It’s a TIING Thing!
by Katherine Leppard, April 20th, 2012
Despite, the rain pouring down and last minute change of venue due to floods (!) the TIING networking event yesterday was great fun!
Here are some pictures of our lovely Tiingers at The Phoneix, Victoria.
TIING is a Linkedin networking and information exchange group for directors, owners and senior managers of tour operators, travel agencies and their professional suppliers.
The purpose of the group is to share and discuss industry information and developments, share expertise and to provide networking opportunities for its members.
In the current membership there is a diverse group of directors, owners and senior managers in the travel profession including tour operators, agents, lawyers, social media, PR, insurers, recruitment and regulatory.
Join the discussions and receive invites to future get togethers at LinkedIn.
ATOL Reform
by Katherine Leppard, April 13th, 2012
ATOL reforms– CAA respond to the industry’s calls for an extension to the implementation of the reforms.
In response to the industry’s unrest about the looming deadline for the implementation of the ATOL reforms (30 April 2012), the CAA have announced a ‘focus on education’ during May – Does that mean they will not take enforcement action?
The reforms – brief overview
The ATOL regulations come into force on 30 April 2012 and make changes to the current ATOL regime which include the following:-
- Addition of Flight-Plus – sales of outbound flights with accommodation or car/hire require the business to hold an ATOL.
- Retail agents selling Flight Only will need to hold an ATOL unless they meet the specific exemptions.
- ATOL holders are required to have written Agency Agreements with all retail agents.
- ATOL certificates must be issued immediately on booking and state what type of booking it is (ie Package, Flight-Plus or Flight-Only). This change comes into force later on 01 October 2012 and applies to all travel companies not just those who are the ATOL holders.
The purpose of the reform of the regulations is to provide greater protection and clarity to consumers. This is important for any industry to generate confidence in the consumer market. Having witnessed the impact of failures of some large travel companies in recent years, it was clear that the protection for consumers to the travel industry could be vastly improved.
Whilst, the industry have generally supported an increase in clarity and protection for consumers and these reforms do seems to take us a step in the right direction towards achieving a satisfactory level of consumer protection, airlines are still not included. Although there is some debate about this across the legal profession, the government state that primary legislation is required in order for airlines to be brought into the ATOL regime. The Civil Aviation Bill includes sections relation to ATOL reform which will allow for further regulations to be made in relation to airlines. The government have announced that (if the Bill is passed through parliament) they will consult on further regulations for airlines to bring them in the scheme in 2013.
For now we are focussing on the effects of the current reforms and the imminent deadline of 30 April 2012 at which time the CAA could take enforcement action against any company not complying with the regulations.
The deadlines and the CAA position
Whilst the industry has been aware that reforms would take place for some time and there was a long consultation process, the industry has taken serious objection to the limited information provided up to the issue of the wording of the final regulations and the implementation of them.
The industry has therefore called for an extension to the implementation on 30 April 2012. The government were not willing to extend the deadline.
The CAA have announced that during May they will continue to focus on education and assistance to the industry in meeting the regulatory requirements. Does this mean that they will not be taking enforcement action for those (inevitable) companies that will not be able to comply in time? The CAA do not answer this question directly but they say they will focus on education and assistance to the industry “except where businesses are not taking appropriate steps to comply”. To me this means that if you can show you are trying to comply and are making reasonable attempts to do so, the CAA are more likely to seek to assist you rather than prosecute you – until 1 June 2012 where they will revert to their “normal enforcement stance”.
Consumer protection in the transition period
The good news for consumers is that the Air Travel Trust has announced that they will be sympathetic to consumers during this transitional period who claim for package and flight-only sales where agency agreements are not in place or where documentation falls short of the new requirements. So, there is at least the saving to the industry reputation that if companies go bust through trying to implement the reforms, the consumer is most likely to be protected.
ATOL deadline 30 April – are your agency agreements in place?
by Katherine Leppard, April 5th, 2012
The Department of Transport has today published and laid the long awaited final version of the ATOL regulations before parliament and they will come into force on 30 April 2012.
The ATOL reforms require ATOL holders selling through Agents to have a written agency agreement in place with those Agents.
