After months of waiting The Court of Appeal has finally handed down its judgement in the appeal by the CAA of the Judicial Review by ABTA of the CAA’s guidance on the definition of a package. ABTA has once again been successful in its challenge in what should prove to be a landmark decision by the court.
Before ascertaining where this leaves consumer protection it would be good for us to look at the background to this key decision. Bizarrely the tweaking of the ATOL Regulations in 2003, which ultimately lead to the issue of ATOL Guidance Note 26, which was designed to bring into the ATOL net the larger “dual contracting” companies, was initially driven at the behest of ABTA themselves – ABTA at the time had suffered very substantial loss on the failure of one or two sizeable companies. This was despite the warning from many travel professionals, myself included, that the net effect of these changes would likely render many of ABTA’s travel agency members also having to obtain an ATOL. Equally the CAA were also warned that the 2003 Amendments to the ATOL Regulations were nothing more than a “fudge” which did not do the job intended, as the Court of Appeal decision has proved, and that the regulations required complete overhaul to meet the needs for consumer protection in today’s marketplace.
Three years on and many written words and much posturing later the inevitable has happened – frankly we have a complete an utter mess. The industry’s two leading regulators now have a degree of certainty on the law but currently no workable solution. In the interim ABTA has also abdicated its role in protecting the consumer too – not before time – you cannot be a trade association and a regulator and people’s champion! An oxymoron if ever there was one – years of an amazing balancing act of conflict.
One has a degree of sympathy with the CAA. They have been hung out to dry by a government that clearly does not truly want consumer protection, at least not until a sizeable low cost carrier fails when public outrage and political necessity will herald action. More than 50% of UK holidaymakers and travellers now choose to buy their arrangements from airlines and non-package operators outside of a regulated consumer protection environment. The inequity between the legal requirements for these suppliers and ATOL holders is scandalous and unworkable. Let us hope that ABTA and the CAA will now lay down swords and join together in convincing the government to create an entire system whereby all holidays are protected under one scheme at an equitable and uniform cost to the entire travel and airline industry. The ATOL Regulations and Package Travel Regulations are too old, too complicated, unsustainable, inequitable and frankly hopeless in meeting the requirements of today’s marketplace.