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david_v_goliath

Interesting Packlink / Hermes / eBay claim - where does the liability lie?

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Hi all

 

First, I have to say, this is an excellent forum. I have already learned so much just reading some of the posts, and I am glad I stumbled across it!

 

I am after some honest advice on the merits of a potential claim. It will be a familiar story, but with some (I think) interesting complications, which muddy the waters. 

 

December 2019 - I received a Google Nest Hub Max (worth £219, in John Lewis). An unwanted gift, so I listed it on ebay, and sold for £150 ish. I am a private seller.

20 January - sold the item for £150 ish. Offered the buyer multiple postage options - Hermes without compensation, or Royal Mail with insurance. Buyer opted for Hermes without compensation.

20 January - I contacted buyer to confirm that this option had no compensation, and please could they confirm they were happy

22 January - I received to response, to contacted buyer again to say that unless they confirmed otherwise by the end of the day, I would send using Hermes without compensation, but that this would be at the buyer's risk.

23 January - dropped off package at Hermes drop off point. I did not purchase extra compensation.

29 January - buyer contacted me to say package had not arrived 

29 January - spoke to Hermes online chat, they launched a 48 hour investigation

31 January - no response, so spoke to Hermes online chat, they launched another 48 hour investigation

31 January - I had lost faith in their online customer services, so wrote complaint email to CEO specifying the above, asking for confirmation of status of package, and that if lost, Hermes will compensate me for full value of item

2 February - receive response from CEO office to apologise, confirm that parcel is "the parcel is lost in our network", and to wash their hands off the problem, because: "There are some ways that parcels can go missing which we have no control over e.g. Parcels can get damaged and items of the parcel can be miss placed, parcels can be miss sorted into incorrect trailers without a scan, or labels can fall off while going through our machinery", and "Please contact Packlink as the parcel was booked through them therefore they will be able to discuss with you the claims process as you have paid them for the service not us, therefore this will need to be done on their system"

2 February - reported the item lost to Packlink, and ask for compensation for full value 

 

My position:

 

I know that some might say it it is "only" £210, but I would like to fight this as a matter of principle.

 

I think that the buyer implicitly accepted the risk of the package getting lost by paying for the cheaper option, and by not responding when I offered the more expensive one. However, I suspect eBay will side with the buyer, and I will be forced to give a refund. If so, Hermes have already washed their hands of the problem, and passed me to Packlink. I think this is wrong: even though I purchased it from Packlink, I chose Hermes from the options they presented, and I understood that my contract was with Hermes, not some intermediary. In any case, Packlink will refuse to compensate me for £210, as I didn't purchase the compensation. I think that is wrong on principle: just as I should not have to purchase insurance against food poisoning when I eat in a restaurant, I should not have to purchase compensation protection when sending a package.

 

My plan is:

 

1. Await response from eBay.

2. If eBay force me to refund the buyer, despite buyer implicitly accepting liability, I will await response from Packlink.

3. If Packlink don't compensate me for the full value...then?

 

My questions:

 

1. Should I make a claim against Hermes, or Packlink? I am very happy to launch a UK Small Claims Court case, or the EU equivalent if I have to go to Packlink (I understand that Brexit doesn't affect that, as we're still in the transition period)

2. What is my strongest argument to make in my claim form, and how should it be worded, i.e. what are the key words to include / references to relevant legal issues (is this negligence by Hermes? Implicit contract with Hermes? Is Packlink liable beyond the compensation cap of £25 or something?)

 

Thank you so much in advance for your help!

Edited by david_v_goliath
Typos and details

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Your biggest mistake was to offer your buyer a cheap postage option with inadequate insurance. Obviously they're going to go for the cheaper option because they're covered by both ebay's Money Back Guarantee, PayPal Buyer Protection and their card.

 

Insurance is to protect you, the seller, and all packages should be sent by the appropriate postage method with adequate insurance, because you're the one that's going to lose out here. It's the seller's responsibility to get the item to the buyer.

 

eBay won't reimburse you.

 

Hermes/Packlink may reimburse you the amount of cover you did have for that postage method, if any.

