p6-7 dec19 17/12/08 21:32 Page 6
news XL fallout
ttglive.com
The law on dynamically packaged travel sales will be tested in the courts as the CAA agrees to pay
XL split-contract consumer claims – while also seeking compensation from agents. By Lee Hayhurst
CLAIMS.
CAA sets sights on
C
O
‘unlawful’ agents
STO
VER
R
Y
THE CAA will pay claims from customers of XL package under a single contract between the
Leisure Group who booked with non-Atol agents customer and itself.
it claims were split-packaging – but it will also ■ An agent without a licence should have
demand the money back from agents. obtained its own licence and sold the package
The two-strand strategy means consumers under a single contract between the customer
will get their money back, while the CAA seeks to and itself; or
recoup its losses, although this could mean a ■ Ensured that the package was protected
NewsPics court case if agents refuse to pay. under a single contract between the customer
Victory parade: Abta’s Simon Bunce (right) outside the Royal The CAA said its stance would apply to and a principal holding a licence.
Courts of Justice in 2006, with Field Fisher Waterhouse’s bookings through Freedom Flights and Pure The CAA is expecting 80,000 claims resulting
Peter Stewart (left) and barrister Charles Haddon-Cave Flights, another seat-only operator that failed in from the XL collapse, but has so far received just
August, two weeks before XL collapsed. half of these.
PACKAGE DEFINITION.
In the case of Freedom Flights, there are
Abta: It was right
thought to be 12 agents responsible for a large
Manny: Government will not act
number of claims before the numbers drop off
significantly. The CAA will assess how each agent THE GOVERNMENT will never sort out the
to challenge CAA
was operating, before deciding if it ought to be confusion in protection, according to Thomas
held liable for claims paid. Cook chief executive Manny Fontenla-Novoa.
ABTA has stood by its decision almost three years The CAA said it was “not appropriate” for Atol Despite scheduling a meeting with transport
ago to challenge the CAA over its interpretation holders who had correctly protected their clients to minister Geoff Hoon to discuss the issue
of the law governing package holiday sales see funds they had collected through the £1 Atol Pro- following the collapse of XL, Fontenla-Novoa
against criticism it added to the confusion. tection Contribution used to refund claims relating doubted anything would change.
Abta won its case against the CAA in January to what it alleged was an “unlawful transaction”. “The government won’t do anything because
2006, forcing the CAA into a lengthy review of its “The trustees will take action to recover the airlines have such a strong voice,” he said.
package travel guidance. monies from the organising agents who made “It has made its position clear. They sympathise
Noel Josephides, an Abta director and Sunvil these unlawful sales,” it stated. with our situation, thank us for bailing out
managing director, said had he been a board The CAA has set out its view of how agents those XL customers left stranded overseas and
member at the time he would have opposed should have operated: bringing them home, but do nothing about it.”
Abta’s decision to bring the High Court case. ■ Agent with a licence should have sold the
Abta, however, said that as a trade body it had
to challenge what it saw as an attempt by the
CAA to, in effect, create law in a guidance note on
CRIMINAL LAWSUIT.
package holiday sales. The association successfully
argued the CAA had gone too far in its interpre-
Travel Republic faces ‘Atol brea
tation of the law, although a subsequent appeal
appeared to water down that first judgment. THE CAA has started criminal legal proceedings The summonses against Travel Republic and
Josephides said that, in the light of an Abta against online agent Travel Republic and its Pirie claim that it broke Regulation 3 (1A) (a) of
member now facing criminal proceedings, he was managing director, Kane Pirie. The Civil Aviation (Atol) Regulations (see below).
concerned about the impact that case had. Both had 20 summonses issued by Westmin- Travel Republic, which has always insisted it
“It’s one thing to win a legal case; it’s quite ster Magistrates’ Court last week relating to al- operates within the law, declined to comment.
another to cope with the utter confusion that leged breaches of air travel licensing regulations. The firm is known to have already enlisted
came about as a result,” he said. A first hearing has been set for February 11 Field Fisher Waterhouse, the law firm that
However, Andy Cooper, Abta’s director of at which it will be
development, said: “The market has changed but decided if the case
the law has failed to keep up with it. will be heard at a
“What’s needed is not fudges and court cases, magistrates’ court
it’s a fundamental change.” or crown court.
06 19.12.2008
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