Legal Quiz

Storyline One:

In a Fix Tours is an incoming tour operator, specialising in hotel bookings in Cornwall and Devon for Danish students.

They have made a booking for ten 19-year-old Danish women for seven days in April 2000. The women are intending to start as au pairs in September 2000 in the Bude area and the trip is a form of acclimatisation trip which has been arranged by a Danish tour operator, Helgas Girls

However, the offers of employment as au pairs fall through in February 2000 with the result they cancel the holiday booking on February 17 2000.

In A Fix Tours then cancels with the hotel to be told that there are cancellation charges of 70%.

In A Fix Tours was aware at the time of booking that there were various conditions attached to the hotels confirmation but had paid no attention to those.

It now does so, and the 70% cancellation charges are in line with the conditions on the back of the confirmation.

In A Fix Tours turns to the Danish tour operator, Helgas Girls, but the only written arrangement with it is a letter which confirms the actual booking and the rate, saying nothing about cancellation charges.

Is In A Fix Tours liable to pay the hotels cancellation charges?

Can In A Fix Tours recover any money from Helgas Girls?

Will English or Danish law apply to the position between In A Fix Tours and Helgas Girls?

Pierre Tours is an incoming tour operator specialising in hotel bookings for French tourists.

In November 1999, it made a booking for a French couple for six nights’ accommodation at the Hotel Fawlty on January 5 2000. The booking was made through a Paris travel company. The couple, Mr and Mrs Grenouille, book into the hotel without any problems at approximately 4pm.

On the second day of their holiday, they return to their hotel room, having been out all day, at about 6pm.

They discover that Mrs Grenouilles jewellery, which she had left on the dressing table, has gone. The hotel had no safe facilities. The police are called but are unable to locate the perpetrators of the crime despite investigations over the next few weeks.

Despite their immense sense of loss, the jewellery included antique jewellery which had belonged to Mrs Grenouilles great great grandmother, they continue with their holiday.

Since the police investigations have proved fruitless Mr and Mrs Grenouille write to both Pierre Tours and the Hotel Fawlty claiming compensation for £25,000. This is the sterling equivalent of the French franc certificates of value of the stolen jewellery. Both deny liability.

Is Pierre Tours liable to Mr and Mrs Grenouille?

Is Hotel Fawlty liable to Mr and Mrs Grenouille?

Would the hotel’s position be any different if it had had safe facilities either in the room and/or in reception?

The Hotel Fawlty is the largest private hotel in Cornwall. It has 450 rooms, and is in ideal location near to Rock.

Its most significant competitor is a chain of small family run hotels (the Pastie chain), each of which has no more than 50 rooms per hotel but with 10 hotels in the chain. Each hotel is within a 20 mile-radius of Padstow. All other hotels in that area of Cornwall have no more than 20 rooms so the Hotel Fawlty and the Pastie chain are the only hotels suitable for large groups wishing to stay together.

The hotels attract particular interest from Scandinavian wind surfing associations.

For years, the Hotel Fawlty and the Pastie chain has been in fierce competition over prices. They have strived to acquire the Scandinavian wind surfing business virtually irrespective of the cost.

In February 1999, at the convention of a well known organisation, the managing directors of the Hotel Fawlty and the Pastie chain meet.

Over a convivial drink or two, they discuss prices and continue these discussions upon their return to their offices. The upshot is that they reach an oral agreement about the minimum price they will charge their Scandinavian customers.

The minimum price represents a very substantial increase on the previous years prices.

So far, as profits are concerned, this arrangements works very well throughout the rest of 1999 and the managing directors repeat the discussions throughout 2000. To their chagrin they suddenly discover that they are being investigated by the Office of Fair Trading.

Question 1: Do the managing directors of Hotel Fawlty and the Pastie Chain have to be concerned about an OFT investigation?

Question 2: Does the Competition Act 1998 prohibit all discussions between competitors?

Question 3: Does the 1998 Competition Act have any impact for a trade association?