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Are you an eBay trader or was it a private transaction?


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9 minutes ago, Hannya said:

 

Your biggest mistake was to offer your buyer a cheap postage option with inadequate insurance. Obviously they're going to go for the cheaper option because they're covered by both ebay's Money Back Guarantee, PayPal Buyer Protection and their card.

 

Insurance is to protect you, the seller, and all packages should be sent by the appropriate postage method with adequate insurance, because you're the one that's going to lose out here. It's the seller's responsibility to get the item to the buyer.

 

eBay won't reimburse you.

 

Hermes/Packlink may reimburse you the amount of cover you did have for that postage method, if any.

 

Thanks Hannya - I think you're right about my mistake, I won't even offer those non-compensation offers again. But I also think that by choosing those options, the buyer accepted the risk. I think that I cemented that by explicitly telling the buyer this. 

10 minutes ago, BankFodder said:

Are you an eBay trader or was it a private transaction?

 Hi BankFodder - it was a private transaction. I'd missed this point on my first post, so just edited it!

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Had you been an eBay trader then the legal responsibility would definitely have stayed with you. As you are a private seller, then I think you are right that by making it clear to the purchaser that they had a choice of taking a risk or not, you have managed to divest yourself of the responsibility.

The problem is that PayPal probably won't see it this way and they will probably refund the purchaser.

That leaves you with the problem of having to recover the money back from Packlink or from Hermes. Packlink are basically unreachable because they are in Spain so that leaves you with Hermes.

The big question now is whether you declared the £150 value to Hermes or you declared something else.

 

 

By the way, @Hannya is absolutely right – it was a foolish thing to do and it was no skin off your nose to oblige the purchaser to pay the compensation cover – although we tend to find very often that Hermes renege on this – and even though quite frankly it shouldn't be necessary anyway.


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Thank you, I agree with @Hannya that it was foolish. Never again!

 

@BankFodder, as to what I declared to Hermes, I don't recall being asked to declare the value at all (although if there was such a box, I would have entered £150, or probably the £210). The process was very similar to that described here: (https://support-ebay.packlink.com/hc/en-gb/articles/360006149780-How-do-I-purchase-the-postage-label-). That said, because I purchased the postage from Packlink via the eBay system, presumably the value of the item was known to eBay. I don't know if that information is automatically passed on to Packlink, and eventually to Hermes.

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Well okay we'll say that it is £150.
So as you say, wait until any decision from PayPal or eBay. You can point out that the purchaser decided to take the risk and that you are a private seller.

If you find that PayPal makes the refund and takes the money from you then come back here. You will begin a claim against Hermes. In fact if I were you I would write Hermes a letter straight away and tell them that they have lost the parcel and you are holding responsible and that you want £150. You may as well get that en route
 


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I will send that email to Hermes now - thank you for your help so far.

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Just something to bear in mind - unless you listed this item during a £1 capped final value eBay fee promo you stand to lose a fair amount in eBay final value fees.

 

If the buyer opens an item not received dispute it's always best to refund before they can escalate it (after 8 days). eBay will always find in favour of the buyer if there's no tracking number showing delivery. If its escalated to ask eBay to step in you get a defect against your account and lose your fees. You can argue the toss with Hermes at your leisure.

 

PayPal will also find in favour of the buyer without a tracking number showing delivery to the delivery address they provided you with. 

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@Hannya, thanks for this: as you predicted, eBay are sticking rigidly to their rule that if there is no tracking number confirming delivery, they will side with the buyer (even if the buyer explicitly accepted the risk). I am minded to just offer the refund, and pursue Hermes.

 

@BankFodder, I think it is time to pursue Hermes. I wrote to them yesterday, as you suggested stating simply the following: 

 

"Dear Mr XXXX,

Thank you for your email. 

You have confirmed that Hermes has lost my parcel in its network. 

I am holding Hermes responsible for the loss.

I would like compensation for the value of the item: £219.  

Please confirm that Hermes will provide this compensation, within 7 days (i.e. before 9 February 2020).