The deadline for agency agreements to be in place is 30 April 2012. If, after that date, a sale is made by an Agent on behalf of the ATOL holder without the required written agreement being in place, the new regulations will have been breached by both the ATOL holder and the Agent, leading to possible sanctions being imposed by the CAA.
Whilst the CAA published draft mandatory terms to be included in the written agency agreements a few weeks ago, the final version could not be formerly produced until final regulations were published. ATOL holders and Agents now have only 10 working days to ensure that they are complying with the regulations and we are still waiting for the final version of the mandatory terms.
ABTA have branded the timetable unrealistic and the industry is still calling for the DfT to extend the timetable. There are fears that travel companies will have to reduce trading if they do not have the written agency agreements and requisite ATOLs in place by 30 April and that this may cause the failure of some businesses.
ABTA had announced plans to launch an ABTA-ATOL Joint Administration Scheme but we are still waiting for details on this.
If you are looking for advice on the new regulations, agency agreements or ATOL, please contact our travel law team.
Ryanair’s new debit card – controversial but is it legal?
by Katherine Leppard, September 20th, 2011
The only way for consumers to avoid “admin fee” is to pay using Ryanair’s branded debit card – its controversial but is it legal?
Ryanair have announced that they will launch a new debit card in October and from 1 November 2011 customers will have to pay using this card to avoid paying Ryanair’s fee of £6 per flight per passenger (which adds up to £48 for a family of four on return flights).
Currently, Ryanair applies the same principle but passengers can pay using any Mastercard pre-paid card to avoid the charges. Limiting this to one Ryanair branded card is a significant limitation leaving consumers no choice but to buy that particular card or pay the extra charges – consumers are effectively prevented from shopping around for a Mastercard pre-paid card that suits them.
Which?, the consumer advocate, raised a ‘Super Complaint’ against payment surcharges and a particular focus of this complaint related to airlines. Which? estimates that £300 million was spent by consumers in 2010 on payment surcharges in the travel airline sector alone.
The Office of Fair Trading’s (OFT) response to this super complaint said that [under the current legislation]:-
- it is misleading to separate compulsory charges from the headline price. A payment surcharge is compulsory if a reasonable proportion of consumers have to incur additional costs/significant time to avoid paying them.
- Where there are surcharges there should be clear “1-click” information available to consumers on the level of charges applicable to different types of cards and any discounts available.
In the current regime Ryanair do however have an argument to say that consumers have the option to pay by Mastercard pre-paid cards which are readily available at no additional cost and on that basis it could be argued that the payment surcharge is not compulsory and so does not need to be included in the headline price. However, on the basis of the guidance from the OFT, this argument may become less viable when only customers with a Ryanair debit card can be excused the fee because the options available to the consumer are significantly more limited.
It will however be for the OFT to bring proceedings under the Consumer Protection from Unfair Trading Regulations 2008 if they consider Ryanair have mislead consumers by failing to include a compulsory charge in the headline price.
The OFT also made the further recommendation that legislation be implemented to ensure that:-
- Any costs the retailer incurs for processing debit card payments should be treated as part of the cost of doing business and included in the headline price (note that charges for other methods of payment can be charged separately. For example credit cards under the Credit Card (Price Discrimination) Order 1990).
This means that Ryanair’s (and other airlines) additional charging days may soon be over when the Consumer Rights Directive is implemented which seeks to limit the amount of any surcharge to the cost to the trader.
Atol reform consultation ends today
by Katherine Leppard, September 15th, 2011
As the Atol reform consultation comes to a close, the responses from the travel industry are flooding in and sparking debate.
It is fair to say that it is agreed that reform of the Atol scheme is necessary because the current system does not provide adequate financial protection to consumers and this has been demonstrated in the recent collapses of travel companies such as Goldtrail and the latest being Holidays 4UK Limited.
The Department of Transport produced some draft regulations which were put forward for consultation in February 2011. This consultation ends today.
The main issues for debate that have come to light are, the timetable for implementation and whether airlines and business travel should be specifically excluded from the regulations.
Enough time for travel companies to comply?
