Resort is Revolting…

Not a reference to the seasonal outbreak of gastric illness, but to the recent spate of civil unrest in Tunisia and Egypt. Customers departing during the next few days and weeks are no doubt clamouring for information, many of whom are perhaps not quite as keen on their chosen destination as they once were. Where does this leave the tour operator? Must you allow clients to cancel without penalty?

Regulation 12(a) of the Package Travel Regulations 1992 provides that “… where the organiser is constrained before departure to alter significantly an essential term of the contract … he will notify the consumer as soon as possible in order to enable him to take appropriate decisions and in particular to withdraw from the contract without penalty …”

This seems clear enough. If you are constrained you must offer the opportunity to cancel. However, does this mean that because the FCO advises against non essential travel your entire Egyptian programme is constrained? What about departures next week, in two weeks, one month or several months ahead?

Helpful guidance as to the meaning of constrained was given in the case of Lambert v Travelsphere Ltd. This concerned a tour to China to commence on 27 April 2003. In early April there was a SARs outbreak affecting the destination and on 2 April 2003 the Department of Health advised against travel. On 12 April 2003, Mr. Lambert cancelled his holiday and was charged a 60% cancellation fee. On 24 April 2003, SARs was still rife and Travelsphere cancelled the tour, offering all the other customers a full refund. Mr. Lambert sued for the return of the cancellation fee arguing that at the point of his cancellation, Travelsphere was constrained, relying on the fact that the tour was ultimately cancelled. He lost on appeal.

In his judgment, HHJ Darroch, referring to guidance on where an organiser is constrained, said:

“The interpretation I put on it as a matter of law, is this. You may not shut your eyes to the absolutely obvious, but you may keep the contract open until the last possible moment. Whilst there is a flicker of hope that you may be able to carry it out, you are not constrained. You are exercising a choice.”

It follows that when faced with a potentially constraining situation, a tour operator is entitled to keep matters under review and only cancel when it is obvious that a holiday cannot operate.

If you have a flight departing tomorrow and the local airport is in the hands of revolutionaries, you are probably constrained. The situation may however be entirely different in seven days time. Much the same can be said for FCO advice. Who is to say that the present advice to avoid Tunisia or Egypt won’t change next week?

Therefore when faced with a fluid situation, it is entirely reasonable to review a potentially constraining event on a day by day, week by week basis. If the customer blinks first and cancels, as did Mr Lambert, this must be their problem.

For further information please contact Claire Ingleby or Robin Adams of mb LAW at claire.ingleby@mb-law.co.uk or robin.adams@mb-law.co.uk

Please note this information is for general guidance only and is not intended to be a substitute for specific legal advice.