There has been a lot of talk about travelling against FCDO advice during the pandemic over recent months. In this article, Nick Parkinson, Associate at Travlaw, looks at a few burning questions being posed by tour operators:
Can I operate package holidays to destinations where the FCDO advise against travel? If so, can I refuse refunds where customers do want to travel? Can I just get the customer to sign a ‘waiver’ to get around refunds? What other risks are involved, and what can I do to minimise those risks?
Can I operate against FCDO advice?
Yes, tour operators can operate package holidays to destinations where the FCDO advise against travel. FCDO advice is advisory, it would not be illegal or put you in breach of contract to do so (unless your T&C’s say otherwise). The assumption here, of course, is that you can still provide all of the services. If so, you are not forced (or ‘constrained’) to cancel the holiday, nor are you ‘prevented’ from doing so. However, there is plenty more to think about before ‘taking the plunge’ and deciding to operate against FCDO advice.
Can I refuse refunds where customers refuse to travel due to FCDO advice?
If it were put before a Judge, there are compelling arguments to suggest that a customer would be entitled to a full refund in this scenario. This is because customers have a right to cancel a package holiday (with a full refund) where there are extraordinary circumstances at the place of destination. There are three key difficulties that tour operators face trying to argue that FCDO advice does not amount to ‘extraordinary circumstances’.
- The EU Commission have issued guidance stating that government advice against travel would be a ‘strong indicator’ that extraordinary circumstances exist.
- Recital 31 of the Package Travel Directive gives an example that ‘extraordinary circumstances’ could include: the outbreak of a serious disease at the travel destination;
- The courts of England & Wales have (independent of the EU) long recognised that holiday contracts are not just about providing bare travel services. The purpose of a holiday is typically to relax and enjoy the experience. If a customer feels that they are unable to do so in light of FCDO advice, the case law indicates that they will be entitled to cancel with a full refund.
It is true that the EU Commission guidance is not binding, and that after the Brexit Transition period ends the UK can forge their own path from the EU courts. Perhaps the UK courts may feel that what is currently regarded as ‘well established case law’ is not ‘fit for purpose’ in the context of a pandemic. Anything is possible, but unless and until such changes materialise, there are difficult obstacles to overcome!
What If I get customers to sign a ‘waiver’ to agree to travel despite FCDO advice?
You can obtain a (preferably signed) waiver from customers. This will offer you some protection against customers who contract covid-19 during the holiday. However, it will not offer any legal protection where customers later ‘change their mind’ and seek a cancellation and refund due to FCDO advice against travel.
The waiver should also draw attention to the fact that the customers own travel insurance could be invalidated.
So what protection will a ‘signed waiver’ offer?
If customers contract covid-19 during the holiday, they could argue that you have ‘breached your duty of care’ by allowing them to travel to that ‘high risk’ destination. Obtaining this form rules out that argument, leaving the customer with a much more difficult task of trying to prove that something you did/didn’t do during the holiday caused their illness.
What about customers that change their mind about FCDO advice and ask for a refund?
The customer could be asked to sign a ‘waiver’ to accept that, if they change their mind about travelling despite FCDO advice, they will not be entitled to a refund. However, that waiver is unlikely to stand up in court because:
- Customers have a right to cancel their holiday with a full refund where there are ‘extraordinary circumstances at the place of destination’ under Reg 12(7) of the Package Travel Regulations;
- Any agreement that directly or indirectly tries to ‘waive’ or ‘restrict’ that right is NOT binding. This is specifically prohibited by Reg 30 of the Package Travel Regulations.
Put simply, either there are extraordinary circumstances at the place of destination at the time of travel or there are not. If there are, the customer is entitled to cancel with a full refund despite any term or condition in the T&C’s or any ‘waiver’ that they have signed. If there are not (for those that take the view that FCDO advice does not amount to ‘extraordinary circumstances’) then there is no need to obtain a signed waiver to start with!
Of course, that doesn’t mean that the customer can cancel whenever they want. Where customers cancel weeks or months before departure, tour operators still have a good argument to say that the cancellation was premature (before the right to cancel under Reg 12(7) had materialised) and therefore cancellation charges still apply.
That said, some tour operators may take the view that, in practice, even if it is not legally binding most customers will honour any agreement where they have signed a clear ‘waiver’ against any right to cancel with a full refund due to FCDO advice. For that reason, regulators such as the CMA may take an interest.
Does it make a difference if FCDO advice was in place when the waiver is signed?
Probably not. Either there are extraordinary circumstances at the place of destination at the time of travel or there are not. If there are, the customer is entitled to cancel with a full refund. It makes no difference whether or not the FCDO advice against travel was already in place when the form was signed.
There are some technical arguments to argue otherwise, which are beyond the scope of this article, but in my view the likely conclusion remains the same.
What other risks are involved?
The main risk to flag up is that operating holidays against FCDO advice could invalidate your public liability insurance. Would it only be invalid in relation to covid-19 related claims? Or would it be completely withdrawn even if someone makes a claim for slip/trip accident? The answer lies in the T&C’s of your insurance policy.
Another risk, and one that has been highly publicised for certain ABTA members, is that you could be in breach of the membership rules for any trade association that you are part of.
In short, yes you can operate holidays against FCDO advice. There are risks involved and so you need to be fully aware of those risks before taking a commercial view on whether it is worthwhile to proceed. However, when it comes to refunds for customers that do not want to travel due to FCDO advice, the customers are currently in a strong position – even if you get them to sign a form to waive any rights to a refund!
Get in Touch
The pandemic has brought a lot of difficult legal issues to the fore. If you are in need of assistance getting to grips with any of the issues discussed in this article please do not hesitate to get in touch by contacting the author of this article or by contacting the team on 0113 258 0033 or at firstname.lastname@example.org.
This article was originally published on: 22 October 2020