I was wondering

[Debbiedle]

Hi All

In the training industry we are in the habit of charging cancellation fees for short cancellation notification and keeping payment in the case of no shows. This practice has also been a useful "consequence" to use for those who suddenly find they can't attend simply because of bad planning.. somehow they quickly find that they could make a plan.

With the new act it appears as if we cannot charge the cancellation fee or we can only charge a percentage?

In essence that means that my client can cancel his delegation of attendees of a full workshop on the morning of the workshop and we will be forced to carry the cost of the printing, the venue, the caterer and the trainer ( if contracted) with no recourse. We would be able to hide behind the ACT ourselves I would guess and not pay our suppliers based on that, but this will make for really uncomfortable business in the future and I really would not see my way clear to doing that.

I have 2 questions:
Am I correct in my understanding of the act?
If so, what would you put forward as a legal suggestion and/or a business option that would minimise this risk?

At the moment depending on the number of delegates and our history with the client we would charge either full cancellation, or part cancellation, or in rare instances, waive it. I have also "fired" clients because of this.

Any input would be welcome.

[Dave A]

In my opinion:

I believe there can still be a penalty for late cancellations - however the cause for and quantum of the penalty would have to be justifiable.

[Debbiedle]

Okay, so what would be justifiable if the workshop was fully booked.

In other words we had turned people away or postponed their attendance for a different date, in which case we sometimes lose them as they go to a supplier who has a workshop closer to the time. Now we have a workshop with only 4 people, instead of 12. Would it be justifiable to charge a full fee penalty as my chances of filling up the workshop with no notice are zero, and my loss of income is maximum?

I suspect theatres and concerts and sports organisers will have the same problem.

[sterne.law@gmail.com]

Damages is calculated in two ways, depending on what type etc.
The one way is where the person is placed in the position they would have been in had the damage not occurred, and no performance for the contract - eg, venue hire, tea, printing.
The second way, is to place you in the position you would have been in had the contract been honoured - that is the full fees, or if it was a contract wgat ever the contratc would have enriched you by.
There are occassions where you get both types, but they may not overlap. In other words, I claim the fees I would have got and then the costs of enue and eats. This is duplication, th evenue costs would have been required to generate the fees.
I am not sure how they plan to calculate the CPA "damages" - I would think a combination makes sense. The direct costs no problem, particularly where entire delegation cancels. Any real, actual costs also no problem. Example where venue charges per person (OF course you then have the same issue against them charging you) The loss of profit will be the more interesting and complicated.

[Debbiedle]

Thanks Sterne - it is "the more complicated and interesting" aspect that is a huge challenge for this industry, because it DOES happen. And where we had some recourse in the past, we now have very little!

It sometimes feels as if laws and common sense/decency are diametrically opposed.

[Justloadit]

Hi Debbie,

Personally, I would continue as you have in the past, and let the defaulter take you to court and challenge the money to be returned. Once the court date is set, then you simply settle it the day before it goes to court, as this would be the cheaper option.

I am not saying it is right, but there is also a duty of the delegate to have the responsibility of their action.

I have a feeling that the CPA is merely removing the customers responsibility of the action that they decided, and penalizing the wrong party.