ABTA has hailed this week’s decision to quash Civil Aviation Authority guidance on ATOL regulations a victory for travel agents – but operators have warned it signals the end for consumer protection.
The outcome of a judicial review brought against the CAA by ABTA clarified a holiday made up of component parts is not considered by law to be a package and has lifted the threat of breaking ATOL rules and a prison sentence for agents who dynamically package.
ABTA head of legal affairs Simon Bunce said: “This is the clarity the industry was looking for. The law was in a confused state.”
However, the ruling has sparked fury among tour operators, which have vowed to bypass ATOL rules and by doing so destroy consumer protection.
Association of Independent Tour Operators council member Noel Josephides said members should avoid ATOL regulations by selling tailor-made product.
“If this is as clear cut a judgement as ABTA says, it has done a great disservice to its operator members,” he said.
“We will be instructing our members to use every trick in the book to behave like travel agents. It defies common sense that someone can put together a package and not be responsible for it.”
Cosmos managing director Terry Williamson said: “I don’t think it’s going to be good for consumers. It is a retrograde step for the industry. Agents are going to have a difficult time explaining what’s protected and what’s not.”
Bonding expert and White Hart Associates partner Chris Photi said CAA regulations were outdated. “I expect a lot of larger operators that bond with the CAA to look at avoidance.
“That’s why a lot of operators are taking low-cost flights and linking them with other arrangements. They have been getting around ATOL arrangements for years.”
But Suffolk-based Johnston Stevens Travel general manager Peter Cansick hoped the ruling would lead to a fairer financial protection system. “There has been so much uncertainty and controversy about what we can and can’t do,” he said.
No-one from the CAA was at Monday’s hearing in the High Court. Deputy director of consumer protection group David Moesli said: “It is a very long judgement and we’re still studying it.”
There have been renewed calls for the Government to consider legislation to protect the increasing number of holidaymakers who are travelling aboard without any form of financial protection.
The CAA has not indicated if it will appeal against the judgement of Mr Justice Goldring, who declined to give his permission for an appeal.
The judicial review is estimated to have cost both ABTA and the CAA £100,000 in legal fees which, if the CAA does not appeal or loses an appeal, it will be liable to pay. Mr Justice Goldring gave the CAA an extended period of 28 days to decide if it will request permission to appeal.