Government to set up Thomas Cook injury compensation fund

Business secretary Andrea Leadsom has announced that the government will set up a compensation scheme for Thomas Cook consumers who face losing out on personal injury claims in the aftermath of the company's liquidation.

Leadsom revealed to the House of Commons that Thomas Cook only took out insurance cover for the very largest personal injury claims. The company had opted to self-insure through a provision in their accounts for most other claims, up to a high aggregate amount.

“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”, she told MPs.

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

The scheme will be a capped fund and will specifically focus on consumers facing “the most serious hardship” as a result of injuries or illness and for which Thomas Cook would have been liable.

“We will develop the scheme to ensure only genuine claims are provided with support,” Leadsom added. “The scheme will not consider routine claims covering short-term problems”.

The legislation required to set up the scheme will be introduced to Parliament after the general election in December.

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