p4News Nov13 11/11/09 20:36 Page 4
news
13.11.2009
Ex-Freedom Direct boss may take legal action against the CAA
Industry reaction
in wake of ‘Travel Republic’ verdict this week. By Lee Hayhurst
Mark Tanzer
Freedom weighs
chief executive, Abta
“The failure of the CAA’s
case against Travel Republic
marks a low point in the
up CAA challenge
administration of the travel
industry’s system of financial protection. The
uncertainty that surrounds this area has led to
the initiation of expensive and ultimately futile
proceedings against a prominent Abta member.
FORMER Freedom Direct challenge before the The case for reform of the Atol scheme and the
Holidays boss Martin Jones Travel Republic case con- Package Travel Regulations is now irrefutable.”
(pictured) was taking legal cluded. He was due to take
advice this week about a legal advice this week. David Speakman
potential claim against the Other companies which chairman, Travel Counsellors
CAA, which he blames for survived the XL failure also “While this is a win for those
the collapse of the agency incurred huge losses. who do not want to operate
in April. The Co-operative Travel within an Atol licence, it is a
His move follows the revealed the failure cost it blow to customer financial
CAA’s defeat in its court £1.8 million to protect protection. The industry must realise that customer
case against Travel customers’ holidays. financial protection is a must for an industry
Republic over alleged The three-week trial of that expects by right payment in advance by
breaches of Atol rules. Travel Republic and its the customer.”
There is now speculation managing director Kane
that other travel firms that
C
O
Pirie heard claims the CAA Mike Greenacre
lost money in the collapse
STO
VER
was putting pressure on managing director,
of XL Leisure Group could
R
Y
travel firms to obtain Atols The Co-operative Travel
also seek compensation from the CAA. before it introduced the £1 Atol “It begs the question, why
The judgment means firms that had Protection Charge in April 2008. do I need an Atol? If I do,
been persuaded by the CAA in recent TTG was told at the time this was being what is it I’m gaining if other
years to obtain or extend Atols could now claim done in face-to-face meetings with officials from people can do exactly what we do without one?
there was no legal basis for those demands. the CAA, and compliant firms were promised We are disappointed, not about the individual
Jones, the former chief executive of Freedom that companies considered to be breaking the case but about the implications. This is a
Direct, told TTG he blamed his firm’s demise on rules would face prosecution. retrograde step for consumers and we will have
the CAA’s insistence he obtained an Atol. More galling for the companies that agreed to to take a socially responsible view on it.”
“The cause of our company being put into get Atols or increase the size of their licences,
administration I lay squarely at the door of the is that the CAA has paid out claims from XL Dermot Blastland
CAA for applying a large amount of pressure to customers of all the firms who refused to comply. chief executive, Tui Travel
ensure we entered the Atol scheme,” he said. The Travel Republic judgment has undermined “This outcome is
“The effect of this led to the inability of our its position that they should have had Atols and, disappointing. This may well
business to continue trading and the loss of 110 unless there is a successful appeal, it now looks have been the legal position,
jobs. We were subject to the same threats, as a unlikely that the CAA could recoup any money. but the issue the CAA has
company and as a director, that Travel Republic Chris Photi, senior partner at White Hart Asso- now got is that it does not solve the problem that
were, and essentially we operated the same ciates, said he thought Atol holders which lost out consumers are confused about whether they are
model. Thanks to this judgment we now know over XL could seek legal redress against the CAA. protected or not. They cannot seem to create a
those threats were without basis.” “You would not believe how frightened the level playing field. It’s daft: they want people
Jones, who said he was still “licking his CAA made a lot of people,” said Photi. to be protected – and everyone understands
wounds” following Freedom Direct’s collapse, “I think Jones has a point. If he did not have that is correct – but it is going to require a bit of
said he had been thinking about a legal an Atol he would not have failed.” boldness to achieve that.”
04 13.11.2009
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