adult. Where this is not possible, children should be separated by no more than one seat row from accompanying adults. This is because the speed of an emergency evacuation may be affected by adults trying to reach their children.”
The CAA says it receives very few complaints relating to seating. A CAA spokesperson said
“On the whole we are satisfied that UK airlines comply with their obligations to seat family groups together. It is important though that passengers are made aware of rights during the booking process. Our advice to passengers is clear, family groups do not have to pay for reserved seating in order to guarantee they sit together. Airlines are obliged to sit children in the same seat row as an accompanying adult during the boarding process. Where that is not possible, (e.g. Boeing 737s or Airbus 320s, where cabins are configured into rows of three seats either side of the single aisle and more than three people are travelling together) the child should be no more than one seat row away under EU rules. The CAA works closely with UK airlines to ensure they understand this obligation.”
05/02/18 Asked for clarity on this change in view the CAA did not provide a comment.
So, how do major airlines compare when allocating seats for adults with children?
Short haul from
& up to long haul
Free to gold/silver members at booking, Bronze week before flying, anyone 24 hours before free allocation
Free allocation at check-in
Free allocation to anyone 7 days before flying
£3 to £11
Free to Vantage Club gold members incl. legroom, 24 hours before free allocation
from £1.99 to £21.99
Free allocation at check in and to those with Flexi tickets & easyJet Plus cardholders)
£8 or £13 or £15
1 adult must pay €4 so children get free reserved seat. Max. 4 children for each adult per booking get free seat reserved. Anyone free at 4 days 2 hrs before flying
A spokesperson for BA said “We prioritise seating families travelling with children together, which we organise a few days before online check-in opens. We will always make sure than any child under 12 is seated with an adult from their group.”
A spokesperson for Thomas Cook Airlines said: “We always give seating priority to families flying with children to make sure that at least one accompanying adult is always seated with a child. To guarantee the whole family is seated together, families have the option of paying for seat selection.”
A Thomas Cook spokesperson said “We always try to seat customers travelling together next to each other wherever possible, with priority given to families travelling with children. If a customer has chosen not to use the pre-booking service and, in very rare circumstances, their child is initially allocated a seat away from them it will be automatically re-assigned.”
A Monarch spokesperson said “Monarch will always try to sit families together and a child (2-15 years) will never be sat without an accompanying adult. During peak periods, it may be necessary to split groups/families, but a child will always be sat with an accompanying adult from the same group/family.”
An Easyjet spokesperson said “If passengers choose not to pay to select their seats our seating systems will always aim to seat families together when they check-in online. If a passenger does leave checking in until close to the time of departure and all of the seats have been allocated to other passengers, we will try to allocate as many of the family together as we can at the airport and if necessary will ask other passengers if they are prepared to move once they are onboard the plane.”
A Ryanair spokesperson said of the mandatory charge, introduced in October 2016:“This way adults can choose where to seat their children. This will also allow adults to check-in for their flight 60 days before departure. It will not be mandatory for any other adults or teenagers in the booking to reserve a seat; however they may choose to do so.”
Comparing Ryanair equality
Does Ryanair apply this policy to all parties that require individuals in need of care to be sat together? Where a reduced mobility passenger is travelling with an accompanying adult, Ryanair says it “…contacts them by email and do our best to ensure the accompanying passenger is seated next to them and allocate them a seat free of charge.”
Is Ryanair in breach of The Equal Status Acts 2000-2015, because adults with children are being charged where others without children are not, which is therefore discriminatory against those with dependants? Also, others in need of a carer are not charged.
Irish Aviation Authority
Ryanair comes under the jurisdiction of the Irish Aviation Authority (IAA). A spokesperson for the IAA said “If a child travels with an accompanying adult in the same class of cabin, the child should be seated in the same seat row segment as the accompanying adult. Where this is not possible, the child should be seated no more than one seat row or aisle away. All Irish airlines must comply with these requirements and the IAA monitors Irish airlines to ensure compliance.” Despite my requesting a response regarding Ryanair’s mandatory charging from the IAA Director of Safety Regulation Ralph James and CEO Eamonn Brennan and repeated requests to the Press Office and making a complaint using the IAA procedure, the IAA has declined to comment any further on repeating the line on the EU guidance and refuses point blank to comment on monitoring Ryanair’s practice and whether it will take any action on the possible breach of the EU guidelines and indeed the Equality Act.
The European Consumer Centre Ireland said that this matter wouldn’t fit under their remit and suggested contacting the Commission for Aviation Regulation (CAR), as it is the national enforcement agency. But it too said it did not have any legal remit in the area. The European Consumer Centre UK said “This is an area that we would seldom advise on as the experts in this field would be the Civil Aviation Authority who has already provided a comment. It also recommended contacting the CAR.
So, there you have it, none of the organisations in Ireland responsible for overseeing airlines practices want to get involved in monitoring airlines seating children with their adults despite the equivalent in the UK doing so.
If your luggage is lost or damaged you should be able to claim from the airline. Different airlines have different rules, but as a general rule of thumb, the CAA says airlines often don’t automatically consider themselves liable for consequential losses and so the only way you could enforce a request if the airline initially refuses to do so, is in court. A consequential loss may be missing a connecting flight because you were waiting for your luggage. Airlines will usually deal with these issues on a case by case basis. They should pay out for essentials and you will have to follow the airline’s specific procedures for complaints, noting the time within which you need to complain. You may get more on your travel insurance but this will depend on the cover taken out and of course the excess.
Luggage is considered lost after 21 days. You must report the fact that your luggage has been lost, delayed or damaged at the airport and keep a copy of the Property Irregularity Report (PIR) which staff of the airline will complete. It is not a legal requirement to have this and some airports may not have them. To make a claim you must then contact the airline in writing:
Lost/stolen/damaged luggage – within 7 days
Delayed bags from receiving the delayed bag –within 21 days
If the airline accept your claim, they may pay for your baggage to be repaired, or may provide replacement baggage. If your luggage turns up a day or two later the airline has to make arrangements for getting it to you as efficiently as possible. Where luggage doesn’t show up, you should be able to monitor it through the tracing procedure, either by contacting baggage services at the airport, the airline’s central department or by logging into an online baggage-tracing page with a reference number.