The demise of Thomas Cook: where do travel claims stand?

Articles | Wed 25th Sep, 2019

We all woke up to the news that Thomas Cook had collapsed, entering into compulsory liquidation. Not only was this troubling news for holidaymakers due to go on holiday, and indeed those stranded abroad, it was also concerning for litigants currently seeking (or contemplating seeking) compensation for injuries that occurred during the course of their package holidays. The question on the lips of many lawyers is what will become of those claims?

Ongoing cases

In respect of litigants who have ongoing cases, the stark reality is that Thomas Cook are unlikely to be able to satisfy any judgment against them. Litigation in such circumstances is therefore likely to be fruitless. Most cases in the circumstances are likely to be stayed until the picture in respect of Thomas Cook’s liabilities to its creditors becomes clearer.

Substitution of parties

There may be an option in some cases to substitute Thomas Cook with an alternative defendant. For those litigants who purchased their holidays on credit cards, a remedy may exist under section 75 of the Consumer Credit Act 1974, although whether or not this will be possible will depend on the precise facts of the case, and in particular whether a claim is brought by the person named in the credit agreement.

There may be a further option to substitute Thomas Cook with a local supplier’s insurer (in accordance with Odenbreit). For example, if a Claimant slipped on the floor of a hotel lobby in Spain and sustained injury, one could pursue the hotel’s insurer. However, this potential remedy is only an option where the injury occurred within the EU. There are further issues that must be borne in mind, including the fact that the claim will then be governed by the law of the country in which the injury occurred. This would include limitation, which could already render this option unavailable to some litigants. Should the UK leave the EU without a deal on the 31st October 2019, or indeed if Brexit happens after that point, the matter is further complicated as this option would subsequently fall away.

Conclusion

The fall of Thomas Cook no doubt poses a number of challenges in respect of ongoing litigation. Whilst some claims may be salvageable with substitution, there are some claims which will sadly suffer the same demise as Thomas Cook.