The agreement providing ATOL cover for 160 TTA-Worldchoice members was suspended in May, it emerged in court this week.
The so-called T-ATOL, agreed by the Civil Aviation Authority and Travel Trust Association (TTA), was established in November 2004 and updated last year to give participating TTA members ATOL cover.
The CAA has been issuing monthly “letters of comfort” since May – stating an agreement is pending to cover TTA members while a replacement is drafted – after lawyers advised it the T-ATOL almost certainly breached ATOL Regulations.
There was no announcement of the suspension and details only emerged in court this week in the case brought by the CAA against Travel Republic.
Revealing suspension of the T-ATOL, QC Ian Croxford told the court: “Until a replacement has been devised, the CAA is not taking criminal action against participating parties.”
TTA operations director Gary Lewis confirmed the scheme “expired by mutual agreement at the beginning of May 2009”. “Whilst a new contract is being drawn up, ‘letters of comfort’ have been provided to keep protection under T-ATOLS for TTA members and customers.”
In court, defence counsel Nicholas Purnell read internal CAA memos on the T-ATOL following advice that it could be unlawful, on the grounds that “split contracts breach the regulations regardless of whether the consumer is protected”.
Lewis said: “This did not in any way affect the TTA. The TTA takes full responsibility for any failure of a member, whether they sold a package or a single element of a holiday. That has not changed.”