"Documentation will wrap up packages" comment by Laura Harcombe
Read More
"Buyers rang to say they don't want my house" comment by Michael White
Read More
Travel Trade Gazette - Litigation - July 2008
Despite the judgment in the Abta/CAA judicial review, we all know that determining what is a 'package' can be very difficult in practice. The guidance note for travel organisersis intended to help and includes 'evidential pointers' the court will consider in deciding whether particular travel arrangements amount to a package. One of these is customer perception.
The Department for Business Enterprise and Regulatory Reform, which issued the guidance, states that whether the customer thinks they are buying two or more separate services rather than a combination of services may be a powerful indicator of whether the transaction is a package.
How you handle the other evidential pointers identified in the guidance is likely to have a strong effect on the customer's perception of what they are buying. This is worrying given the challenges the trade has faced in understanding what is a package.
According to the CAA, more than 100 businesses that may be organising packages for which an Atol is needed had not applied for one in May. So how can a customer be expected to know whether he has bought a package?
In Oczerklewicz v Late Search UK Ltd in May 2008, a county court judge held that the documentation provided by the travel agent to the customer was backed up by telephone conversations between them, after which the customer went to the agent's office to make the booking.
The agent made it clear the flight and accommodation were being booked through different suppliers and the customer had a choice whether to take them. The documentation showed the customer was told separate items were being sold at the same time. The agent was acting as agent in both substance and form and not selling a package. The customer had tried to argue the arrangements were a package, but her recollection and perception were at odds with the facts.
The judge accepted that a person looking forward to a holiday does not pay precise attention to the mechanisms of the booking. This customer's perception was at odds with the facts. This is an encouraging judgment in a judicial climate that is often customer-biased.
Providing a package has two major consequences for an organiser of packages – providing financial protection, and liability for the travel arrangements. Package Travel Regulation 15 says the tour operator is liable for all elements of the package holiday it organises or offers for sale, regardless of whether the organiser provides the elements itself, or they are provided by external suppliers. There are limited defences to a claim, but the burden is higher for an organiser than for an agent. An agent can exclude liability for acts or omissions of his principal or suppliers for the services provided by them.
Although customer perception is one of a number of evidential pointers when determining whether arrangements are a package, the message of this case is clear: proper documentation will help shape customer perception – and a judge's assessment – and so it needs to be right.
Comment by Laura Harcombe