BUSINESS NEWS regulations in light of the Covid-19 pandemic. Ian Taylor reports


‘PTRs not to blame for consumers’ loss of confidence’


Loss of consumer confidence is “the key challenge” facing the industry, according to Flight Centre Travel Group legal counsel Jesse Braid. He told Abta’s Travel Law


Seminar: “We just could not meet that 14-day obligation to refund [under the Package Travel Regulations]. We didn’t have the people or the systems in place.” But Braid insisted the solution


is not to switch away from selling packages or to tear up the Package Travel Regulations (PTRs). He told the seminar: “The challenge is how do we sell packages . . . when the organiser is the one financially liable for the uncertainty?”


Joanna Kolatsis


Braid said Flight Centre Travel


Group would “be more selective with the suppliers we work with”. Lawyers dismissed the idea


of an early overhaul of the PTRs. Rhys Griffiths, partner and head of travel at Fox Williams, said: “This government has more pressing things to do than change the PTRs.” Lawyer Jo Kolatsis, director of


Themis Advisory, added: “The PTRs did what they said on the tin. Without them we’d be in a bigger mess.”


CAA says a review of the Atol system ‘will not be immediate’


The CAA confirmed it will review the Atol Regulations and “financial structures” in light of the Covid crisis, but said this would happen “over time”. CAA group director of


consumer markets Paul Smith told Abta’s Travel Law Seminar: “The CAA understands the massive challenges facing the industry, which unfortunately look likely to continue.” He said: “Over time, we’ll look


to apply the lessons of this and of Thomas Cook. We recognise the timescale [in paying refunds] was a challenge because of the scale [of the crisis] and social distancing requirements, and clearly there has


been a challenge over the interplay between the Package Travel Regulations and Regulation 261 [on air passengers’ rights]. “[But] an area to think about is


where businesses have been able to pay refunds more quickly, and the financial structures and approaches we take over time.” He insisted: “This is not an immediate thing. We continue to apply the framework we always have to Atol renewal.” Smith ruled out a return of


the ‘Flight-Plus’ Atol, saying: “Experience tells us customers do not grasp the complexities of different protections. We don’t think [Flight-Plus] is particularly clear for consumers.”


FCDO advice ‘not legally binding’


Leading industry lawyers agree Foreign Office advice against all but essential travel is not legally binding on travel organisers. However, lawyers have warned


failing to refund customers who cancel due to Foreign Office (FCDO) advice could damage confidence in the sector and said courts could find in consumers’ favour if claims go to trial. Sarah Prager, a barrister at law firm


1 Chancery Lane, told the Abta Travel Law Seminar: “Foreign Office advice does not carry legal importance. It does carry relevance. It’s not legally binding, but we’re trying to build confidence and refusing a refund is not likely to do that.” The industry has split over


Abta policy that members fully refund customers when the Foreign Office advises against travel since Spain joined the UK’s quarantine- restrictions list in July. On the Beach


travelweekly.co.uk


The issue is around situations where Foreign Office advice is used maybe for public health reasons in the UK


and Loveholidays quit Abta in September over the policy. Regulation 12.7 of the 2018


Package Travel Regulations gives consumers the right to cancel a package booking with a full refund in the event of “unavoidable and extraordinary circumstances” at the destination “or its immediate vicinity” which “significantly affect the performance of the package or the carriage of passengers”. Rhys Griffiths, partner and head


of travel at Fox Williams, said: “If the Foreign Office advises against travel, historically that meant there


was a serious situation in resort. Where this issue has arisen is the way Foreign Office advice is used [now]. Blanket, worldwide restrictions lead to quarantine.” Griffiths insisted: “Many companies


have criticised the approach. The issue is around situations where Foreign Office advice is used maybe for public health reasons in the UK.” Farina Azam, partner and travel


lead at Kemp Little, agreed: “It comes down to an interpretation of the conditions.” But she suggested: “If you want


to overrule Foreign Office advice, it would need to be made clear in the terms and conditions at the time of booking. The EC has issued guidance on how to interpret the regulation and Foreign Office advice would be strong evidence that the regulation applies.” Azam warned: “If a case goes to


court, I think a court would come down on the side of the customer.”


Rhys Griffiths 1 OCTOBER 2020 39


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