Kind regards,

XXXX"

 

I have just had a call from the CEO complaints department stating that Hermes will not consider compensating me, because I purchased the shipping from Packlink, and my contract is with Packlink. I maintained my position that I am holding Hermes responsible, and that I would proceed to a legal claim against Hermes. I also asked for Hermes to email me to confirm that it is refusing compensation, by email.

 

What would you advise that I do next? Should I send a formal letter before action, and provide 7/14 days for a response? Or is my verbal conversation (which I did record) sufficient for that purpose?

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I'm out of the moment so I can't give a full reply at the moment.

however, I thought that yesterday we had agreed that the declared value was £150 and so I don't understand why you have written to hermes asking for much more than that. You are damaging your case.

You are immediately placing them in a position of advantage. if you come here for advice then I think it's probably a good idea to follow the advice or at least tell us an advance what you are proposing to do so we can consider it

 


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If you visit the eBay Seller Central forum you'll see that it's full of threads about various Packlink issues.

 

Other sellers appear to have been fobbed off with who is responsible for any loss. Packlink say it's down to the local courier, the courier companies are saying that all claims have to be made with Packlink, as the contract is with them for their service. 

 

I personally can't see you getting anywhere with either if you didn't send it with correct insurance. Cost cutting when sending out expensive items is not a great idea. If I pay for Royal Mail second class signed for postage for an item worth £100 and it gets lost I wouldn't expect to be reimbursed more than £50, which is what the service I paid for is offering. 

 

I've no legal background, but can't see that you have any grounds here for a claim. If you do get a full refund for using a service that didn't cover you it will open the floodgates for everyone to just pay for a bog standard courier service without adequate compensation. You accepted Packlink's terms when you purchased a service from them. 

 

You are also trying to claim £219 for an item that you sold for £150 - you booked a courier service for delivery to an address that you have eBay sold details for showing £150 and PayPal payment transaction details which show that it sold for £150. Your buyer is unlikely to be complicit in completing any form that is claiming more than what they paid you too. Can you see the issue here?

 

Honestly, I think you're on a hiding to nothing here and personally I wouldn't be chasing this. I would just chalk it up to an expensive lesson learned. Buyers pay for postage, make sure that in future you list with adequate cover. As I said in my opening post, it's to protect you, not the buyer.

Edited by Hannya

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sorry but I disagree with a great deal of what has been said above. I think you have a good action against Hermes. I'm out at the moment and I'll explain more fully later on


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Thank you both for your responses.

 

@Hannya, I think I have learned my lesson! 

 

@BankFodder, ditto. Apologies - I did not mean to ignore your advice. There was some uncertainty (at least in my mind) as to what the correct value of the claim should be. I put £219 on the email as I would need to pay £219 in order to replace the item that Hermes lost. That is the figure that I have quoted in all correspondence with Hermes (i.e. all chats and emails post the buyer telling me that the package had not arrived yet). That is the replacement value. If you think I am only entitled to the approx. £150 (being the amount that I sold the item for on eBay), then I am happy to state this figure in any subsequent letters / claim, with a corrective statement if needed. 

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Okay, this is why I think you've got a good action against Hermes.

If you bring an action in contract then I think you can rely on the Contracts (Rights of Third Parties) Act which basically give you the same rights as one of the contracting parties.

Companies like Packlink and loads of other companies try this trick can say that you're not a contracting partner and so therefore you have no rights. This is not necessarily true any longer unless it is clear from the context that you were not intended to be a beneficiary of the contract or if you were specifically excluded from bringing an action on it. I don't believe that there was such an agreement between Packlink and Hermes.

Secondly, if there is no contract action then it seems to me likely that there is an negligence action. It seems to me that Hermes should reasonably have had you in contemplation as a person likely to be affected by their negligent handling of your goods and the kind of damage suffered – loss of the parcel – is an entirely foreseeable kind of damage. I think this then means that they owe you a duty of care and you have the right to bring an action on it.

Now we get very interesting.
An action in contract is designed to put you to the position that you would have been if the breach of duty had never occurred and the contract had been carried out successfully. So your reason expectation here was that the parcel will be delivered and you would be in pocket to the tune of £150. This suggests that if you bring action in contract then you can sue for £150.

