NEWS
The Court of Appeal has overturned a High Court ruling that could have triggered a wave of refund claims
Appeal Court reverses ‘serious’ contract ruling by High Court
Ian Taylor
The Court of Appeal issued an important ruling on consumer refunds under the Package Travel Regulations (PTRs) with implications for travel organisers in general and cruise lines in particular. The Appeal Court
last month ruled on a High Court judgment in the case of Sherman vs Reader Offers Ltd (ROL) which hinged on when a package holiday contract is created. Mr and Mrs Sherman booked
Sea ice prevented the cruise going STORY TOP
ahead as planned, with most of the voyage spent around Greenland. The Shermans claimed a refund under the 1992 PTRs, not those of 2018, having booked in 2017. But a County Court judge found against them. The couple appealed, arguing the company was bound by the itinerary issued after booking, and the High Court agreed, concluding the detailed itinerary “was a contractual term”.
Following the ruling, barrister
a Hurtigruten ‘Northwest Passage’ cruise in the Canadian Arctic with Reader Offers for September 2018. They booked by phone on the recommendation of friends without seeing a brochure, paid a deposit and received an Atol Certificate, with a detailed itinerary sent two weeks later.
travelweekly.co.uk
Sarah Prager KC noted: “The implications are serious. It means the formation of contracts does not take place at the time of offer and acceptance but only after you offer all information, [and] you will be held to detailed itineraries unless you make crystal clear itineraries are subject to change.” Reader Offers appealed, with
support from Hurtigruten, and the Appeal Court overturned the High Court’s findings despite still ruling in the Shermans’ favour. Travlaw senior counsel Stephen
Mason explained: “The appeal was on the point that the booking conditions were made clear when the Shermans booked by phone. They paid a non- refundable deposit and were issued an Atol Certificate and confirmation. “The Shermans argued there was
no contract until they received the detailed itinerary two weeks later and the High Court judge concluded there wasn’t a completed contract until the itinerary was issued. But the Court of Appeal agreed there was a contract – in this case, made on the phone with payment of a deposit and issue of an Atol Certificate.” The Appeal Court raised
other grounds for ruling the Shermans were still entitled to a refund, “a technicality in ROL’s
booking conditions”, according to Mason, who said: “We await a reasoned judgment.” But he noted: “There are
important legal implications. A contract is made when a booking is made. If the Court of Appeal had not found in ROL’s favour on that, a minor discrepancy in information supplied to a consumer could mean they could say at any time, ‘There was no contract’.” Mason commended the
companies “for their courage in pursuing the matter to the benefit of the whole industry”. He described media reports of the case as a victory for consumers at the expense of the industry as “rather misleading”. A spokesperson for Reader
Offers said: “We acknowledge the decisions taken by the Court of Appeal on March 21. We’re unable to offer comment at this time as a more detailed judgment is pending.”
4 APRIL 2024 5
PICTURE: Shutterstock/Tolikoff Photography
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