Olympic Holidays has begun legal action against Monarch Airlines, claiming it was overcharged for taxes, insurance and passenger fees over a period of six years from 2004.
A High Court case began today at the Commerce and Admiralty Court in central London, which will hear Monarch accused of profiting from a change in its contract for seats by introducing a fixed fee for a number of charges which were dealt with separately from the agreed price per seat.
It is alleged by Olympic’s parent company, Travelworld Vacations, that Monarch introduced the change in its contract for seats for the Winter 2003 season that went beyond a prior arrangement under which Monarch’s terms allowed it to charge Olympic to recoup its costs according to how these varied.
The case will hinge on emails exchanged between the two firms that set out the seasonal contracts for seats, one of which introduced the change.
Olympic claims it did not receive a key email from Monarch informing it of the airline’s intention to levy a £1.66 per passenger charge for winter 2003-04 and that it paid money for the following seasons on the understanding that Monarch was continuing to recoup its costs.
The court heard that Monarch’s costs subsequently reduced. Olympic argues there was an expressly implied term in its contract that it would not be overcharged.
Mr Browne-Wilkinson, representing Travelworld, said the claim had four parts, the most substantial of which relates to public liability insurance and amounts to £4.5 million plus interest.
He suggested Monarch would claim that Olympic’s case was ‘materially misleading’ as the company must have known about the change to the terms of the contract.
But Browne-Wilkinson argued: “You should unhesitatingly reject these allegations for which there is no evidence.”
The case, being heard by Mr N Strauss QC, is scheduled to take two weeks.