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Aviation charities pursue cash from BA and Virgin in US court

Fundraising | Gemma Ware | 16 Apr 2008

Two small British aviation charities are pursuing a claim against British Airways and Virgin Atlantic in a US court that could set a legal precedent in the way charities benefit from crime compensation.

The case centres around a fund set up to compensate victims who claim they were overcharged on long-haul flight surcharges between August 2004 and March 2006.

In February BA and Virgin agreed to set up a £73.6m fund to allow around six million British passengers to claim up to £20 per return journey, after a civil lawsuit.

Charities seek 5 per cent

Now the Association of Air Ambulance Charities (AAAC) and the British Disabled Flying Association (BDFA) have submitted an intervention in a San Francisco court to allow £3.6m, or 5 per cent of this fund to be donated to charity if it remains unclaimed after the end of the claim period in 2012.

They also want to allow claimants to tick a box on their claim form that would allow them to donate any money owed them straight to the charities.

The practice, known as ‘cy près’ is commonplace in the United States, and allows victims to donate any compensation due them to charities linked to the crime involved. 

Although the doctrine originated as a religious law in the UK in the twelfth century, it has since disappeared and AAAC and BDFA want it to be reintroduced in Britain.

BA and Virgin have already agreed to use the principle to distribute money from a separate US $59m fund set aside for American victims of the fuel surcharge to an aviation charity. However, as the case stands the airlines would be able to keep any money left over from the UK part of the fund if it remained unclaimed.

Legal precedent

David Philpott, chairman of the AAAC which represents 13 air ambulance charities, said success could set a legal precedent for British charities to benefit from similar compensation claims in the future.

“We’re optimistic, but we may be the first in a long line of people who have to lean on this door before it opens. But we think right is on our side,” he said.

An American law firm, Steyer Lowenthal Boodrookas Alvarez & Smith, has agreed to work on the case pro bono for the British aviation charities, and representatives from both organisations will fly to San Francisco for an initial hearing on 25 April.

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Who's Who: Gemma Ware