Travel Republic case will not be heard by the Supreme Court
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Travel Republic
Case
Bad news for confused
holidaymakers was confirmed during the summer, with the Supreme
Court’s decision not to hear a further appeal in the Travel
Republic case (Civil Aviation Authority v Travel Republic
[2010] EWHC 1151). This case involved the definition of
a “package” under the Package Travel Regulation 1992 (“the
PTRs”). This was an opportunity to clarify what has been a
troubling issue since the introduction of the PTRs, and more so
since the explosion of the online holiday retail market.
The PTRs are an important
piece of the consumer protection armoury emanating from
Europe. They not only set out what information must be made
clear to the customer and what must be included in the holiday
contract, but they also give the holidaymaker a right to sue the
tour operator in the Courts of England & Wales if the tour
operator breaches the holiday contract.
That can include the
common situation where the holidaymaker is injured or made ill as a
result of the tour operator’s (or more likely, their supplier’s)
fault, which means that the injured person may bring a claim for
compensation in their home Court. That has the advantage of
not just convenience, but also a familiar and trusted legal system,
and a system of truly compensatory damages. They can bring
that claim directly against the tour operator or retailer, rather
than having to pursue a foreign defendant who may not be easy to
trace or have very deep pockets. In terms of access to
justice for injured claimants, this is vitally important.
To be included in this
protection, the holiday must be a “package”. There is no such
protection for independent travellers. A package means the
pre-arranged combination of at least
two of the following components when sold at an
inclusive price and when the service covers a
period of more than 24 hours or includes overnight
accommodation:
(1) transport;
(2) accommodation;
(3) other tourist services accounting for a
significant proportion of the package.
That sounds relatively
clear but there have been various erosions of this definition
through the Courts over the years, making what falls under the
scope of the PTRs less clear.
This is particularly
relevant in the age of internet and other direct forms of
bookings. The PTRs were drafted at a time when most people
booked a traditional two week package deal through their local
travel agent. However, consumers’ buying habits have changed
whereas the scope of the legislation has not.
The Travel Republic case
In 2009 the Civil Aviation Authority (CAA)
brought charges against Travel Republic, an online travel agent
which sells accommodation, flights and other travel arrangements,
often together. It is a not untypical website.
The consumer picks the core elements of their holiday (flights,
hotel, car hire etc.) during the same session, and pays for them
together. They are told in the terms and conditions that what
they are purchasing is not a package, but separate transactions
between separate suppliers (the airline, hotel, and car hire
company). Travel Republic acts merely as an agent for the two
and convenient ‘one stop shop’.
The thrust of the CAA’s
allegation was that Travel Republic was selling packages as defined
by the PTRs, which in turn meant that it should have an ATOL
license. The ATOL scheme is one which protects consumers
financially when tour operators fail (Goldtrail and XL are recent
examples). To operate without a license is an
offence.
At first instance the
Westminster Magistrates Court cleared Travel Republic, to some
extent following the Court of Appeal’s earlier judgment in ABTA v
CAA, and found that Travel Republic "sell components of
holidays separately, but at the same time” i.e. not
packages. They were successful again at the subsequent High
Court appeal. The CAA sought permission to appeal further to
the Supreme Court which was finally refused in the summer.
The decision means that
consumers are likely to continue to find the situation
confusing. They may think that when they buy multiple
elements of a holiday together, that will bring with it the full
force of consumer protection laws, but in fact the reality may be
very different. They may receive no protection at all.
If they are injured or become ill at the hotel, or if the tour
operator becomes insolvent, then they may be left with no financial
recompense.
The time certainly seems
right for reform, and that appears to be happening on two
fronts. Firstly the EU Commission has consulted on reform of
the PTRs, although no implementation date is known. Secondly,
the Department for Transport has consulted on, and is expected to
implement, reform to the ATOL Regulations (the Civil Aviation (Air
Travel Organiser’s Licensing) Regulations 1995).
It is not yet known
whether either reform is going to directly address the definition
of a package once and for all. Until that happens, the
situation is likely to remain unsatisfactory for consumers.
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