Scottish courts determine Covid-19 refund claim in favour of pursuer
In one of the first cases on refunds in the context of the Covid-19 pandemic the Scottish Sheriff Court, in Dumfries & Galloway Council v NST Travel Group Limited  4 WLUK 156, has found in favour of the pursuer, which sought a refund of £29,452.50 following the cancellation of a school trip to London due to take place on 23rd March 2020. The trip was cancelled on 17th March 2020 as a result of the Prime Minister’s 16th March prohibition on unnecessary travel; the defender sent to the pursuer an email which stated, insofar as it is relevant:
”Following the Prime Minister’s speech yesterday, the continuation of London closures each day and most importantly the welfare of your group. We have made the informed decision to cancel your tour to London on 23rd March 2020. We have already started negotiations with our suppliers regarding refunds and hope to have an outcome in the next few weeks. However this may take longer given the scale of the situation”
The defender subsequently refused to provide the promised refund, on the basis that the pursuer could not have gone ahead with the booking in any event.
The Council, which is responsible for the administration and operation of the school, relied on clause 6 of the tour operator’s terms and conditions:
“If we cancel your booking
We reserve the right to cancel your booking. We will not cancel less than 10 weeks before your departure date, except for unavoidable and extraordinary circumstances, or failure by you to pay the final balance, or because the minimum number of passengers required for the package to go ahead hasn’t been reached. Unavoidable and extraordinary circumstances means a situation beyond our control, the consequences of which could not have been avoided even if all reasonable measures had been taken. If we have to cancel a LIVE! Student event due to us not receiving the required passenger numbers to run the event, we will notify you 70 days before your tour and provide a 100% refund. If your tour is cancelled, you can either have a full refund of all monies paid or accept an alternative tour of comparable standard from us if we offer one (we will refund any price difference if the alternative is of a lower value). In the event a refund is paid to you, we will: 1. provide a full refund of your travel insurance premiums if you paid them to us and can show that you are unable to transfer or reuse your policy. 2. pay compensation as detailed below except where the cancellation is due to unavoidable and extraordinary circumstances (see definition above”
Interestingly, it was common ground between the parties that the Package Travel and Linked Travel Arrangements Regulations 2018 applied to the booking, which encompassed transport, accommodation and various activities. It was conceded on behalf of the defender that the incidence of the pandemic did constitute ‘unavoidable and extraordinary circumstances’ within the meaning of the clause and the Regulations, but averred that neither the clause nor Regulation 13 were engaged, because the pursuer could not and did not wish to proceed with the trip. The extraordinary circumstances did not prevent the provision of the booking components; they prevented the students from travelling. The defender therefore contended that the contract had been frustrated and that any refund should be granted by reference to the doctrine of frustration, with the result that a deduction could be made on account of the defender’s expenses in arranging the trip.
[As an aside, the pursuer was seeking the Scottish equivalent to summary judgment, decree de plano, resulting in the wonderful line in the judgment setting out its position: ‘The terms of the Contract oblige the defender to refund the pursuer and decree should be granted as craved.’]
The Sheriff was convinced by the pursuer’s arguments, and granted the decree sought. He did so on the basis of the express term of the contract between the parties, which, he found, was clear; the extraordinary circumstances referred to need not relate to the defender’s ability to provide the trip, but could equally well apply to any inability on the part of the pursuer to participate in it. By its email of 17th March the defender had cancelled the trip, and the pursuer had elected to receive a full refund. That was the beginning and end of the matter.
Disappointingly for practitioners, having found as he did in relation to the express term the Sheriff did not consider it necessary to go on to consider the term implied pursuant to Regulation 13 of the Package Travel and Linked Travel Arrangements Regulations 2018.
In some ways the judgment raises more questions than it answers, and in particular why the defender did not avail itself of all of the defences which appear, on the summary of the facts set out in the judgment, to have been available to it. Nevertheless, it is an interesting indication of the approach that might be taken by the English courts to the meaning of the term ‘unavoidable and extraordinary circumstances’; and an intriguing reminder that Great Britain truly does comprise two separate legal systems employing entirely distinct procedural language, one (in the opinion of the author) much more evocative than the other.
Sarah Prager is a Barrister with 1 Chancery Lane
She can be contacted at email@example.com
Other Travel Law Quarterly articles on school travel:
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