A lawyer who acted in the Court of Appeal case between ABTA and the Civil Aviation Authority believes the ruling has not clarified if agents need ATOL cover when selling component-based holidays.
The confusion hinges on the definition of a package holiday in a market that has changed unrecognisably since the introduction of the Package Travel Regulations in December 1992.
The Court of Appeal judgment last November provides the current legal view and the Department for Trade and Industry is preparing guidance on ATOL-requirements for the trade on the basis of it.
Yet Robert Lawson of Quadrant Chambers, speaking at an ABTA travel law seminar this week, said: “The ruling reduced a package to the concept of a yeti.
“It can’t really be described until you see it. But when you see it, hopefully you will recognise it and act accordingly.”
However, while a clear legal definition of a package remains elusive, Lawson said the judgment did not present a barrier to agents selling component-based holidays.
The key is how agents make the sale. “You must make clear each service is sold on a stand-alone basis, not contingent on the take-up of any other service,” said Lawson.
He advised agents to inform customers such sales are outside the ATOL regulations and may even be outside the Package Travel Regulations – meaning they waive financial protection in the event of a failure and liability in the event of an accident.
Lawson pointed out the Court of Appeal gave weight to whether a customer believes they are buying an inclusive package.
He said: “The customer can have no doubt if you are clear at the moment they buy the holiday.”