This blog post is by James Beeton of 12 King’s Bench Walk.
James looks at the effect of the recently released draft of the new Package Travel and Linked Travel Arrangements Regulations 2018. In substance, the Regulations implement the provisions of the New Package Travel Directive (Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC).
The key points for personal injury practitioners are as follow.
The draft Regulations are set to come into force on 1 July 2018 (reg. 1(2)).
The Regulations are not retrospective – they will only apply to packages and ‘linked travel arrangements’ (“LTAs”) concluded after the commencement date (reg. 3(1)).
The old Regulations will continue to apply to contracts made before that date (reg. 37).
‘Packages:’ The Key Change
The New Definition
The key change is the redefinition of a ‘package.’ The new definition (which generally follows that set out by art. 3(2) of the New Package Travel Directive) is set out in reg. 2(5):
a ‘package’ means a combination of at least two different types of travel services for the purpose of the same trip or holiday, if –
(a) those services are combined by one trader, including at the request of or in accordance with the selection of the traveller, before a single contract on all services is concluded; or
(b) those services are –
(i) purchased from a single point of sale and selected before the traveller agrees to pay,
(ii) offered, sold or charged at an inclusive or total price,
(iii) advertised or sold under the term “package” or under a similar term,
(iv) combined after the conclusion of a contract by which a trader entitles the traveller to choose among a selection of different types of travel services, or
(v) purchased from separate traders through linked online booking processes where –
(aa) the traveller’s name, payment details and e-mail address are transmitted from the trader with whom the first contract is concluded to another trader or traders, and
(bb) a contract with the latter trader or traders is concluded at the latest 24 hours after the confirmation of the booking of the first travel service,
irrespective of whether the traveller concludes separate contracts with one or more travel service providers in respect of the services.
What are ‘Travel Services?’
Travel services are defined in at reg. 2(1) as being:
(a) the carriage of passengers;
(b) accommodation which is not intrinsically part of carriage of passengers and is not for residential purposes;
(c) the rental of –
(ii) other motor vehicles within the meaning of Article 3(11) of Directive 2007/46/EC of the European Parliament and of the Council establishing a framework for the approval of motor vehicles and their trailers, and of systems, components and separate technical units intended for such vehicles(a); or
(iii) motorcycles requiring a Category A driving licence in accordance with point (c) of Article 4(3) of Directive 2006/126/EC of the European Parliament and of the Council on driving licences(b);
(d) any other tourist service not intrinsically part of a travel service within the meaning of paragraph (a), (b) or (c)
What will not Qualify as a Package?
Reg. 2(6) provides that:
A combination of travel services where not more than one type of travel service listed in paragraph (a), (b) or (c) of point 1 is combined with one or more tourist services of the kind listed in paragraph (d) of that definition is not a package if the latter services –
(a) do not account for a significant proportion of the value of the combination and are not advertised as and do not otherwise represent an essential feature of the combination; or
(b) are selected and purchased only after the performance of a travel service of the kind listed in (a), (b) or (c) or the definition of “travel service” has started.
Recital 17 of the New Package Travel Directive suggests that ‘services which are intrinsically part of another travel service should not be considered as travel services in their own right’. This includes: ‘transport of luggage provided as part of carriage of passengers, minor transport services such as carriage of passengers as part of a guided tour or transfers between a hotel and an airport or a railway station, meals, drinks and cleaning provided as part of accommodation, or access to on-site facilities such as a swimming pool, sauna, spa or gym included for hotel guests.’
There also appears to be an attempt to clarify the position in relation to the ‘Orient Express question’: ‘This also means that in cases where, unlike in the case of a cruise, overnight accommodation is provided as part of passenger transport by road, rail, water or air, accommodation should not be considered as a travel service in its own right if the main component is clearly transport.’
The meaning of ‘other tourist services’ is further detailed in Recital 18 as including: ‘concerts, sport events, excursions or event parks, guided tours, ski passes and rental of sports equipment such as skiing equipment, or spa treatments’.
What is meant by the reference to ‘a significant proportion of the value’ of the combination? The New Package Travel Directive suggests that the services must account for 25% or more of the holiday value or be represented as an essential feature of the holiday.
A closer look at the various types of ‘packages’ that now qualify for protection demonstrates that the aim is to fill the gaps in protection which emerged under the old directive regime.
- Reg. 2(5)(a): the traditional pre-arranged package holiday.
- Reg. 2(5)(b)(i): this includes ‘dynamic’ or ‘customised’ packages – often the standard process for many online travel agents.
- Reg. 2(5)(b)(ii): a price breakdown for the individual components offered will not prevent the agreement from constituting a package if an aggregated figure is offered at the end.
- Reg. 2(5)(b)(iii): Recital 10 of the New Package Travel Directive indicates that ‘similar terms’ include ‘combined deal,’ ‘all-inclusive,’ or ‘all-in arrangement.’ Does ‘holiday’ qualify as a ‘similar term?’
- Reg. 2(5)(b)(iv): this excludes the possibility of leaving combination of the services until after the point of contract.
- Reg. 2(5)(b)(v): this provides for ‘click-through’ packages – could the fairly specific requirements of this provision be exploited to avoid qualification as a package? Note also the strict information requirements for these kinds of contracts under reg. 5(3).
‘Linked Travel Arrangements’
What are they?
There is also a new distinction drawn between ‘packages’ and ‘linked travel arrangements’ – the latter is defined separately at reg. 2(3):
a ‘linked travel arrangement’ means at least two different types of travel services purchased for the purpose of the same trip or holiday, not constituting a package, resulting in the conclusion of separate contracts with the individual travel service providers, if a trader facilitates –
(a) on the occasion of a single visit or contact with his point of sale, the separate selection and separate payment of each travel service by travellers; or
(b) in a targeted manner, the procurement of at least one additional travel service from another trader where a contract with such other trader is concluded at the latest 24 hours after the confirmation of the booking of the first travel service.