An action in negligence is intended to put you back into your starting position as if the breach of duty had never occurred. Your starting position here is that you were the owner of an item apparently value £210. In principle, it seems to me that if you should in negligence then you'd be entitled effectively to have the return of your item or the return of its full value. It was up to you whether you decided to set it off cheap.
I have to say that I'm a bit amazed at the conclusion here that you might be entitled to sue in negligence for £210 but in contract only for £150.
The only thing that gets in the way here is that you apparently declared the value of £150 – or at least that is what eBay knows that you sold it for so I suppose suing for the original value might make things rather complicated.

I think the safest thing to do here is to sue in contract for £150 or alternatively in negligence £150 plus interest plus costs of the action.

Hermes won't like it of course – and they might decide to bluff you through even to paying the hearing fee. I think you will certainly have to issue the claim papers which I suppose will cost you about £35. However, you will have to be ready to pay the hearing fee of about £100 if they decide to test you.

It's up to you if you want to take that kind of risk. There is a very high chance that they will put their hands up – but of course there is a risk that it could go to court and of course there is a risk that you could lose.

 


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Thank you for your detailed reply @BankFodder.

 

You make an interesting point of law, regarding the different approach to assessing loss and damage under an action in contract versus an action in negligence. The geek within me wants to explore this, before settling on a strategy. Indulging that geek for a moment (even if it is potentially academic!), I understand that:

  • an action in negligence is intended to put [me] back into your starting position as if the breach of duty had never occurred”;
  • the alleged break of duty in this case is Hermes’ “negligent handling of [my] goods”; and that
  • the purpose of an award for compensatory damages, in general, and also in negligence is to return me to the position I would be in but-for the wrongful act (which in this case, is the act of negligence / breach of duty.

If I have understood this all correctly, then it seems to me that in order to bring a successful claim for £210, I would need to establish that but-for the breach of duty, I would not have sent the package at all (i.e. I would have retained an item worth £210). Is that correct, or is my logic wrong? Testing this to the limit, if I had for some reason sold the item for £1, would I still be entitled to the “return of your item or the return of its full value”?

 

Anyway, unless you think that a claim in negligence is likely to have merit, or that I can feasibly, sensibly and cleanly hedge my bets by suing in negligence for £210 and alternatively in contract for £150 plus costs, I will follow your advice that the safest thing to do is “sue in contract for £150 or alternatively in negligence £150 plus interest plus costs of the action”.

 

And if that is the case, would you be able to point me to any existing claim forms on this website that have made a similar claim under Contracts (Rights of Third Parties) Act? If no such templates exist, I’d be happy to have a go and share for others’ benefit!

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Yes, thanks for the reference to the "but for" test. I don't know why – but it had passed me by.

You are quite right that one could never say that but for the negligence you would never send the parcel.

So on that basis I think you have to sue for the declared value of £150 – whether in negligence or contract.

So sue them in the alternative


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Thanks @BankFodder, from reviewing the other threads, it seems the next step is to write a formal letter before action, and then prepare my claim form. Here is what I intend to send for the former. Would be grateful if you could let me know if there's anything missing or glaringly wrong!

 

I'm also planning to prepare the small claims court form in the coming days. Are you aware of any posts on here, or templates, that make reference to the same points of law / arguments relating to the right of third parties act, and / or negligence that I could adapt? I've had a search, and could only find the one case (in which the claimant unfortunately lost, given the judge's determination that the claimant had accepted the £25 cap on the courier's liability). 

 

Finally, Packlink have also finally replied to me too, asking me to submit a compensation claim form. I am wondering whether I should: (a) submit a compensation claim to them and accept the inevitable £25 payout, and risk undermining my position that Hermes is liable for the loss, or (b) ignore it, and risk being accused of failing to mitigate the loss that I consider has been caused by Hermes, and have any potential award knocked down by £25 as a result. Thoughts? 

 

Thank you in advance - again - for your help.

 

By email: [Hermes CEO complaints address with which I have been corresponding] [Does this need to be served in post, or will email suffice, given there is already an active exchange?]

