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Has the ‘Flicker of Hope’ test been extinguished?

The ‘flicker of hope’ test stood the test of time between 2004 and 2023.  However, it may have been extinguished by the recent appeal to the High Court in the case of Sherman v Readers’ Offers Limited writes Travlaw’s newest Partner, Nick Parkinson. In this article, we will explain in more detail, and look at what that means for the travel industry.

What Was The Flicker of Hope Test?

The ‘flicker of hope’ test evolved when the courts were asked to deal with disputes under Regulation 12 of the old 1992 Package Travel Regulations.  Reg 12 provides travellers an opportunity to cancel a package holiday, and receive a full refund, but only if the package organiser is forced to make significant changes to the holiday.

The question therefore arose as to when exactly is a package organiser forced to make changes?  For example, it might not be safe for UK citizens to travel to Moscow today, but what if the trip is not due to depart until March 2024?  This is where the ‘flicker of hope’ test comes in.

The ‘flicker of hope’ test was first applied in Lambert v Travelsphere in 2004, and was followed in the case of Clark & Others later that year. In these cases, the courts declared that a package organiser is not obliged to cancel a package holiday (and issue a full refund) so long as there is still a ‘flicker of hope’ that the holiday can proceed. 

The Significance of The Test

The ‘flicker of hope’ test has taken centre stage in the travel industry ever since March 2020.  This is because:

  • At any given point in time during the COVID-19 pandemic, it was unclear whether the situation at any given holiday destination would last for weeks, months or years
  • Despite that uncertainty, many travellers sought to cancel their holiday weeks or months before their scheduled departure date.

The response from package organisers?  Simple, package organisers are not obliged to cancel packages weeks or months before the start date.  Further, there is no entitlement for travellers to cancel (with a full refund) for so long as there is a ‘flicker of hope’ that the trip can proceed without being significantly affected. 

The ‘flicker of hope’ test therefore set a ‘high bar’ for travellers to meet in order to receive a full refund when cancelling their booking weeks or months before departure.  The solution for travellers?  Resist cancelling the booking until ‘a few days’ or so before departure, or ‘cancel now’ and claim on their travel insurance instead.

Who Killed The ‘Flicker of Hope’ Test?

Surprisingly, it has nothing to do with a claim brought in relation to the COVID-19 pandemic, or even a claim brought under the 2018 Package Travel Regulations.  The first shot was fired in the case of Sherman v Readers’ Offers Limited (Winchester County Court, May 2022).   In that case, the Judge dismissed the ‘flicker of hope’ test and suggested that travellers would be entitled to a full refund once there is no longer a reasonable possibility that the package can proceed without any significant changes being made.

The Judgment in Sherman in May 2022 does not take priority over the earlier decisions in Lambert and Clark, as they are all County Court decisions.  However, the Sherman case is subject to an ongoing appeal, and the most recent Judgment was given by the High Court in March 2023.  The Appeal Judge in the High Court said that the previous Judge was right to ‘reject the flicker of hope test’ and supported the use of ‘the reasonable possibility’ test instead.  Unlike the previous decision, a Judgment from the High Court is legally binding on the lower courts in England & Wales!

Has The ’Flicker of Hope’ Test Definitely Been Extinguished?

Probably, but not officially!  In the original decision in Sherman, although the Judge discussed the ‘flicker of hope test’, it was not necessary for the Judge to make a decision on that particular issue.  In fact, the Appeal Judge made that clear in her Judgment when considering the appeal.  It is therefore entirely open to argue that there is still no binding decision on this issue, that these are just ‘obiter comments’ – where Judges say things ‘in passing’ but do not form part of their actual Judgment. That said, in practice, the comments of a High Court Judge are likely to be highly influential on the lower courts!

What Does This Mean For The Travel Industry?

At first blush, the appeal decision in Sherman may be seen as a blow for the travel industry, as many will say that it is no longer ‘good law’ to argue the ‘flicker of hope’ test.  In reality, however, will it make that much difference?  Is the ‘reasonable possibility’ test a distinction without a difference?  At best, it seems that the old test has been diluted slightly.  Travellers will still need to show that there is no longer a ‘reasonable possibility’ that their trip can proceed without being significantly affected, and that is going to be extremely difficult to prove when travellers are cancelling weeks, or months, before the departure date.  The new test therefore still leaves a ‘high bar’ for travellers to meet when seeking refunds. 

In short?  In this writer’s opinion, ‘same same, only different’!  In fact, perhaps the travel industry should embrace the new ‘reasonable possibility’ test.  Travel insurers have paid out millions to customers during the pandemic, and continue to redirect these to package organisers in the form of ‘subrogated claims’.  Package organisers typically defend such claims on the basis that they have no obligation to issue full refunds when travellers ‘cancel too soon’.  The High Court Judgment in Sherman supports that defence, albeit in a slightly diluted form than the old ‘flicker of hope’ test.

If you have any questions or require any legal advice on Flicker of Hope, please get in touch;

nick@travlaw.co.uk

or call;

0113 258 0033

This article was originally published on: 5 April 2023

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