A Court of Appeal ruling against online agency Qwerty Travel has once again highlighted the potential difficulties of dynamic packaging.
The case followed an injury to holidaymaker Sean Titshall, who booked a last-minute trip to Corfu with Qwerty Travel in 2006 after spotting a deal on Teletext.
Titshall was injured when a sliding glass door in his hotel shattered, in circumstances that are contested. He sought to bring a case for negligence against Qwerty and this was challenged by its product liability insurer which believed the agent did not sell a package.
Agents are not normally liable for injury to clients. However, travel organisers – such as tour operators – are responsible under the Package Travel Regulations. So Titshall’s lawyers first had to prove Qwerty sold a package, and that is what the case was about.
A District Court ruled last February that Qwerty did not sell a package, finding Titshall had bought component parts of a holiday – First Choice flights and accommodation from Hotels4U.com – for a single price.
However, the Court of Appeal overturned that on December 15, ruling Qwerty did sell a package.
Its ruling does not affect the Flight-Plus position, since it involves a personal injury claim not financial protection. But it is a reminder that with or without Flight-Plus, agents may be pursued for personal injury if they don’t get their paperwork right. It led a leading lawyer to advise agents to break down service charges for component sales.
Lack of documents
The case was complicated by the fact there was little evidence of the transaction. The booking was made on the phone a day before departure. There were no documents and no invoice, just a ‘customer statement’ produced by Qwerty more than a year later.
This statement identified separate ‘transaction’ costs for the flights and accommodation, plus three ‘service fee’ supplements of varying amounts, with no indication what they were for. The relevant credit card statement showed a single payment.
Was it sold as a package?
Lord Justice Tomlinson of the Appeal Court found the components were not sold separately on two grounds, which is where confusion arises.
The judge’s two key findings were:
— “No explicit suggestion was made that either the flights or accommodation were available for separate purchase.” Tomlinson suggested the fact it was a last-minute booking was a major factor.
— “The service costs…supply a clear unifying feature connecting the provision of one service with provision of the other. The service costs…must have been presented as in part the price for putting together the package.”
The court concluded the transaction could have developed into a sale of separate services, but did not. “Qwerty offered a package that had component parts…but those were presented for sale as a whole for an inclusive price.”
That made Qwerty “liable to Mr Titshall for the proper performance of the obligations under the contract”.
It does not mean Qwerty is liable for the injuries to Titshall, merely that a case for liability can proceed.
Reaction to the ruling
In the opinion of Stephen Mason, senior partner at travel law specialist Travlaw: “It’s a very confusing decision. The Court of Appeal gave two major reasons – the service charges and the fact that it was a Sunday night booking for a Monday departure.
“The judge has thrown in both factors. He seems to think it important it was a last-minute booking as the consumer was unlikely to be interested in a breakdown of the price.
“If all the judge is saying is there was no breakdown of the price, fine. But the service charge was [also] relevant. If the booking had been a month before departure would that have made it a package?”
It’s hard to understand how the factors inter-relate.
Mason added: “We can argue that if the price is not broken down it is a package. But if the service charge is relevant, what if the price is broken down?”
“I would advise agents to break down their service charges. It will be in the interests of claimants to argue something is a package even if it is Flight-Plus.” He added: “Flight-Plus is about reclaiming money if a company goes bust. But things go wrong on holiday much more commonly than holiday companies go bust.”