European Commission consults on changes to Package Travel Directive

The European Commission is consulting on revisions to the Package Travel Directive (PTD) which could shape reform of the UK regulations despite Brexit.

Revisions could be made by the end of this year and won’t automatically be incorporated in the UK Package Travel Regulations (PTRs) since Britain left the EU at the end of January 2020. But UK companies trading in Europe would need to comply and the government has said it will look at EU developments.

David Marshall of the Department for Business (BEIS) consumer and competition team told an Abta regulations conference in December: “We’ll look quite closely at what the EU is doing and, frankly, see if we can pinch ideas.”

The EC consultation invites contributions on how the definition of a package could be revised, including whether travel services combined by high street or online travel agents should be packages at all. This seems unlikely to change. But a key series of proposals relate to cancellations due to Covid-19, noting not only the difficulties consumers often had in obtaining refunds but also those of travel organisers in making refunds “because they had not received refunds from service providers such as airlines”.

Comment:The key issues in the EU’s Package Travel Directive consultation 

The consultation asks whether this should change and “package travellers obtain a direct right to a refund against service providers” or “organisers have the right to a refund against service providers such as airlines or hotels, within a specific deadline to enable them to reimburse travellers”.

It notes “there are no provisions in the [existing] PTD on the possibility to offer vouchers”. It asks “should the PTD specify that organisers may issue vouchers instead of a refund within 14 days” provided that travellers agree, there is a guarantee they will receive their money and the vouchers are protected against insolvency?

The consultation also asks: “Should the PTD regulate the consequences of ‘official travel warnings’, eg their legal value in connection with cancellations?”

Other proposals include restrictions on prepayments for package holidays, asking whether these “should be prohibited completely”, “limited to [up to] 20% at the time of booking” with the rest “paid shortly before departure”, or limited to 50% and “paid at the earliest one month before departure”.

It notes both Thomas Cook’s failure and the pandemic raised “questions about potential gaps in some national insolvency protection systems and the availability of insurance [cover]” and asks if a ‘crisis fund’ should be created at EU or state level.

The consultation was launched last week and runs until May 10. The EC promises a separate consultation on consumer financial protection of transport outside of packages including “the risk of an insolvency regarding reimbursement of tickets and repatriation”.

Travlaw partner Matt Gatenby told an International Travel Law Network seminar: “The UK is not as interested in what the EU says now, but it should be. The EU is well ahead of the UK on timing.”

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