ABTA raises a serious concern in relation to the government’s timetable to bring in the reforms in that the industry is going to struggle to put in place all the practical elements that come about from the reforms such as changes to systems and documentation. This represents concerns echoed across the industry and provides added pressure to the industry particularly in these times of economic downturn. There should at least be a phased introduction to allow travel companies to make the necessary arrangements and take appropriate advice.
Business travel to be specifically excluded?
The Dft has sought to exclude business travel by providing an exemption for credit sales but this will not exclude all business travel. ABTA have proposed to specifically exclude sales to limited companies as a measure to exclude business travel. This will assist but those companies selling only business travel will have to be careful to ensure that they do not fall within the Atol scheme.
Airlines to be specifically excluded?
ABTA supports the proposals from the DfT but calls them the ‘first step’ towards improving financial protection for consumers. The second step being the inclusion of airlines.
In contrast to ABTA’s response, the Board of Airline Representatives (BAR UK) is highly critical of the draft regulations. Amongst various criticisms made, they call for the regulations to be re-written to specifically exclude airlines.
The DfT maintain that in order to include the airlines in any Atol regulations, primary legislation is required. This essentially means that a Bill must be passed through parliament whereas the current draft regulations can be made under the powers conferred by the Civil Aviation Act. If this is correct it would mean that even if the regulations could be interpreted to apply to airlines, they would not be legally enforceable.
In a statement made to Travel Weekly yesterday the DfT confirmed that primary legislation will be required to bring in airlines. Primary legislation is planned in the form of the Airport Economic Regulations Bill and the parliamentary process is due to being in the next parliamentary session - (early 2012).
What’s next?
It is now down to the DfT to take on board all these comments and to consider how they may best proceed.
It is fairly possible that this will result in a delay to the reforms. The Airport Economic Regulations Bill may even catch them up which may prevent the need to amend the regulations to exclude airlines.
TIING! Discuss travel industry news and meet other industry professionals.
by Katherine Leppard, July 28th, 2011
TIING is a Linkedin networking and information exchange group for directors, owners and senior managers of tour operators, travel agencies and their professional suppliers located in the South East.
The purpose of the group is to share and discuss industry information and developments, share expertise and to provide networking opportunities for its members.
In the current membership there is a diverse group of directors, owners and senior managers in the travel profession including tour operators, agents, lawyers, social media, PR, insurers, recruitment regulatory.
Join the discussions and receive invites to future get togethers at http://www.linkedin.com/groups?gid=3826591&trk=hb_side_g
Are the CAA going too far by threatening to refuse claims?
by Katherine Leppard, June 28th, 2011
TTG Digital report from the Aito conference that the CAA say they may refuse claims where customers have not
received the correct documentation from their agents. Read the full article here.
Although this is strictly a requirement of the Atol protection scheme, this suggested approach by the CAA would leave the consumer to claim against the agent which appears to be contrary to the purpose of the Atol scheme which is to protect consumers. It also means that agents may not only have to pay for their Atol licence but also compensation where they cannot prove that an Atol receipt was provided to the consumer.
Agents can avoid the risk of the CAA refusing claims by ensuring that they have a system in place for checking and recording that customers are receiving an Atol receipt where required.
The CAA have recognised the need to produce standardised documents for agents to issue in respect of the Atol receipts which aims to make the process simpler for agents and provide more certainty and clarity to consumers.
Although the CAA can legally refuse claims where the required documentation has not been issued, the threat to refuse claims may seem more reasonable when there are standardised documents for the trade to utilise to assist them to satisfy the requirements under the Atol scheme.
For the time being, it is important for agents to ensure that they have the correct contractual documentation in place so the CAA cannot refuse the claims. If you are unsure whether you have the necessary documents please feel free to contact one of our travel law specialists for more information.
Travel tweeters meet and tweet!
by Katherine Leppard, March 28th, 2011
Tweeters in travel recently met up in London at Doubletree by Hilton for a #travtweetup. The event was organised by Lewis Shields (@lewisshields) of Flagship Consulting Ltd and Travel Trade Gazette (@ttglive).
A live feed for #travtweetup was put up on a big screen so tweeters at the event could see their tweets live at the event and those not able to attend the event could join in remotely.
