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© Josep M. Bech Serrat (Catalonia-Spain)(josepm.bech@udg.edu)

 

The proposal for a new Package Travel Directive: an analysis from a consumer law perspective

24th IFTTA Worldwide Conference"Travel and Tourism Law - new challenges, new legislation"Charles University of Prague, 23 to 26 Oct 2013

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OverviewI. The traveller in the proposal for a new PTDII. Online travel servicesIII. Information requirements IV. A new particular right of withdrawal for package travelV. Other changes to the contract before the start of the package VI. Performance of the Package VII. Insolvency protection VIII. Conclusions

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I. The traveller in the proposal for a new PTD (Art 3, point 6)

Any person who is seeking to conclude or is entitled to travel on the basis of a contract concluded within the scope of this Directive

In line with… Travel law as one field of EU law connected to providing a protection which is not

limited to those consumers as defined in Art 2 Para 1 of Consumer Rights Directive; and

The concept of tourist (Art 3 of the third Draft WTO Convention on the Protection of Tourists and Tourism Service Providers)

But… Business travellers were included in the proposed definition ‘insofar as they do

not travel on the basis of a framework contract with a trader specializing in the arrangement of business travel’. Why? A related-policy issue.

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II. Online travel services

Online package holidays (Art 3 Para 2 lit (b)(v)) to be regulated by the new PTD: A combination of at least two different travel services for the purpose of the same trip or holiday…

+ … purchased from separate traders through linked online booking processes…

+… where the traveller's name or particulars needed to conclude a booking transaction are

transferred between the traders at the latest when the booking of the first service is confirmed; and

+ … the traveller perceives that there is a responsible for the whole package (as organiser).

Online assisted travel arrangements to be regulated by some provisions of the new PTD (Art 3 Para 5 lit (b)):

A combination of at least two different types of travel services for the purpose of the same trip or holiday […] resulting in the conclusion of separate contracts with the individual travel service providers, if a retailer facilitates the combination: +

(b) through the procurement of additional travel services from another trader in a targeted manner through linked online booking processes at the latest when the booking of the first service is confirmed.

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III. Information requirements (Arts 4 to 6) Maintaining what it was a success in the PTD… A minimum of information very specific to the tourism industry (Art 4 Para 1) Giving the information at different stages (Arts 4 and 6) An exception to the binding character of the brochure for the organizer (Art 5) Reaching some progresses made by the Consumer Rights Directive… A durable medium for providing a copy of the contract or a confirmation (Art 5 Para 3) ‘Obligation to pay’ button (Art 25 Para 2)

Providing sufficient information when the service is not realized, e.g. the service is ‘cancelled’ by the trader (Recital 25 and Art 9 Para 2)

“order with obligation to pay”

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… but some questions still remain open regarding… The Directive does not seek to prevent the traveller being overloaded with

information. Restrictions on information to be provided to the traveller depending on the

product or the medium used for concluding a distance contract; Recital (36) and Art 6 Para 1 lit (a) CRD.

Organizers and retailers were allowed to provide the traveller with ‘key [pre-contractual] information’ on the organizer’s website (recital 23).

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IV. A new particular right of withdrawal for package travel (Art 10)

A very welcome novelty…

A regulation containing some issues to be applauded… No formal requirement on how traveller may withdraw from the contract is

imposed A right to be exercised before the start of the package, so that the traveller is not

only entitled to withdraw from the contract within a certain period of time; and An appropriate compensation to the organizer. Standardized cancellations fees or

an amount corresponding to the price of the package minus the expenses saved by the organizer.

With only some minor gaps to be filled… No separate standard withdrawal form No timeframe and no means for the reimbursement are established; and No effects of exercising the right of withdrawal on ancillary contracts , i.e. credit

agreements, are provided for

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V. Other changes to the contract before the start of the package (Arts 7 to 9)

Some points were clarified compared with the PTD… The costs of transfering the contract to another traveller were limited to the actual cost

borne by the organiser (recital 26 and Art 7 Para 2, second sentence) The price alteration …

…. because of tourist taxes (Art 8 Para 1 lit (b)).… shall not exceed 10% of the price of the package (Art 8 Para 2).… the price increase shall be valid only if the organiser notifies the traveller of it

with a justification and calculation on a durable medium (Art 8 Para 3). Alteration of other contract terms are specifically referred to any of the main characteristics

of the travel services (as defined in point (a) of Art 4) or special requirements of the traveller which the organiser has accepted (as referred to in point (a) of Art 6 Para 2) (Art 9 Para 2).

… and a reasonable level of traveller protection

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VI. Performance of the Package (Arts 11 to 14)

Some points were clarified compared with the PTD… Suitable alternative arrangements are to be made where the return to the place of

departure is not provided as agreed (Art 11 Para 3). Reasons for rejecting the alternative arrangements proposed by the organiser (Art 11

Para 4). A transport back is required only if the package includes the carriage of passengers

(Art 11 Para 4). A more complete regulation on compensation for damages (Art 12 Paras 2 and 4). The same limitations as provided in international conventions shall apply to the

organiser. The extent of obligation to provide assistance was clarified (Art 14)

… but the proposal fails to provide a straight answer as to the distribution of liability between the organiser and retailer…

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… and some obscurities do still remain in the light of a European contract law approach The organiser shall remedy the lack of conformity. A right to cure? (Art 11 Para 2) Why an exoneration is related to price reduction? (Art 12 Para 3 lit (a)). A traveller’s duty to inform the organiser without undue delay of any lack of

conformity and exoneration (Art 12 Para 3 lit (b)). The reworded cause of exoneration ‘unavoidable and extraordinary circumstances’

(Art 10 Para 3 lit (b) and Art 12 Para 3 lit (a)(iii)).

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VII. Insolvency protection (Arts 15 and 16)

A more complete regulation…

It is for the member States to granting insolvency protection for…

… the effective and prompt refund of all payments made by travellers (including double payments of travellers to service providers) and

… insofar as transport is included, for the travellers’ effective and prompt repatriation in the case of insolvency.

Only package organisers and retailers who facilitate the purchase of assisted travel arrangements are subject to this obligation.

Actual financial risk of the activities of the organiser, relevant retailer or service provider is to be taken into account (Recital 34 and Art 15 Para 2), so that a limitation of liability is permitted.

Facilitating the free movement of services (Recital 35 ) and a mutual recognition of insolvency protection between EU member states.

An open question: Is the solvency of travel businesses to be secured before the start of its activity? No compulsory licensing was required.

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VIII. Conclusions

The proposal for a new PTD guarantees a high level of traveller protection compared with the PTD.

Important advances are made depending on the particular issue.

However, some gaps were detected in the proposal, particularly with regard to information requirements and a new particular right of withdrawal for package travel.

… and some issues on performance of the contract as provided in the proposal are far from being in line with the European contract law.