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Government plans compensation scheme for Thomas Cook customers with serious injury claims

Government plans compensation scheme for Thomas Cook customers with serious injury claims

The Government is developing plans for a compensation scheme for Thomas Cook customers who face losing out on injury compensation claims because of the company's collapse.

Speaking in Parliament today, Business Minister Andrea Leadsom said the Government intends to develop a statutory compensation scheme to provide for customers facing the most serious hardship, as a result of injuries or loss of life suffered while on a Thomas Cook holiday, who should have been supported by the now defunct firm.

Legislation for the scheme is likely to be brought in after the December election, but Leadsom said she believes that any future Government would implement it. 

Speaking in the House of Commons today, Leadsom said: "Thomas Cook only took out insurance cover for the very largest personal injury claims. For agreed claims below this figure up to a high-aggregate amount, they decided to self-insure through a provision in their accounts.

"As Thomas Cook has entered into liquidation without ensuring any protection for pending claims, the vast majority of claimants who are not covered by the insurance, including customers who have suffered very serious injuries and loss of life, will be treated as unsecured creditors.

"This means it is very uncertain whether they will receive any of the compensation they would have ordinarily received against their claims.

"This is a potentially unacceptable prospect for some Thomas Cook customers who face significant financial hardship through no fault of their own where Thomas Cook should have rightly provided support. This is an extraordinary situation which should never have arisen. While the Government cannot and will not step into the shoes of Thomas Cook, we do intend to develop proposals for a statutory compensation scheme."

For more information on Thomas Cook's collapse, see our guide: Thomas Cook stops trading – your rights.