- Law has already recognized “the fundamental right of passengers to be refunded”
- Credit card companies could step in
- You could try “frustration of contracts”
MONTREAL — Many Canadians are worried about losing thousands of dollars if they cancel an international trip during the COVID-19 pandemic, but there are legal and consumer avenues to get all your money back, even in these exceptional times.
Prime Minister Justin Trudeau and other federal officials have urged Canadians to avoid all non-essential international travel, not only to minimize the spread of the novel coronavirus, but also due to the possibility of border closures in different countries.
Air passenger rights advocate Gábor Lukács believes that any passenger who cancels a trip overseas because of the coronavirus health crisis is legally entitled to a refund, regardless of their airline’s specific policy. “And to be clear, I mean refund to their original form of payment, not just a credit for future travel,” said Lukacs, who is based in Halifax.
Canadian airlines, such as Air Canada, WestJet, Sunwing and Air Transat, have all implemented “flexibility policies” in response to the pandemic to allow some travellers to rebook their flights for free or cancel them in exchange for a credit, depending on their original departure date.
“They really don’t want to give you back your money.”
“[Airlines] put out those flexibility policies as a way of steering people away from exercising their rights”, said the mathematician and volunteer advocate, who has filed more than two dozen successful complaints with the Canadian Transportation Agency (CTA). “They really don’t want to give you back your money.”
If any segment of an itinerary is cancelled, the law is clear that passengers are entitled to a full refund, whether or not the reason for cancelling is within the airline’s control.
In a 2013 decision following a complaint by Lukács against Sunwing, the CTA noted that it has already “recognized the fundamental right of passengers to be refunded for the unused portions of their tickets if the carrier is unable to provide transportation on its services or on the services of other carrier(s) within a reasonable period of time.”
The federal Air Passenger Protection Regulations, which came into effect last year, also outline that passengers are entitled to a refund instead of a rebooking if “the arrangements offered do not meet their travel needs or there is no longer any purpose to the travel, because of the disruption.” The “disruption” refers to anything that changes a passenger’s expected arrival time, such as a flight cancellation or delay.
Given the current situation is likely to continue for several weeks, it seems pretty clear that airlines will not be able to satisfy their obligation of providing the service “within a reasonable period of time.” So even if you choose not to get on your flight, keep an eye on whether or not it takes off.
Then there are situations where people can’t change or cancel their reservation in time and the flight departs as scheduled. They “absolutely” have the right to a refund, said Lukács.
If you’re unable to reach your airline or travel service provider to amend or cancel your ticket, “this may amount to breach of contract entitling you to rescind the contract and seek a full refund on that basis,” he wrote on his Air Passenger Rights’ website.
Document the hours of ‘elevator music’
To improve your chances of success, Lukács recommends that you document all your attempts to reach the company, including “the hours of ‘elevator music’ they make you listen to while on hold.”
That’s information that may prove valuable for customers like Camille Lavoie, who has been trying to speak to United Airlines’ customer service since Friday about her upcoming trip to Mexico with her child and her partner. But because she booked with an online travel agency, the airline redirected her to that company.
“I tried calling but couldn’t get the line. So I waited 20 hours on the chat before being told I wasn’t eligible for a refund,” said Lavoie.
Credit card companies could step in
Lukács believes that even customers who accepted a credit towards a future trip per an airline’s flexibility policy can go back and demand a refund though “it might make things a little more tricky.”
“Because the airlines failed to properly inform passengers about their rights, I don’t think passengers have lost their rights,” he told HuffPost. “The airlines misrepresented to passengers their rights. I would say passengers can still go back and say ‘I want my refund. You misled me’.”
And if airlines are “dragging their feet,” he said it’s up to credit card companies to take the lead by disputing the transactions and freeing up the funds. “People will need their money for food and supplies. Their money should not be tied out with airlines or travel operators,” said Lukács.
This is exactly how Lavoie ended up getting her money back … at least for now. Her partner’s credit card provider, Visa Desjardins, agreed to “retro-bill” the transaction. This means Visa disputed the transaction with the travel agency and removed it from the credit card statement.
Visa Desjardins did the same for at least one other couple who spoke to HuffPost Canada about their ordeal. Marc-André and Anne-Marie, who asked that their last names be withheld to protect personal information, were scheduled to fly to Puerto Rico on Monday.
