The following article is by Claire Ingleby Director, mb LAW for Travel Law Today 4th ed. which can be downloaded from ABTA's Member zone and read here.
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The new Package Travel Regulations come into force on 1 July 2018. As ought by now to be well known, the definition of a ‘package’ under the 2015 Package Travel Directive has been significantly extended. Accordingly, the type and number of travel businesses who will be organisers going forward will be greatly increased. These will include companies who have historically traded as agents for the third party suppliers where, amongst other scenarios, the minimum of two different types of travel service are purchased from a single point of sale and are selected before the traveller agrees to pay. No amount of imaginative drafting is likely to change this reality.
Check your business model
Many of those operating with an agency business model may still be in denial as to their contractual responsibilities and liabilities post 1 July 2018, but there seems little doubt that these must now be faced up to, including in relation to the terms and conditions and other documentation they will need in their brave new trading environment. It is clear from the consultation which has just closed that the UK government intends, as could be expected, to very largely apply a cut and paste approach to the Directive in relation to implementing legislation. Although draft regulations have yet to be published, there is no reason to delay consideration of the compliance steps now required given the relentlessly diminishing timescales.
It is worth at this stage brieﬂy reﬂecting on why ‘new’ organisers need to have terms and conditions which take account of this role. As a general rule, there is no doubt that the objective of protecting your legal position is best served by acknowledging your responsibilities and then drafting to manage these, as far as the law allows. Many limitations and exclusions of, and defences to, liability will only be available if specifcally written into the applicable conditions. Other rights, such as the ability to rely on (reasonable) sliding scale cancellation charges, will only arise if specifcally reserved in the contract. More particularly for package travel arrangements, the regulations will require that the ‘package travel contract’ sets out the full content of the agreement including all prescribed information (of which there is a great deal). This information includes a statement of the organiser’s responsibility for the proper performance of all travel services included in the contract in accordance with the detailed provisions of the Directive on this.
Check your booking conditions
So, comprehensive and carefully drafted booking conditions which are tailored to the particular arrangements the organiser will be offering to the public will be a necessity. As mentioned, these must take full account of not only the specifc requirements of the Directive and new UK regulations but also the particular travel services which will be included in the package. The issues which these conditions will need to address include the following:
- Responsibility for proper performance of the contracted services including notifcation of any lack of conformity
- Alteration of the terms of the contract and cancellation by the organiser
- The traveller’s right to cancel and the cost implications of doing so
- The traveller’s right to transfer their contract
- The obligation to provide assistance to a traveller in diffculty
- Complaints procedure
- Insolvency arrangements.
The new Directive is a great deal more comprehensive and creates a much more prescriptive and restrictive regime than that applicable under the 1992 Package Travel Regulations. The terms and conditions required to comply with, and to provide the organiser with protection in respect of, this new legal environment will accordingly need some careful thought and not simply the adoption of a set of existing tour operator booking conditions. For those companies who are already operating part of their business on a principal organiser basis alongside an agency model, the package conditions they are currently using will need a detailed review and overhaul before being applied across the business.
Check your other paperwork
Booking conditions are of course the key contractual document which will require attention. However, there are others. Consideration also needs to be given to supplier and agency agreements, confirmations, invoices, website terms and the prescribed pre-contract information. The scale of the time and effort required should not be underestimated. It should also be remembered that assuming, as expected, the new regulations apply to bookings made from 1 July 2018; travellers booking from that date will get the full benefit of their enhanced rights irrespective of when they started researching their booking and what the terms and conditions may say at the time they first looked at brochures or a website. At the very least, it is time to start the process of understanding what compliance will be required for businesses.