 

Subject: Letter before action

 

Dear Sir / Madam,

 

I refer to my emails of 31 January 2020 and 2 February 2020, and the summary of my complaint contained therein.

 

I also refer to your email replies on 2 February 2020 and 3 February 2020, in which you

confirm that Hermes has lost my parcel in its network, and refuse to compensate me for my loss, stating that “as you had not booked the parcel directly with Hermes and booked the parcel through Packlink, you would need to submit your claim with Packlink as this is who your financial agreement is with”.

 

I do not accept your position. I continue to hold Hermes responsible for my loss. [Should I be stating why, i.e. by reference to the Contracts (Rights of Third Parties) Act, and or an accusation of negligence in the alternative? Or is this to be reserved for the claim form? If not, is there any particular wording I should use?].

 

I am claiming compensatory damages from Hermes, of £149.02. I have calculated this amount as follows:

 

The item contained in the package has an RRP £219. I sold the item on eBay for a total consideration of £141.73. I paid £7.29 for Hermes to deliver the package. Hermes’ failure to deliver the package has caused me to suffer a loss of £141.73 + £7.29 = £149.02

 

If I do not receive a satisfactory response to this letter, by email, within 14 days, I will bring court proceedings without further notice. I refer you to the Practice Direction on pre-action conduct under the Civil Procedure Rules, and in particular to paragraphs 13-16 which set out the sanctions the court may impose if you fail to comply with the Practice Direction.

 

Yours sincerely,

 

 

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But before you send this, make sure that you are aware of the steps to take in bringing a small claim, that you are sure of your ground and you are prepared to take the risk of losing. In my view there isn't a great risk of losing but I'm not sure that there has been a case yet brought against Hermes directly in respect of a delivery arranged by Packlink.

I can't see how negligence doesn't apply – and I don't see why you shouldn't take the benefit of the Rights of Third Parties Act – so I would reckon your chances of success at better than 80% but there is a slight unknown there.

It won't cost very much to bring the action but of course Hermes may decide to pursue to hearing and this will incur a hearing fee. If you win you will get all of this back – but if you lose then that will be your risk.

Once you send your letter of claim then register onto money claim online and start preparing your claim. You can save your work as you go. Post up a draft of your claim here so we can have a look before you finally click it off.


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Thanks again @BankFodder. As you sugested, I have reviewed the small claims process, but before I push 'go', I want to be sure of three things: (a) whether I should be seeking compensation from Packlink (per my question in post 18); (b) the wording of my letter better action (and in particular the two questions I flagged in red font in post 18), and (c) the legal grounds of my case.

 

What do you think about (a) and (b)?

 

On (c), i.e. the legal grounds of my case, here is my understanding. Would appreciate your (any anyone else's) thoughts!

 

I understand that Hermes will refuse to compensate me fully on two grounds: first, that my contract is with Packlink, not Hermes; and second, that I chose not to purchase the optional compensation, from Packlink and in doing so, I accepted a £25 limit on compensation / liability. They have only asserted the former so far, but I expect that they will also assert the latter in due course.

 

I’m going to address these in turn.

 

On the first, I understand that your advice is that I assert that the Contracts (Rights of Third Parties) Act, as this gives me the same rights as a contracting party (which I think would by Packlink). Are you aware of any such actions being brought against Hermes (or other couriers)? Do you know what sort of defences they are likely to assert? You have already mentioned they could assert that the agreement between Packlink and Hermes specifically excludes third parties from bringing an action against Hermes. To me, this seems quite likely, especially if the agreement between them was drawn up by a competent lawyer. I assume that the agreement is private, and so I have no way of knowing whether I am on solid legal ground, or not. Is that correct? Can I request the contract somehow, either through some sort of subject access request, or by mentioning it in my letter before action, and / or as part of any available disclosure in a small claims court case?

 

On the second, I understand that your advice is that the requirement to purchase compensation is an ‘unfair term’ under the Consumer Rights Act (2015). Having reviewed that legislation, it seems I need to argue that the requirement to purchase compensation causes a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the myself. It seems to me that I am on very solid grounding here – unless you know of any likely defences that I have missed? 

