Restarting Holidays in Uncertain Times. A Quick Guide to the Legal Pitfalls for the Travel Industry
So we all saw what happened with Spain, bookings coming in, people enjoying their holidays, then wham! Suddenly it’s all over on about three hours’ notice. And by the time you read this, it
may have happened again e.g. France? And suddenly you have yet more refunds on your hands. Thanks, HMG!
What does the law say about these situations? If what you are selling is not a ‘package’ then it’s really down to your booking conditions, as long as these are ‘fair’ terms; so I will concentrate on the position where you are selling packages, which is more regulated. Much of this is new territory, a developing area of law. These are my views.
1. What if the changed rule ‘only’ involves the Government introducing compulsory quarantine for returnees? In that case, there is consensus that if you can provide all elements of the
package, you can proceed on that basis; the consumer can either travel, and stay at home for the requisite period when they get back, or if they choose to cancel, the usual cancellation charges will apply, and hopefully their travel insurance will pick up the bill.
2. What if the FCO advises against all but essential travel, to a country? Must you cancel? That has been the consensus for years, and is clearly stated as such on the ABTA website for
example. However that consensus appears to be breaking down. It is not illegal to travel, or offer holidays, against FCO Advice. Points to consider:
- A consumer might argue that they have a right to cancel under Reg. 12 of the PTR’s, saying that FCO advice demonstrates that performance of the package is seriously affected by a force majeure event. There are arguments on both sides – is the package in fact affected? There will be some interesting test cases in due course.
- It is not just an urban myth that consumer travel policies are invalidated if they travel in the face of such advice – it is frequently true. Some policies are completely voided,
some invalidate just the medical expenses section of cover, and other will continue to offer full cover. I know there are some legal arguments suggesting that insurers are wrong to enforce the invalidation, but if you were a consumer in this position, would you fancy taking on an insurance company through the courts?
- You must check that your own public liability insurance is not invalidated by travelling in defiance of FCO advice. If it is, talk to your broker about extra cover, if you want to
- In my view, you need to get informed consent from consumers who are set to travel in these circumstances. Of course, a signed consent form would be ideal but, I realise, not
very practical. You need to be able to show that the consumer was fully aware of the circumstances. Many consumers do indeed want to travel, but may say differently if things go wrong during the holiday.
- There is a general duty of care which you owe to consumers, as the case law shows. In addition, there is the specific requirement in Reg. 18 of the PTR’s to give assistance to a traveller in difficulty.
- Are you planning to enforce cancellation charges against those who don’t want to go? There could be some very interesting test cases on this issue too.
- Finally, there may be strong arguments for proceeding with a holiday against FCO advice if the package is (to borrow a phrase from the world of ATOL Certificates) a ‘multi-contract package’. In other (simplified) words, the consumer has entered into separate contracts with the airline, accommodation etc, but having bought them via the same travel agent, the agent is lumbered with all the rules in the PTR’s. In that case, one can see the attraction of the agent arguing that the airline will enforce its contract with the consumer, as will the hotel/villa, so why should the agent take a hit instead of continuing with the package. That does sound stronger than the position of a traditional tour operator who contracts direct with the consumer for the traditional ‘package’. (But surely the PTR’s were supposed to level the playing field! So that creates an argument for the traditional tour operator too. As we have seen, the PTR’s have often been found unfit for purpose during this crisis).
3. How far ahead must I cancel holidays? If you decide to cancel holidays where the FCO Advises against travel, the cancellation does not need to extend too far ahead. The next promised review date by the FCO, or maybe departure dates just a couple of weeks ahead, would be sufficient to comply with the law, on a rolling basis if necessary.