The COVID-19 pandemic created much controversy regarding the issue of customer refund rights under the Package Travel Directive (PTD).

One of the most controversial areas concerned the position advocated by certain regulators that the Foreign, Commonwealth & Development Office (FCDO) advice against travel automatically triggered full refund rights for the customer – even in the circumstance that the underlying flight was still operating.

This exposed package holiday organisers to potentially catastrophic losses, given that they could not recover the flight cost from the airline. This was particularly controversial at a time when the FCDO was itself criticised for taking a blanket approach to its advice, before it moved to a more nuanced and regional approach.

The Court of Justice of the European Union (CJEU) has recently published a judgment which clarifies how the PTD should be applied in these circumstances. In the case of Tez Tours (see here), the CJEU has confirmed that:

  • Official travel advice (such as the FCDO) is not the trigger for full refund rights under the PTD. The trigger is a three-stage test set out in the PTD itself:

(i) there must be unavoidable and extraordinary circumstances;

(ii) occurring at the place of destination or its immediate vicinity; and

(iii) which significantly affect the performance of the package or carriage of passengers to the destination.

A detailed explanation is available here.

  • The relevance of official travel advice is that it may be of considerable evidential value as to the existence or not of unavoidable and extraordinary circumstances in a particular destination.
  • In assessing whether the package has been significantly affected, one must look beyond simply asking whether it is impossible to perform the package.  A package will also be significantly affected if it cannot be performed without exposing the customer to risks to their health and safety. For instance, even if the flight and the hotel are still operating, full refund rights will apply if it is too risky for the customer to travel.

In assessing whether there are risks to the customer’s health and safety:

  • The personal circumstances of the customer should be taken into account e.g. if the customer belongs to a higher-risk group, then this is relevant in the assessment.
  • The assessment has to be made from the perspective of a reasonably well-informed, observant and circumspect customer. The customer’s subjective fears or anxieties are not relevant – these fears to health and safety have to be reasonably held.
  • The assessment has to be made at the time of cancellation of the holiday, but looking-forward to what the situation is likely to be at the time of the holiday.

Changes to the situation over time:

  • A customer cannot rely upon a situation which existed (or was foreseeable) at the time the holiday was booked, unless the situation has changed significantly since the time of booking.
  • Measures imposed in the place of departure can be taken into account in determining whether the package has been significantly affected if these have been imposed as a consequence of circumstances occurring at the place of destination of the holiday. For instance, if restrictions are placed upon a customer upon returning to the UK because of something which is happening at the destination, then this can be taken into account.

The impact of the pandemic upon the PTD continues to be felt, with more cases coming through the courts which will provide much needed clarity as to how the law applies in this area. 

If you would like to discuss any aspect of this article, please do not hesitate to contact Rhys Griffiths by email.


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