There are an array of conflicting views on what rights the Package Travel and Linked Travel Arrangement Regulations 2018 confer upon members of the travelling public. The historical view has always been that if the FCO advise against travel to a destination then the consumer is entitled to cancel their holiday to that destination and obtain a full refund within 14 days and without any penalties. This is the position that ABTA has taken for Covid 19 and it has asked all members to undertake that they will operate on this basis.
Last week, Love Holidays and On The Beach both resigned their membership of ABTA because they believe ABTA is wrong. They both argued that whilst it has been convention to offer full refunds when the FCO advises against travel to a destination, that is not actually what is prescribed under the regulations. They have both said that if the airline operates the flight the customer is booked to travel on and the hotel the customer is due to stay at is open and operational, they will not offer refunds unless they are able to obtain refunds from their suppliers.
So what does the law actually say? We have summarised the arguments from both sides.
The customer is entitled to a full refund!
ABTA’s position is that the travel industry has always recognised that there is an expectation or a requirement to refund package customers where the national authority advises against travel to a destination. They say that advice issued by the FCO against travel is evidence of the existence of unavoidable and extraordinary circumstances at the destination referred to in the advice. Under part 3, regulation 12, the regulations state that “the traveller may terminate the package travel contract before the start of the package without paying any termination fee” but only “in the event of unavoidable and extraordinary circumstances occurring at the place of destination or its immediate vicinity and which significantly affect the performance of the package”.
ABTA says that Package Holiday contracts are a special form of contract where the consumer specifically books because of the “peace of mind” it offers. ABTA therefore says that even if all the travel services can be delivered, a package holiday contract will be significantly affected where the FCO advises against travel as that will affect the consumer’s peace of mind. This is particularly relevant where it also affects the travel insurance that customers have to allow them to deal with issues that might arise at the destination whilst on the holiday. They consider that this is in line with both consumer and industry expectation.
If the services operate then the customer has no right to a refund
Love Holidays and On The Beach take a very different view to ABTA. They say that legislation can’t be interpreted by a trade body, especially when the wording of the legislation does not contain any specific provisions on government travel advice. The counter argument pivots on one central point- the regulations never envisaged a situation like the one the Covid 19 brought about. Proponents argue that historically, the FCO would only advise against travel in extreme circumstances where there was a real danger for UK travellers going to that destination. More importantly however, they argue that FCO advice in and of itself does not entitle a traveller to claim a full refund under Part 3, regulation 12 of the regulations. They say that if the Package Travel and Linked Travel Arrangement Regulations 2018 intended to incorporate the advice of government bodies that impacted travel, this would have been drafted into the wording or clarified within the guidance notes to the legislation.
Both Love Holidays and On the Beach argue that where an airline is operating a flight to a destination and the accommodation is open and accepting guests, they are fulfilling their contractual obligations by providing the customer what they have paid for. If the client cannot travel for any reason, they will have to bear the costs of this as it is a matter of choice. They say the customer is able to travel but chooses not to.
So who decides which position is correct?
The likes of Simon Calder and Martin Lewis will continue to go on TV and give their opinions as to what the law says. The problem is that neither is a lawyer and ultimately, complex issues like this can only be determined by the courts.
Ultimately, this matter will not be resolved until it is brought before the courts. We expect that there will be a few claims in the County Court brought by litigants in person where typically the judge will side with the consumer. We expect that one of the bigger travel companies will either seek to move the claim to the High Court or appeal a County Court judgement in the High Court. The High Court will then address the issue on the specific wording of the legislation. The ruling could go either way!
Should I book a holiday?
Until the legal position has been clarified, all consumers are taking a risk if they choose not to travel for any reason if the services they have booked are operational on the dates of their travel. It is advisable to obtain insurance cover for this specific risk although the options for cover are becoming ever more limited and that which is available will be very expensive.
A number of airlines and hotels have recognised the risks consumers are being asked to take and are therefore offering flexible deals that will not provide an option to cancel but will offer the option of re-scheduling travel plans without any penalties up to 24 hours prior to departure. There are also other travel companies that are guaranteeing full refunds if any client is unable to travel as a result of changing FCO advice. You should however look into the company offering the guarantee to ensure that they have the financial standing to be able to deliver on their undertaking.
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