When avoiding a crime is frustrating

9th November 2020 by admin

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In a previous bulletin, it was suggested that because of Covid travel restrictions not only was it illegal to travel abroad or at home but it was also illegal for travel companies to permit travellers to travel with them. The question then arises as to what the legal position is. Can the traveller request a full refund or is the travel company entitled to retain some or all of the money that the traveller has already paid?

Travel Insurance

On the face of it this depends on whether it is the traveller or the travel company that has cancelled the contract. However this is misleading because according to the doctrine of frustration of contract the contract comes to an end when it becomes illegal to perform it – without either party having to cancel it. The consequence of this is first, that Regulations 13 and 14 of the Package Travel Regulations 2018 do not apply because they relate to cancellation by the traveller or the tour operator. Secondly Regulation 261/2004 relating to delays, cancellations and denied boarding does not apply because again, the flight has not been cancelled.

This means that the parties must fall back upon the Law Reform (Frustrated Contracts) Act 1943. This provides that in the first instance the traveller is entitled to a full refund. However this is subject, at the court’s discretion, to a deduction for any expenses, including overheads, legitimately incurred by the travel company. The deduction must be ‘just’ but precisely how a court would calculate this is a matter of conjecture.

It might for instance not permit any reduction on the grounds that the travel company is better able to sustain the loss. On the other hand, in the case of tour operators, it may permit the tour operator to deduct the sums set out in its table of cancellation charges on the basis that these purport to be a genuine pre-estimate of losses that the tour operator would incur in the event that the traveller cancelled. The problem with this latter approach however is that it would leave the traveller bearing the burden of the loss and the tour operator relatively unscathed.

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