Some of the most pressing issues facing the travel industry were debated by experts at the annual event hosted by the specialist legal firm. Ian Taylor reports
Personal injury: Court of Appeal clarifies law in on the beach case
A recent Court of Appeal ruling “squashed flat” an attempt to argue local standards should not apply in a case for compensation brought by a holidaymaker injured abroad.
The judgment in late November in the case of Lougheed v On The Beach clarified the law on a number of counts, according to Travlaw senior partner Stephen Mason.
The case concerned a Mrs Lougheed, who slipped and was injured on steps at a hotel in Lloret de Mar in August 2009. Mrs Lougheed won a claim for negligence against On The Beach in 2013. The travel firm successfully appealed.
Mason told the Travlaw event in London: “The case saw an attempt to argue that it is not local [safety] standards that should count [in a destination]. The Court of Appeal squashed that flat.”
It also closed a loophole suggested by another ruling that “local standards may not be the end of the matter” in deciding whether negligence has contributed to an injury. The Appeal Court agreed, “but only if both sides agree that these [local standards] are inadequate. It added that an Englishman does not travel abroad in a cocoon.”
The ruling provided clarification on a third issue, referring to the 1976 case of Ward v Tesco Stores which established, in Mason’s words, “that it was for the defendant [in cases of personal injury] to prove they were not negligent rather than for the claimant to prove they were”.
“In Lougheed, that was restricted to an area where accidents were deemed ‘likely to happen’ [and] in the area where Mrs Lougheed fell, there had never been an accident,” said Mason.
“The Court of Appeal said travellers should take out their own insurance rather than blame tour operators because all it does is put up the price of holidays. It was a remarkable decision,” he added.
Appeal Court: No breach of local standards
On The Beach appealed the judgment in the case brought by Mrs Lougheed, arguing the trial judge was wrong to find the hotelier in breach of local standards.
The Court of Appeal agreed. It noted: “It was an accident that could have occurred despite the use of proper care, as would have been the case if the stairs had become wet only very shortly before Mrs Lougheed negotiated them and before the wetness had come . . . to the attention of the hotel staff. There was no evidence here that slipping at this place was a known likely risk.”
Travelaw’s Stephen Mason noted this was “not the way in which courts have previously approached the question”.
Lord Justice Tomlinson of the Appeal Court also noted that findings of liability against tour operators “no doubt result in an increase in the cost of such holidays”.
On The Beach argued at the initial trial that it was not an organiser as defined by the Package Travel Regulations. But the court rejected that and On The Beach did not contest this on appeal.
Protection: CAA decides to retain Small Business Atols in amended form
The Civil Aviation Authority has confirmed it will retain the Small Business Atol (SBA) for small companies.
CAA head of Atol Andy Cohen told the audience at the Travlaw Big Tent event in London last week: “The SBA will stay.”
The CAA published plans to abolish the SBA and bring in financial monitoring for smaller Atol businesses last June, with figures showing the cost of failures among SBA holders outweighed payments to the Air Travel Trust. The changes were slated to begin from April. However, Travel Weekly reported early this year that the CAA would retain the SBA (Travel Weekly, January 2).
The proposals triggered the greatest number of responses the CAA has seen to a consultation. Cohen said: “We had 170 responses – the most we’ve ever had – and about 100 were from SBA holders. We looked at it long and hard and have decided the SBA will stay, but not in its current form.”
He told the Travlaw audience: “If you are genuinely a small business, you will be able to retain an SBA. However, we’ll be making sure genuine SBAs at the very least face a financial test based on solvency. Details on when and how will follow in due course.”
SBA holders are licensed to carry up to 500 Atol-protected passengers a year. There are about 950 SBA holders, about half the number of firms holding Atols.
Cohen declined to reveal the CAA’s plans on other aspects of Atol reform, including a proposal to introduce a ‘licensed practitioner’ scheme for accountants filing Atol reports. He said: “We’re looking at this closely and have not made up our minds.”
However, Travel Weekly understands the CAA will switch to an SBA scheme based on Atol revenue rather than number of bookings, with new financial criteria and monitoring. The authority will also delay reform until details of a revised Package Travel Directive are known.
The CAA will announce its decision on Atol reform next month.
Politics: Abta fears impact of election and EU referendum
Abta chief executive Mark Tanzer is concerned about the impact the general election could have on travel.
Tanzer told the Travlaw audience: “A general election saps consumer confidence in the short term.” He added: “A decisive result would help.”
There is growing apprehension in business at the prospect of a result which could mean a minority government and a second election – producing months of political uncertainty.
However, Kate Jennings, head of aviation policy implementation at the Department for Transport, denied such uncertainty would hold up regulatory reform. She pointed out: “The [current government] coalition formed quickly in 2010.
“There is consensus between Labour and Conservatives on some issues. For example, it makes sense to support the recommendations of the Airports Commission [and] we have a legal obligation on the Package Travel Directive.”CAA head of Atol Andy Cohen agreed, saying: “Unless Ukip [the UK Independence Party] is in power, I don’t see too big a difficulty [on the PTD].”
Tanzer also expressed concern about the prospect of a referendum on Britain’s EU membership.
“The EU is our biggest market and not to have a voice in shaping regulations is scary. A referendum is high‑risk,” he said.
Rights: Air travel compensation rules face reform
Ministers are aware of a boom in compensation claims by air passengers in the wake of recent legal rulings, a senior civil servant said.
At the same time, there are renewed prospects of Brussels revising EC Regulation 261 on Air Passenger Rights.
Kate Jennings, head of aviation policy implementation at the Department for Transport (DfT), said: “We see the aim as reducing the costs of the current [compensation] regime.” Jennings was responding to Travlaw senior partner Stephen Mason who declared some claims a scam “akin to whiplash claims”.
Mason said: “We see a vast number of claims, clearly based on Huzar v Jet2 but also on Dawson v Thomson Airways, and it’s causing pain to airlines.”
The rulings last June confirmed passengers could seek compensation for delays to flights up to six years ago, even when a delay was due to a technical problem that could compromise safety.
“Does this incentivise claim management companies? It’s an issue ministers are aware of,” said Jennings. But she added: “While there is a negotiation, that is the focus of our attention.”
Latvia took over the EU presidency in January and Jennings said: “The Latvian presidency has restarted the working groups on passenger rights.
“The process is just kicking off and it’s likely that we’ll see trade‑offs. However, there is broad agreement on the issues: ‘extraordinary events’, the length of delay (three hours or five hours), the level of compensation and [the issue of] connecting flights.
“We’ll work with the CAA and consult with the industry when we get to that stage.”