The event was also a chance to learn more about TTG Virtual Cruise from the @ttglive crew. TTG Virtual Cruise takes place live online on 29 March 2011. Find out more here http://cruise.ttgvirtual.com/home
Proving that travel tweeters are real people – @mwb_travel (Katherine Leppard), @lewissheilds, @DanielPearce, @KCKiwiGirl, @dcmonk.
There will be more events like this so check #travtweetup for upcoming events.
Follow us @mwb_travel for travel law tweets and travel chat.
Ask the Expert
by Katherine Leppard, February 24th, 2011
I am a small travel agent providing holidays on behalf of tour operators and also directly to consumers. How do the ATOL (Air Travel Organisers’ Licencing) reforms affect me?
In February 2011 the government announced, through a statement made by the Aviation minister, Theresa Villiers, that it will complete the largest overhaul of the ATOL scheme for more than a decade.
This regulatory reform is likely to affect all travel agents and tour operators and may cause some travel agents who are not currently caught by the scheme to be regulated.
The main change to the ATOL scheme is the proposed creation of a new category of “flight plus” holidays which will fall within the ATOL scheme. Those selling holidays including a flight where the component parts are bought within a specified short time period will need to hold an ATOL licence. This in intended to extend the financial protection provided to consumers to those holidays which look like a package holiday but fall outside of the existing legal definition, for example those holidays which are dynamically packaged.
The government has not provided details on how the new “flight plus” scheme will be priced. It will be important for the government to ensure that businesses can sustain the additional cost of the scheme and that any resulting increase in the price of these holidays does not encourage consumers to prefer other unprotected options.
The other government proposals are likely to affect all those who currently hold an ATOL licence and those who will require a licence as a result of the proposed flight plus scheme. These include ensuring that the consumer is not misled about the level of protection and standardising information provided to consumers.
The ATOL reforms are still to be finalised and the current ATOL scheme will remain in place until the changes come into effect. This means that there is nothing that you need to do at this stage other than be aware that changes are on the way and to keep checking for any further announcements.
If you have any questions about the proposed reforms please contact me on kleppard@mayowynnebaxter.co.uk
Are travel companies liable for excursions?
by Katherine Leppard, January 27th, 2011
The case of Moore v Hotelplan Ltd (t/a Inghams Travel) reinforced the need for travel companies to make it clear to their customers who is legally liable in the event of an accident whilst on an excursion. However, some tour operators have not yet reviewed their terms and conditions in light of this case.
Ms Moore purchased a skidoo excursion in resort and sustained serious injuries whist on the excursion. The court found that the general terms and conditions of the tour operator were implied into the contract to provide the skidoo excursion meaning that the Hotelplan’s liability under the Package Travel Regulations (in particular regulation 15) applied to the skiddo excursion.
Lee Hills of Mayo Wynne Baxter commented “Tour Operators need to review their terms and conditions in light of this case and if necessary amend them to exclude liability for excursions sold in resort”
Ms Moore had been given a welcome pack by an Inghams representative in which the ‘Skidoo Sensation’ was advertised as an excursion that Inghams could organise. The excursion was run by a local company entirely separate to Inghams.
Ms Moore purchased a skidoo excursion from the Inghams representative who made the arrangements for the excursion. During the excursion Ms Moore lost control of the skidoo and collided with a parked car sustaining multiple serious injuries.
Ms Moore claimed Inghams was responsible for the excursion and that it formed part of her package holiday as defined by the Package Travel Regulations. Inghams denied that the skidoo trip has been arranged as part of the skiing holiday but that Inghams acted as an agent for the excursion provider.
The judge found in favour of Ms Moore. He said that the arrangements made between Ms Moore and the Inghams representative amounted to a contract for the supply of the skidoo excursion and it formed part of the package holiday meaning that regulation 15 would apply.
If tour operators intend to sell excursions as agents, which results in excluding their liability, it is essential that they make it clear to customers that they are acting as an agent. This can be done by clearly stating this on the brochure, training staff to advise customers that the excursion is being run by a local provider and using effective terms and conditions to specifically exclude their involvement in the supplying of excursions in resort from the holiday contract.
Mayo Wynne Baxter offer a fixed price menu for commercial travel services including amending terms and conditions. Click for more information on our specialist travel law services.