U.K. Buyers Having Trouble Collecting BA, Virgin Surcharge Refunds

The law firm that negotiated a settlement in 2008 with British Airways and Virgin Atlantic over the carriers' illegal fuel surcharges will move swiftly to address a barrage of complaints from U.K. travel managers about the administration of surcharge refunds, officials told EuroBTN this week.

BA and Virgin last year set aside a multi-million-pound sum for the settlement, following class actions for unlawfully conspiring to fix a fuel surcharge. The refunds, which are partial, are for surcharges on long-haul tickets issued between August 2004 and March 2006. Four current and former BA executives are facing trial in relation to the incident.

While some travel managers appear to have been paid in full, others have heard nothing from Feinberg Rozen, administrator of the Air Passenger Refund Settlement Fund. Many more have received partial refunds, but with no supporting information indicating which claims have been upheld and which have not. Instead, all that has been enclosed is a general statement that some claims were not upheld because they already had been paid to individual travelers, were disputed or need to be paid to individuals.

PricewaterhouseCoopers UK and HSBC are among the major corporate clients unhappy with the treatment they have received. "The inability to reconcile claims against payments is the key source of our frustration," said Mark Avery, head of business services for PwC UK. "We had to submit data to them line by line, so why can't we get a line-by-line response? We have received only two-thirds of what we were expecting, and we are struggling to obtain the detail to understand what we have been paid. The first problem has been finding the right people to speak to."

Lee Whiteing, U.K. travel and fleet manager for HSBC, has submitted a claim for 14,000 refunds, but so far has received only two cheques, worth £3,000, that carried no supporting data. Furthermore, the cheques were sent to HSBC's global headquarters in London with no name on the envelope, and therefore took several weeks to reach Whiteing.

After numerous e-mail enquiries to the administrator, Whiteing subsequently discovered another three cheques had been sent to HSBC, including one for £97,000 that has not yet come to light. Whiteing told EuroBTN the administrator originally informed him that he would have to wait six months for a new cheque to be issued, but since relented and said it will issue a new one.

Whiteing also requested data that broke down the payments and eventually was sent three spreadsheets itemizing the claims that were rejected, but not those that were accepted. "We have no way of tying the cheques to the claims," said Whiteing. "Some of the fares for disputed claims were paid by our travel management company, HRG, so we believe there is no way individuals could have claimed for them. At the moment, we have no way of knowing how much we should be compensated. Every travel manager I have spoken to is in a similar situation."

Anthony Maton, a partner with Hausfeld LLP, the London office of one of two U.S. law firms that negotiated the £73.5 million settlement in February 2008, said he would try to clear up the matter. "I only became aware of this last week," he said. "It is clear corporates are unhappy with the service they are receiving, and we need to make it work. I will do everything to make sure the matter is resolved. This is the first time U.K. corporates have ever had the opportunity to claim in a case of this kind, and it has been something of a learning experience."

In a written response from Camille Biros, business manager for Washington law firm Feinberg Rozen, said: "With regard to providing line-by-line documentation, it is important to note that due to the volume of documentation (hundreds and, in some cases, hundreds of thousands of flight segments) it would be an overwhelmingly burdensome task to provide confirmation of such line-by-line data with the payment of each claim. The settlement administrator has instead included language on every cheque that informs the claimants they may address any questions about the distribution to the settlement administrator by email or by post. The settlement administrator continues to respond to all such requests for specific line-by-line information as received.

"In regard to HSBC, please note that when HSBC submitted its electronic claim, it did not provide a contact person, but only the company name and the global address. Accordingly, the checks were sent to that address, including the £97,000 check."

In a subsequent statement, Biros said the administrator would contact companies that have raised concerns directly within the next 24 hours to resolve the issues.