This article considers the impact of Brexit on UK retail agents selling non-UK Tour Operator packages.
It’s always been the case that under Part 6 ‘General Provisions’ of the Package Travel and Linked Travel Arrangements Regulations 2018 (“PTRs”) a retail agent established in the UK who sells packages combined by an organiser established outside the EEA will itself be subject to the responsibilities imposed on the organiser in Parts 4 and 5 of the PTRs, (see below) unless, the retail agent provides evidence that the organiser complies with those Parts.
However, following Brexit the PTRs have been amended via the Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018 and the key amendment to Part 6 is that it extends this requirement from organisers established outside the EEA to those established outside the UK.
What are the obligations under Parts 4 and 5 of the PTRs?
Part 4 – Performance of the Package.
Under Part 4, organisers are liable to the traveller for the performance of the package regardless of whether the components making up the package are performed by the organiser or by other third party providers and obliges them to:
- remedy any lack of conformity without undue delay;
- refund, where remedying the lack of conformity is not possible or where a traveller exercises their right to cancel in light of unavoidable and extraordinary circumstances;
- offer alternatives where they are unable to offer a significant proportion of the travel services; and
- bear the cost of necessary accommodation in unavoidable and extraordinary circumstances
Part 5 – Insolvency Protection for Packages
Quite simply, the organiser must provide effective cover in the event that it becomes insolvent to enable repatriation of customers who have already commenced their trip, allow them to continue their trip as booked or for those who have not yet departed, provide full reimbursement of the package price. The protection must be by way of one of the approved methods set out in the PTRs, namely bond, insurance, trust account, with an authorised institution.
What does this mean for UK retail agents selling non-UK organiser’s packages?
How do UK retail agents ‘prove’ compliance, and note that compliance is required to be with the UK requirements.
Unfortunately there’s no real guidance on what a retail agent needs to do to evidence compliance but we know that those organisers based in the EU should be complying with these (or similar) obligations given that the PTRs derive from the EU legislation, The Package Travel Directive. However, it’s worth mentioning that whilst the PTD, PTRs and other EU member states’ own version of the PTRs are presently aligned other than for perhaps a few nuances, there may be greater divergences down the line where amendments are made to the PTD but not reflected in changes to our own UK legislation (and vice-versa).
For organisers based outside the EU and the UK, the situation may be slightly more complex but not necessarily different as it remains the same pre and post Brexit. Such organisers who are not, under their local laws, subject to responsibilities equivalent to those set out in Parts 4 and 5 of the PTRs may be loath to take on these additional burdens, particularly where the UK market only makes up a small proportion of their overall sales.
In terms of providing proof of compliance on the part of the organiser, UK retail agents can look at:
- Making compliance with the PTRs and more specifically, Parts 4 and 5, a specific contractual obligation upon the organiser within the agency agreement;
- Obtaining documentation from the organiser that evidences the insolvency protection in place and that it is approved by the relevant UK authority;
- Reviewing the organiser’s own customer booking terms and conditions to check for compliance with the PTRs and how that organiser ‘pitches’ themselves in terms of responsibility towards the customer; and
- Having clear, initial conservations with the organiser regarding the bearing of responsibility, before entering into any agreement.
It’s likely that the contract between the retail agent and the organiser is going to be key here in ensuring that whatever is agreed between the parties is accurately reflected in that agency agreement and there are no grey areas or uncertainty with regards to what each party is obligated to do. It is also recommended that the contract should be governed by English Law where the organiser is outside of the UK and where that cannot be agreed, the retail agent will need to be mindful of the risk of enforcing the contractual provisions against a non-UK principal, in a foreign jurisdiction.
Consequences for UK retail agents
Failure to obtain evidence of compliance by the non-UK organiser could see UK retail agents faced with having to:
- Incur extra expense in arranging insolvency protection;
- Amend their Booking Terms and Conditions to incorporate and reflect the PTR provisions;
- Review and amend existing procedures to ensure compliance in respect to the obligations regarding performance of the package;
- Suffer loss where refunds to customers are due under Part 4 of the PTRs; and/or
- Deal with unhappy customers.
Certainly, UK retail agents will need to be mindful going forward of where the operators they choose to work with are based and whether there is a risk of those obligations under Parts 4 and 5 of the PTRs falling to the retailer.
Finally, it is worth mentioning that Travlaw is the founding member of the International Travel Law Network (“ITLN”) that brings together lawyers within Europe with a knowledge of travel law. As such, please reach out if you need any assistance or support with non-UK issues and where we have a fellow ITLN member in that jurisdiction, we can put you in touch!
For help and advice on this topic, contact the author;
0113 258 0033