But, according to reg. 2(4):
(a) not more than one travel service of the kind listed in paragraph (a), (b) or (c) of the definition of “travel service”, and
(b) one or more tourist services of the kind listed in paragraph (d) of that definition,
are purchased, those services do not constitute a linked travel arrangement if the tourist services referred to in sub-paragraph (b) do not account for a significant proportion of the combined value of the services and are not advertised as, and do not otherwise represent, an essential feature of the trip or holiday.
The distinction between packages and LTAs has important consequences: the only protection in respect of (properly executed) LTAs is in the event of insolvency (reg. 26).
In addition to the need to provide insolvency protection, note also the need to provide the traveller with a copy of the new Regulations and to inform them that they will benefit from insolvency protection and that they
‘will not benefit from any of the rights applying exclusively to packages under these Regulations and that each service provider will be solely responsible for the proper contractual performance of his service’ (reg. 26(7)).
That information must be provided in the form set out in the relevant Schedules to the Regulations (reg. 26(8)) – see below.
Failure to comply with the insolvency and information requirements will result in a LTA being treated in effect as a package (reg. 26(11)).
What are the Information Requirements?
The information requirement provisions relating to both packages (regs. 4 to 7) and LTAs (reg. 26) are extensive and strict – failures by organisers, retailers or LTA providers to comply can result in criminal conviction and consequent liability to pay a fine (regs. 7(12) and 26(10)).
A number of Schedules to the Regulations set out the information to be provided –
- Before conclusion of a package contract in general (Schedule 1);
- Before conclusion of a package contract where hyperlinks to relevant information can be used (Schedule 2) or where they cannot (Schedule 3);
- Specifically where the package is a ‘click-through’ package (under 2(5)(b)(v)) (Schedule 4);
- Within the package contract itself (Schedule 5);
- In the case of LTAs in general (Schedule 6);
- In the case of ‘single visit’ LTAs (under reg. 2(3)(a)) (Schedules 7 and 8); and
- In the case of ‘targeted procurement’ LTAs (under reg. 2(3)(b)) (Schedules 9 and 10).
Substance over Form
The Recitals to the New Package Travel Directive make clear that the focus is on the substance of the agreement rather than form – see Recital 22:
‘Whether a trader is acting as an organiser for a given package should depend on that trader’s involvement in the creation of the package, and not on how the trader describes his business.’
And Recital 46:
‘It should be confirmed that travellers may not waive rights stemming from this Directive and that organisers or traders facilitating linked travel arrangements may not escape from their obligations by claiming that they are simply acting as a travel service provider, an intermediary, or in any other capacity.’
That approach is reflected in the new Regulations. Hence, a declaration by a package organiser or a trader facilitating a LTA that
- They act exclusively as a travel service provider, as an intermediary or in any other capacity; or
- The package or LTA does not constitute a package or LTA,
Does not absolve them from their obligations under the Regulations (reg. 30(1)).
Nor is a traveller able to waive his or her rights under the Regulations – any contractual term to that effect will not be binding (reg. 30(2) and (3)).
Reg. 3(2) provides that the Regulations will not apply to:
- Packages and LTAs covering a period of less than 24 hours, unless overnight accommodation is included (reg. 3(2)(a));
- Packages and LTAs provided occasionally on a not-for-profit basis for a limited group of travellers (reg. 3(2)(b));
- Packages and LTAs purchased on the basis of a ‘general agreement’ (meaning an agreement between a trader and another person acting for a trade, business, craft or profession, for the purpose of booking travel arrangements in connection with that trade, business craft or profession) (reg. 3(2)(c)).
These provisions reflect the exceptions set out in article 2 of the New Package Travel Directive:
- Reg 3(2)(a) is premised on the assumption that ‘there is less need to protect travellers in cases of short-term trips’ and the burden on traders can be lessened by excluding them from protection (Recital 19).
- 3(2)(b) includes trips organised by, for example, charities, sports clubs or schools for their members – this answers a question levelled at the application of the old directive (Recital 19).
- 3(2)(c) acknowledges that some companies make bookings through business travel agencies and do not require the same level of protection as that designed for other travellers.
Performance of the Package and Liability
Reg. 15(2) retains the organiser’s extended liability for the proper performance of services under the package contract ‘irrespective of whether those services are to be performed by the organiser or by other travel service providers.’
Although it was generally accepted that the old reg. 15 regime imposed an extended form of contractual liability, reg. 15(1) makes it explicit that the extended liability provisions are ‘implied as a term in every package travel contract.’
The obligation to offer compensation for damage due to improper performance of the package contract is found in reg. 16(3). The amount of compensation may be limited (to no less than 3 times the total price of the package) except in personal injury claims or claims for damage caused intentionally or by negligence (reg. 16(6)).
The traveller’s entitlement to compensation is qualified by reg. 16(4), which incorporates the substance of the old reg. 15(2) defences. These defences are also implied into every package travel contract (reg. 16(1)).
Where the package organiser is based outside the EEA, liability under the proper performance provisions may attach to a retailer based in the UK which offers the organiser’s packages for sale (reg. 27).
Organisers and retailers retain their right to seek contributions or indemnities from their suppliers for any failures in performance (reg. 29).
If you have any questions about the likely operation or effect of the new Regulations then feel free to get in touch with any of the International & Travel team at 12 King’s Bench Walk.