Travlaw partner Krystene Bousfield assesses how travel organisers can seek to protect themselves against cancellation claims
The effects of climate change are being felt ever-closer to home, affecting more and more travellers heading for European beach holidays and city breaks. Providing adequate information to holidaymakers before they book is key to avoiding cancellation claims.
For those choosing to embrace ‘adventure travel’, environmental risks such as drought and flooding are accepted, indeed expected and planned for. But for those wanting to enjoy their package holiday beach or city break acceptance is less forthcoming, with travellers instead looking to their package organiser for reimbursement should they decide they no longer wish to travel.
Should travellers be more alert to the fact that what were once deemed ‘extraordinary circumstances’ are simply the new norm? Are instances previously thought to be ‘unforeseen’ now an accepted risk for those wishing to travel?
A valuable indication as to how such cases may be determined can be taken from MD v Tez Tour UAB (Fridmis AB intervening), Case C-299/22 (Judgment dated February 29, 2024), a case that escalated all the way to the Court of Justice of the European Union (CJEU).
MD chose to cancel their package holiday three weeks after booking, and only two weeks prior to departure citing the spread and associated health risks of Covid-19.
One of the key questions put to the court was whether the situation relied on as a basis for termination of the contract (the existence and spread of Covid-19) had been unforeseeable (and therefore necessarily non-existent) at the time that the package travel contract was concluded. Put simply, if the traveller was aware of the potential risk at the time of booking, can they then rely upon that same risk as a reason for termination later down the line?
The CJEU held that they could not, and that circumstances already known to the traveller, or foreseeable by them at the time that the package travel contract was concluded cannot be the basis for exercising a right to terminate under Article 12(2).
That being said, the CJEU continued: “Where a known existing or foreseeable situation is evolving significantly, it cannot be ruled out that significant changes to the situation after the contract is concluded could in fact give rise to a new situation, capable of meeting the definition of ‘unavoidable and extraordinary circumstances’ within the meaning of Article 12(2).
“The national courts must therefore assess, from the perspective of an average traveller who is reasonably well-informed and reasonably observant and circumspect, whether the level of health risk which led to the termination of the package travel contract had changed significantly from that which existed or was foreseeable when the contract was concluded.”
Applying this to our question – whether ‘extreme’ or unpredictable weather as a result of climate change can be deemed ‘unforeseeable’, it seems one needs to assess what the position was (from the perspective of an average, reasonably well-informed traveller) at the time of booking and whether this position has changed between then and a traveller’s decision to cancel.
If, at the time of booking, the traveller was aware of high or above-average temperatures in destination, but by the time of travel the destination had broken out with wildfire – clearly that situation has ‘evolved significantly’ and they could opt to cancel and receive a refund (where the wildfires significantly affect the performance of the package).
However, if there were known droughts in destination at the time of booking, resulting in less greenery, water shortages, perhaps the inability to use pools, and the circumstances remained as such, a package organiser would have a defence to any claim for a refund prior to departure should the traveller decide not to travel for this reason. The traveller could still of course cancel, but they would be subject to termination fees as per Regulation 12(3).
Note that this does not take away from an organiser’s obligations under Regulations 11(3) as, if circumstances result in the organiser being unable to provide the travel services as booked without changing them significantly, then a traveller can cancel and obtain a refund of monies paid.
How can organisers seek to protect themselves?
The key phrase to note from the case above is “from the perspective of an average, reasonably well-informed traveller”. If an organiser can show that a traveller was well aware of risks involved prior to booking, they will have a greater chance of defending any subsequent claim for a refund, provided the organiser is still able to provide the travel services.
Organisers should ensure that travellers are educated and informed, as far as possible, about potential events and risks prior to booking. This can be done by way of a properly worded disclaimer, (as confirmed by Lord Justice Underhill in the matter of Sherman & Anor v Reader Offers Ltd [2023] EWHC 524 (KB)); proper and correct terms and conditions (again making sure these are brought to the attention of the traveller prior to booking) and even in conversations with the traveller pre-booking, where holiday options are discussed in person or on the phone.
Having a clear and concise record evidencing that the traveller was fully informed of potential risks prior to booking may affect the extent of their ability to cancel pre-departure and obtain a full refund under the terms of the Regulations.
Notwithstanding the above, organisers need to be alive to the fact that climate change is going to have an impact on the future of travel and should ensure that they have appropriate protection in place to cover instances where travel services cannot be provided because of these extraordinary circumstances.
It is also a reminder for travel companies to ensure that they are not mis-selling holidays, perhaps by using out-of-date descriptions or images of the resort and destination. Legal claims arise if the travel services ‘significantly change’ and so ensuring that the traveller knows exactly what they are purchasing at the time of booking will again reduce the risk of refund claims at a later point.
Abta’s training day, An Essential Guide to the Package Travel Regulations, takes place on November 27. More information can be found on Abta’s website.