In the ongoing refunds saga, the EU has, as of 2 July 2020, begun infringement proceedings against the Czech Republic, Cyprus, Greece, France, Italy, Croatia, Lithuania, Poland, Portugal and Slovakia on the grounds that their national rules infringe EU law on consumers’ and travellers’ rights. In this blog, Spencer Turner updates us on the current position.

This blog previously discussed how the right to a refund for a cancelled holiday under the PTR 2018 or for a cancelled flight under Regulation (EC) No 261/2004 remained unchanged despite the Covid-19 pandemic and the refusal by some organisers and airlines to provide refunds within the required time limits.

On 13 May 2020 the Commission adopted a specific recommendation on vouchers to encourage Member States to set out attractive voucher schemes in place of refunds for consumers. However, the Commission has consistently made clear that consumer rights remained valid, that the underlying directives had not changed, and that Member States should not introduce legislation to lower those rights.

Nevertheless, the ten Member States listed above have introduced various different national rules on package travel which allow organisers of package travel holidays to issue vouchers instead of providing refunds and/or have extended the time for providing a refund well beyond the 14-day period allowed in the Package Travel Directive. The Commission considers these ten Member States to be violating Article 12(4) of the Package Travel Directive which provides that refunds should be paid no later than 14 days after the package travel contract is cancelled.

Now that infringement proceedings have been commenced by the Commission, what will happen next and will be there be any penalties for the ten Member States?

Following receipt of the formal notices each Member State will have 2 months to provide a detailed repose to the Commission. If the Commission then concludes that a Member State is failing to comply with its obligations, it may send a reasoned opinion which is, in effect, a formal request to comply with EU law. If the Member State continues to fail to comply, the Commission can refer the matter to the Court of Justice.

The Commission can request the Court of Justice to impose penalties for failing to communicate measures that implement the provisions of a directive. If the Court of Justice finds that a Member State has breached EU law, that Member State must take action to comply with the judgment of the court. If there is further non-compliance, the matter can be referred to the Court of Justice a second time where financial penalties can be imposed. 

James Beeton Cross-Border

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