Travlaw LLP’s own Stephen Mason was speaking at the international ESHTE PTD conference on 10th & 11th October 2016 in which a stellar panel of European lawyers debated the issue of traveller protection in the event of insolvency and the paradigmatic case of LowCost Holidays (selling packages in the UK with insufficient protection in Mallorca).
At ESHTE, it was discussed that under the new PTD travellers will be fully protected in case the organiser becomes insolvent. “Member States in which organisers are established should ensure that they provide security for the refund of all payments made by or on behalf of travellers and, insofar as a package includes the carriage of passengers, for the traveller’s repatriation in the event of the organiser’s insolvency. However, it should be possible to offer travellers the continuation of the package. While retaining discretion as to the way in which insolvency protection is to be arranged, Member States should ensure that the protection is effective. Effectiveness implies that the protection should become available as soon as, as a consequence of the organiser’s liquidity problems, travel services are not being performed, will not be or will only partially be performed, or where service providers require travellers to pay for them. Member States should be able to require that organisers provide travellers with a certificate documenting a direct entitlement against the provider of the insolvency protection.”(see recital 39).
In addition to the Directive 90/314/EEC – the legal concept of package holidays that in the future will be much more comprehensive, integrating, for example, customised packages. The traveller will also be protected by the new category of linked travel arrangements.
Despite “Brexit” the UK government has announced it will adopt the rules of the new PTD. This coming together of leading lawyers, including ITLN’s Stephen Mason and Michael Wukoschitz, was a fantastic melting pot of knowledge and experience.
Stephen’s presentation, entitled “The new regulatory regime – the trading bonanza, or a disaster for Consumers in the making” addressed, among other things, the adverse consequences of the bankruptcy of LowCost Holidays. Also discussed were the possibility of companies opting for cheaper insurance systems in other countries (escaping the heavy burden when funding the UK ATOL scheme through a deposit of approximately one million euros in Spain), and whether they might be sucessful, or be inadequate in protecting consumers when faced with financial collapse.