NEWS SPECIAL REPORT


the law relating to agents Legal expert Matt Gatenby, senior partner at Travlaw, clarifies agents’ legal responsibilities I


t doesn’t take a lawyer to tell you these are troubling times. The issues the Covid-19 virus have brought to the fore are


many and varied and affect all types of travel companies. There is a lot of focus on


the impacts the Package Travel Regulations 2018 (PTRs) have on operators, but what about on agents? The law of agency is not often given much coverage except when something goes wrong. Travel agents almost universally know what they are doing when it comes to selling travel services so there is usually little need to get into agency law.


Agency law However, there has been a longstanding debate about exactly who a travel agent is an agent for. It depends on the circumstances,


but the general thinking is that when a customer enters a store or accesses a website, the travel agent is an agent for the customer – especially when the customer is taking a ‘show me what winter sun you have’ approach. The agent may have various


sources they look to and the process is refined in discussion. However, at some point there is a switch where the travel agent is no longer agent for the customer but agent for a principal holiday provider (who we can refer to as ‘the principal’). The agent then puts the customer and principal into a contract. This


travelweekly.co.uk Legally agents


need to be careful not to step outside the instructions [of the booking’s principal]


basic process is what normally happens thousands of times a day. The travel agent is subject to the


usual rules of agency. This includes being the contact point between principal and customer and being paid a commission by the principal in line with the agency agreement and the financial terms within it. Where changes are made by the


customer not being able (or not wanting) to travel, or by the principal being ‘constrained’ to change or cancel, it is often left to the agent to communicate back and forth. It is important to


remember the overall instructions on what to do are set by the principal. That leaves agents


in the frontline where holidays are affected by Covid-19. It is clear heroic


efforts are going on to ensure customers are looked after. However, the legal obligations on an agent are largely restricted to taking instructions from the principal.


Principal’s instructions Going above and beyond in terms of service is not something anyone is going to discourage, but legally you need to be careful to make sure you do not step outside your instructions – be mindful that the actions of an agent do still bind the principal. If you go outside of what the


principal has set out you should do, it could be you left carrying the can. Consistency of instructions and


advice from principals is important to agents. If you don’t believe you have


that, you are entitled to seek it and to push hard for it. An important point to remember


is that as an agent you should neither be the person or company sued if customer patience runs out, nor should you be on the receiving end of chargebacks. That liability sits with the principal. But you should make sure you notify the principal of any developments you become aware of to protect your own position. If you are an agent who has


dynamically packaged services, all the decisions fall to you. If you are an agent for a travel


service that is not a package, the rules apply in terms of taking instructions from the principal, but those around packages do not apply.


REFUNDS AND THE PTRs


There is a lot of disquiet about the effects of the PTRs when it comes to customer refunds – the regulations have never been applied to a situation such as Covid-19. Arguments about the positions being taken and whether the regulations are fit for purpose are going to run until there is clarity from the government, but we have seen countries such as Belgium, Italy and France relax the current position. For now, travel agents need to


keep on doing the work they have always done. They are in the line of fire, but this will end.


Matt Gatenby 16 APRIL 2020 15


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