This article will be of interest to travel businesses and travel law practitioners everywhere, but in particular to school travel operators and their advisors.
Early this year, Cledford Primary School successfully claimed a full refund in relation to a holiday which was cancelled during the pandemic. There has been much talk in academic circles and otherwise that this decision is a ‘game changer’. Travlaw Partner, Nick Parkinson, tells us what this decision means for the travel industry…
What Happened in Cledford?
As always, the timings here are important. The school had a holiday due to take place in March 2021; however they decided to cancel the booking on 29th September 2020. The school argued that that they were entitled to a full refund under Reg 12(7) of the Package Travel Regulations, even though they cancelled almost 6 months before the trip was due to depart. The dispute got all the way to trial where, to the surprise of many, the Judge agreed!
It could be said that this decision is controversial for two reasons…
First Reason: Premature Cancellation
The travel industry has long understood Reg 12(7) to apply as follows:
- Package organisers will be liable for full refunds when it becomes clear that the holiday will be significantly affected
- In most cases, this means the customer must wait until the departure date is reasonably imminent before cancelling
- Where customers cancel weeks or months in advance of departure, package organisers will not be liable. In those cases, travel insurers should take care of refunds. After all, that is what they are there for!
Allowing a full refund when a customer cancels 6 months before departure therefore presents a significant shift in liability from travel insurers to package organisers!
Second Reason: Educational Activities
The travel industry has long understood that the Package Travel Regulations do not apply where accommodation is sold together with educational activities. This is because ‘educational activities’ are not usually considered to be a ‘travel service’. This subject was discussed in some detail in one of our previous articles here.
If the analysis above is incorrect, this has huge implications for hundreds of ‘educational activity centres’ – insolvency protection, customer obligations, liability for accidents… etc!
Will this case open the floodgates?
Possibly, but so far the floor is damp rather than saturated! During the COVID-19 pandemic, millions of package holidays were cancelled. Travel insurers say that, when customers cancelled their holidays during the pandemic, in most cases package organisers should have issued a full refund under Reg 12(7). Some claims have already been issued at court, but travel insurers are now threatening to issue court claims against holiday companies en masse.
So is Cledford a ‘Game Changer’?
No. Travel insurers have won a battle, not a war. This decision is just one piece of a much bigger jigsaw, and travel insurers should be reminded that:
- Cledford is a County Court Judgment from a Deputy District Judge. It is not binding on other courts,
- It is not consistent with other court cases, where Judges have rejected claims in similar circumstances,
- It is not consistent with the High Court authority in the case of Sherman, which was discussed in a previous article here,
- Each case has to be considered on its own facts, and the evidence before the Judge at the hearing will vary from case to case (e.g. any government plans to review lockdown restrictions before the departure date of the trip),
- In Cledford, the travel company made a fatal error by stating that the booking was ‘a package for the purpose of the Package Travel Regulations’.
- The Judge was not presented with all of the legal arguments as to whether the Regulations apply to ‘educational activity centres’, or when refunds apply under Reg 12(7).
Travel insurers are no doubt well aware of the above, which probably explains why claims have not yet been issued en-masse.
The Bottom Line?
The Cledford decision is not conclusive of anything, but is an unwelcome thorn in the side of the travel industry. Although it is not binding, and controversial, nevertheless it provides consumers and travel insurers with a ‘new weapon’ – which is now being used to threaten proceedings against package organisers and ‘educational activity centres’.
Once again, the travel industry will need to wait for decisions from the higher courts before clarity can be given as to where they stand in relation to refunds under Reg 12(7), and whether ‘educational services’ amount to a ‘travel service’.
Can We Help?
Have you received any claims for a full refund brought under the Package Travel Regulations? Are you an ‘educational activity centre’ wondering whether your business is caught by the Regulations? If so, we can help.
Feel free to get in touch with the author of this article:
or call us on
0113 258 0033
This article was originally published on: 31 July 2023