 

  • According to the CMA’s guidance on unfair terms: “If wording could be used to reduce or remove consumers’ ability to seek redress to which they would otherwise be legally entitled, it is likely to be considered unfair, even if that was not the intention.” (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/450410/Unfair_Terms_Explained.pdf)
  • The CMA’s more detailed guidance states that: “5.6.1 If a contract is to be fully and equally binding on both trader and consumer, each party should be entitled to full compensation where the other fails to honour its obligations. Clauses which limit the trader’s liability are open to the same objections as those which exclude it altogether. See paragraphs 5.2.1 to 5.2.10 regarding disclaimers generally. 5.6.2 Use of a term restricting liability for breach of consumers’ rights under Part 1 of the Act is very likely89 to be blacklisted as well as unfair (see above, paragraph 5.2.4), and as such its use may give rise to enforcement action as a misleading commercial practice (see part 1 ‘other legislation’ on the CPRs) in the same way as terms that exclude liability in full.” (https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/450440/Unfair_Terms_Main_Guidance.pdf)

 

Finally, how do I show that Hermes has failed to honour its obligations (or been negligent), when I don't have access to the Packlink/Hermes conract in which the relevant obligations are likely set out?

Edited by david_v_goliath

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One point a) – yes clearly you should be able to make a claim from Packlink – but they are in Spain if you wanted to make a court claim. I'm afraid I haven't read through the thread again – but if you haven't begun a standard complaint procedure against Packlink then you probably should do so. I don't really expect you will get very far with them – but who knows we might get a surprise and then your troubles will be solved easily.

At least you will then have a paper trail showing that you tried to claim against your contracting party and that either they didn't respond or that they have declined to reimburse you on some spurious grounds.

Once you are satisfied that Packlink aren't cooperating – then I think the thing to do is to go for Hermes directly on the basis that I've described above. No I'm not aware of any cases. I'm afraid I'm only able to talk in terms of principles as I understand them. Also you should know that for claims of this kind of value Hermes almost always put their hands up.

I'm afraid that I think I had understood that you had already made a claim against Packlink and they had declined. If I'm wrong on that point – then I'm sorry to have caused the delay but you should certainly at least go through the formal Packlink process to see what happens.

I believe that there was one case where they won in the County Court because the judge said that the customer had had a choice of different delivery agents and therefore Hermes terms were not unfair because the customer could have gone elsewhere. In fact as far as I know all the alternatives also had similar terms. I'm afraid I don't know where to find this decision – but it is a Canticle decision – not binding – and I do seem to remember that I thought that the case was very poorly argued.
It is a case that we assisted in on this forum and so the report is here somewhere. Maybe if you find it, you can post a link.


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Thanks

- I had not formalised the claim with Packlink, as I understood that they would simply pay max £25, and take ages to do it, and that I'd end up having to go to Hermes anyway.

 

I have just today filed the "Insurance Claim Form" with Packlink.

They say it could take up to 90 days for a resolution.

 

I have sent them an email asking for a response within 14 days (which I think is reasonable).

If they do not fully compensate me within 14 days, I intend to send a letter before action to Hermes, asking for compensation for the balance (i.e. the total amount, less anything that Packlink have provided by then).

 

Will keep this thread updated. 

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I agree with you. 14 days is perfectly good. I would suggest that at the end of the 14 days you send them a note saying that you will be proceeding against Hermes. Send a copy to Hermes. In fact you can even write to Hermes now and tell them that you have put in a claim with Packlink and that if it is not satisfied within 14 days that you will then be claiming against them and you will then be sending them a letter of claim


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A quick update: as expected, Packlink have sent me a default settlement letter, paying £25 compensation only, and refunding my shipping fee. They state in this letter that:

 

"The compensation claim for loss of the shipment XXX has been accepted. Please remember that shipment was covered only with standard compensation. No enhanced compensation was purchased with the postage label....With this settlement letter, all future legal obligations against us are satisfied."

 

I have therefore sent a letter before action to Hermes, giving them 14 days to pay the balance of compensation. 

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At least that reduces the scale of the problem and makes it much more likely that Hermes will put their hands up.


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