Cruising towards new travel legislation

Cruising towards new travel legislation

How will the upcoming travel Directive change the practice of law in the travel sector?

John Snyder, assistant general counsel at Carnival UK, compares the forthcoming legislation with the current legislation and explains that the change to practice in this area for commercial lawyers is likely to be minimal.

What day-to-day practical problems are you currently experiencing in your industry?

Many pieces of legislation affect the cruise industry.

Since our business is consumer-facing, we need to comply with the same legislation as many other businesses in the UK—whether it be related to the level of credit card charges applied, Committee of Advertising Practice code compliance or consumer protection regulations.

In addition, we have an international maritime and a travel law angle and, in the case of the latter, we have the Package Travel, Package Holidays and Package Tours (Amendment) Regulations 1992 and Civil Aviation (Air Travel Organiser’s Licensing) Regulations 2012, which shape the way we sell our holidays.

A new package travel Directive will soon replace the Package Travel, Package Holidays and Package Tours (Amendment) Regulations 1992. This change has caused a great deal of concern in travel law circles as the scope and effect of the proposed changes to the law have been hammered out. Starting from some radical proposals, such as making travel agents responsible for liabilities to consumers in relation to holidays sold by travel agents but provided by third-party tour operators, the new law has fortunately had the rough edges shaved off and it is looking like it will be reasonably similar to the current law.

However, part of what the new law will do is to try to catch existing holiday arrangements within the definition of a ‘package’ to offer consumers more protection, in the case of insolvency for instance, and this has been controversial for some businesses with models outside the current definition.

Our cruise holidays, which include those offered by P&O Cruises, Cunard, Princess Cruises, Seabourn and Holland America Line brands, are already a ‘package’ as defined in legislation and therefore we ensure that consumers are given the benefit of the various protections afforded to them.

For example, if a cruise holiday bought by a consumer needs to be changed for reasons such as a technical problem with a ship and those changes are deemed significant under the Package Travel, Package Holidays and Package Tours (Amendment) Regulations 1992, the consumer has various remedies, such as the right to:

  • cancel with a full refund
  • accept the changes with appropriate compensation
  • accept an alternative cruise

The law also ensures that package holidays are bonded by the tour operator, so consumers do not lose their money if that provider becomes insolvent.

How are you dealing with these challenges and resolving these problems on a practical level?

Our trade association, the Association of British Travel Agents (ABTA), has:

  • coordinated a travel industry response to proposals
  • lobbied the policymakers to make sure our voice is heard, and
  • acted as a source of information to members

Are there any organisations, committees, trade associations or working groups active in your industry, that are invaluable in helping you to navigate these obstacles?

We’ve found the involvement of ABTA in this process particularly useful, since it has kept its finger on the pulse of the negotiations in Europe over the last two or three years, and has managed to both predict what the changes will be and educate members about those changes as they become more definite.

ABTA also organises a ‘Legal Group’ where representatives of various member companies meet twice a year to discuss developments in the law and issues affecting the industry.

A more formal legal seminar focusing on legal issues is run by ABTA over two days each year in April. This is a useful way to hear from and meet various in-house lawyers in the travel industry and to benefit from the views of specialist travel law lawyers.

How do you see these areas developing in the future? Do you have any predictions for future developments?

While it looks as if the final law will be similar in many ways for businesses selling package holidays already, one area which is likely to need consideration is how the new law will affect tour operators’ cancellation charges.

There is currently a well-established understanding that any table of cancellation charges based on the date of cancellation by a consumer should reflect the losses of the business due to that cancellation—and that as long as the business makes a loss or breaks even by applying its charges overall, those charges are generally enforceable. It is possible under the new package travel Directive that tour operators will need to justify cancellation charges levied in each and every case, which will no doubt be an area of intense debate in the travel industry.

Interviewed by Diana Bentley. The views expressed by our Legal Analysis interviewees are not necessarily those of the proprietor.

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