Travel Republic and director Kane Pirie stood trial for breach of the ATOL Regulations this week in a case that will test the legality of operations at many other firms and the ability of the Civil Aviation Authority (CAA) to regulate the sector.
The prosecution alleged Pirie and Travel Republic sold package holidays without the necessary ATOL cover.
Prosecuting counsel Ian Croxford told Stratford Magistrates Court: “We will show packages were sold and inadequate information given [to customers].”
Croxford suggested Travel Republic encouraged consumers to book combinations of holiday elements, then “unbundled” the purchases retrospectively by emailing a series of “booking request confirmations” and “booking confirmations” for each item – flight, accommodation, transfer.
The interval between a client receiving a booking request confirmation and a booking confirmation could be as little as one second.
The court heard testimony from a series of consumers who booked with Travel Republic and subsequently lost flights when XL Leisure collapsed in September 2008.
Witness Laura Edwards told the court: “I understood it was a package holiday. You booked [the elements] one at a time and that equated to a package holiday.”
Earlier, Croxford argued Travel Republic secured a commercial advantage by trading in the way it did, at the cost of “a serious detriment” to consumers.
Arguing that if the company was convicted, Pirie should also be found guilty, Croxford said: “Mr Pirie consented to the commission of the offences.”
He said: “Travel Republic has been aware, certainly since September 2007, that the CAA did not accept it was operating within the regulations. Pirie was fielded to deal with this. He knew the CAA considered Travel Republic in breach.”
Hugo Keith QC, acting for Pirie, said the defence would challenge the witnesses. He argued: “A large number of witness statements contain highly contentious statements.”
Cross-examining CAA ATOL enforcement team supervisor Mark Hydes, defence counsel Nicholas Purnell, read a series of internal CAA memos referring to the decision to prosecute while not proceeding against other retailers. He suggested to Hydes: “It is a somewhat muddled approach, isn’t it?”
Purnell also read out a CAA memo noting: “Travel Republic’s financial success and rapid growth is likely to be encouraging other companies to trade without an ATOL.”
The case continues and is expected to last three weeks. The prosecution will offer no evidence in respect of two of the 40 alleged offences on the grounds one witness will not attend the court.