The following article was written by Alex Padfield, Director, Hextalls writes for Travel Law Today, 5th Edition which can be read here.
The Package Travel Regulations have finally been published and they take effect from 1 July 2018. Now is the time to prepare, if you haven’t already done so, and one of the main areas to consider is your terms and conditions. Make sure you review them as soon as possible, not only to comply with the new law but also to protect yourself and provide your customers with the best possible experience. There is a lot to consider and this article is intended to steer you in the right direction but you will need more than these comments to go through things thoroughly!
Keep it simple!
Your T&Cs will need to be in “plain and intelligible language”. That is not only required by the PTRs but also under the Consumer Rights Act 2015. So, try to avoid legal jargon wherever possible and try to make your T&Cs as user-friendly as you can. A simple test is that if you do not understand them, will your customers?
Do you understand where you fit under the Regulations? Many companies who currently act as agents will become “organisers” under the new Regulations. Does this apply to you? If you are going to be an “organiser” you will need full package travel terms and conditions. You will not be able to rely upon somebody else’s and there are particular terms that must go in. It might be that you are an organiser on some occasions but also sell packages on behalf of somebody else. If so you will need to point customers in the right direction and make sure you do not use your package holiday T&C’s with those customers.
Will you be selling linked travel arrangements? If so, your T&Cs should also reflect that.
Overall, make sure you understand your business model and that your T&Cs reflect it properly and avoid any possibility of confusion.
Certain information must be included in your T&Cs. Some of it is the same as now but there are some new aspects including telling people whether any of the travel services will be provided as part of a group. This includes: the approximate size of the group; telling them what language will be used for any tourist services where it’s important to be able to understand what’s going on; and telling people whether the holiday is generally suitable for persons with reduced mobility. You will also have to be ready to give further information about the suitability of the trip taking into account a particular customer’s needs, if asked. If you have agreed any special requirements with your customer, you will have to include those in the contract as well so be prepared to issue more paperwork if necessary.
It is very important to review clauses relating to alteration of the price and other elements of the package. You can only alter the price if you have reserved the right to do so in your T&Cs and there are limitations on what you can do. Likewise, you can only change other parts of the package if you have reserved the right to do so and again there are limitations. If you do not refer to this in your T&Cs, you will not be able (contractually) to make any changes even if they are insignificant.
Think about cancellation and amendment charges. You can charge reasonable cancellation fees but you must be able to justify the amounts charged. Any amendment costs will not be able to exceed the actual costs incurred in making the amendment and if you have standardised cancellation charges these will have to be based on the time of the cancellation before the start of a package and the expected cost savings and income from any future sale of the services which have been cancelled. If you do not have standardised cancellation charges any charge will have to be equal to the price of a package minus the cost of savings and income from any future sale of the travel services.
Think about this carefully as it is an area that you might be challenged on! This is not only required under the new PTRs but also under the Consumer Rights Act.
If things go wrong
As we all know, things sometimes go wrong and you will need to ensure that the clauses relating to this reflect the PTRs. For example, do your clauses relating to liability mirror the new provisions? What about when you realise you will be unable to provide a significant part of the package after the holiday has begun?
Do you tell customers that if they think there is something wrong, they have to tell you quickly? In addition, who should they contact and how? That information will not be in your T&Cs but you should provide it elsewhere.
Think about whether you might want to limit your liability as you can do this in certain circumstances and it is often sensible, subject to reasonable limitations.
There is a lot to consider. One thing to bear in mind is that even if your T&Cs are not quite right or you do not manage to update them before the new law comes in, many of the rights under the PTRs will be implied into the contract anyway and consumers will still be protected, no matter what your T&Cs say! But this makes it all the more important to understand the changes and get your T&Cs right before then and will mean customer experience is enhanced.
Try to stay up to date with developments over the next few weeks and months. Just to make things more interesting, the CAA is also consulting on changes to the ATOL Regulations, which could also affect what you have to say in your T&C’s. For example, the wording in relation to financial protection might change. ABTA will help you keep up to date on these issues.
ABTA’s updated model terms are also available here.