When the Trudeau government issued its travel advisory, they tried for several days to reach Air Canada’s customer service. When they finally did speak to someone — “daunted and discouraged” — they begrudgingly agreed to a credit towards a future trip, even though they had no idea whether they would be able to use it within the next year, which is when it will expire.
But after reading Lukács’s advice on his website, they tried calling Visa Desjardins as a last attempt.
“It seemed like they were expecting my call,” Marc-André told HuffPost. “They were the ones to tell me that the airline was obligated to issue a refund.”
“[Visa Desjardins’ customer service agent] contested the charge there and then. It took less than 10 minutes,” he added, still sounding incredulous over the phone.
How to contact major Canadian airlines
Air Canada - 1 (888) 247-2262. It has listed cancellation, rescheduling and refund policies on this page.
WestJet - 1 (888) 937-8538. Here is their webpage for flight changes or cancellations related to COVID-19.
Air Transat - 1 (877) 872-6728. Click here for Air Transat’s coronavirus-related customer service page.
Sunwing - 1 (877) 877-1755. The airline’s change policy is listed on this page.
Desjardins spokesperson Jean-Benoît Turcotti wasn’t able to comment on those specific cases, but he was pleased to hear of happy resolutions for customers in times of hardship.
“Our priority is to accompany our members and clients through the current situation and provide them with good customer service,” he told HuffPost. “We understand that it’s an unprecedented situation and it might cause a lot of financial stress.”
He explained, however, that Visa Desjardins only records the fact that the consumer has disputed the charge — and cannot guarantee the merchant won’t counter with its own appeal.
Watch: U.S. and Canada suspend non-essential travel across border. Story continues below.
If that doesn’t work, a little-known common law doctrine could come in handy: “frustration of contracts.”
Basically, it covers unpredictable events that are not, and could not possibly have been, covered in a contract.
“In Canada, frustration arises when a supervening event occurs, without the fault of either party, for which the parties have made no provision in the contract, and which renders performance of the contract a thing radically different from that which was to be undertaken by the contract,” wrote Fasken, one of Canada’s largest business law firms in a March 12 bulletin on the pandemic.
“When a contract has become frustrated, the contract is brought to an end, in the sense that both parties are released from any further performance of the contract.”
Lukács believes that the COVID-19 health crisis, combined with the federal government’s recommendation to avoid all non-essential travel, constitutes “an unforeseeable circumstance that makes it impossible to perform the contract for travel services, such as flights and vacation packages.”
“A plane ticket is still a plane ticket after the outbreak.”
Public health authorities’ directives, the moral obligation not to propagate the virus, and the risk involved for a traveller, all contribute to create a “radically different” situation. From a legal standpoint, these contracts can be deemed “frustrated,” and the money paid may be recovered from the payee, the air passenger rights advocate argued.
Lukács is confident that his theory will stand the test of the courts, even if the current travel advisory issued by the federal government doesn’t meet the criteria of many insurance companies for a refund.
“By the time this matter goes to court, the person’s action not to travel will be vindicated by the numbers,” he said. “We’re already seeing an exponential growth in the number of [COVID-19] cases diagnosed. That is going to show to any judge that the passenger’s decision [not to travel] was the right one.”
But Toronto lawyer Nick P. Poon isn’t so sure. “The onus is on the customer to prove the required elements to establish frustration. There is a high threshold to prove frustration,” he told HuffPost.
“It is unlikely the customer can prove that the contract is substantially different from what the parties had bargained for. A plane ticket is still a plane ticket after the outbreak.”
That’s not to say it can’t be done, though. “It’s an unprecedented situation and it would be for the courts to decide,” said Poon, who works for Gilbertson Davis LLP.
The lawyer believes customers might have more luck if their contract with the airline contains a “force majeure” clause that excuses a party from fulfilling a contract due to unforeseeable and uncontrollable circumstances.
“Even though the airlines will have drafted the force majeure clause, it is a clause that protects both parties,” he explained.
Legal fees vs. time to recoup costs
Ultimately, the question of whether the value of the ticket is worth going through the trouble of taking an airline to court remains. “Unless customers represent themselves, the legal fees are probably going to be higher than the value of the ticket,” Poon acknowledged.
At the end of the day, airlines are inducing people to “behave irresponsibly,” Lukács argues.
“Airlines are putting lives at risk by not having a ‘no questions asked’ cancellation policy. Some people may actually choose to travel in order not to lose their money. It is not the right choice, but I’m sure some people will.”
He points out that refunds could be handled online, “and the phone lines could be freed for people who are trying to book a flight to get back home.”