OTAs will find avoiding product responsibility ‘problematic’ under new package rules, says lawyer

Industry lawyers say travel retailers face “a real challenge” in avoiding liability for holiday arrangements under the new Package Travel Directive.

Industry lawyers say travel retailers face “a real challenge” in avoiding liability for holiday arrangements under the new Package Travel Directive.

Claire Ingleby, director of mb Law, told an Abta travel law seminar in London last week: “The new expanded definition of a package will make it a challenge for traders who don’t want to sell packages. OTAs [online travel agents] are likely to find this particularly problematic. It will create a lot of software challenges.”

She added: “Acting as just a retailer or intermediary will be a real challenge where no other trader is accepting responsibility for arrangements.

“It doesn’t matter what the small print says [in terms and conditions], a selection of two or more qualifying travel services from a single point of sale will be a package. A great deal of care will be required in advertising, sales prices and contract documents.”

Abta senior solicitor Susan Deer told the seminar: “We focus on agent versus principal to establish liability at the moment. That is going to become less relevant.”

Under the new directive, to come into effect from 2018, Deer said: “You can be an agent and also an organiser [of package holidays].”

She warned it would not be enough for a company to declare it acted as an agent, saying: “We need to move away from thinking of booking conditions as small print and toward transparency.”

Deer added: “You don’t want to fall into selling packages because you failed to give customers the correct information.”

Travlaw senior partner Stephen Mason warned: “There will be many more packages [under the new regulations], so much more potential for liability.”

He said: “Agents can be liable if they haplessly allow themselves to be identified as an organiser. Even if you make clear you are an agent, if you put elements together at an inclusive price it will be a package and you will carry the liabilities as an organiser.

“Clients struggle to understand this now. It will be true in spades under the new regulations.”

Agents will also be liable for “miss-descriptions” of holidays and for “negligence or a negligent miss-statement in the booking process”, he said.

“If you sell more than one [holiday] element together you may be found to have sold a package. Judges will be under pressure to lean in the direction of saying ‘You sold a package’.”

Barrister Sarah Prager of 1 Chancery Lane agreed, saying: “The new liability is bad for those who have tried to avoid liability through clever company structures or documentation. They are going to have a problem.”

Maria Pittordis, marine, trade and energy business group leader at Hill Dickinson, highlighted organisers’ extended liabilities when things go wrong. These will include a customer’s right to cancel a booking in the event of “unavoidable and extraordinary circumstances” in a destination or its “near vicinity”.

Pittordis said: “The industry will want to limit the circumstances in which travellers can terminate. So this is likely to be contested. I see problems developing. Risk assessments in resorts will be very important.”

Mason agreed, saying: “The words ‘in the vicinity’ will be subject to a lot of litigation.”