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More tips on how travel agents may be caught by, or avoid, the PTR - Helen Pugh, 3 Hare Court

26/01/12. On 15th December 2011 the Court of Appeal judgment in Titshall v Qwerty Travel Limited [2011] EWCA Civ 1569 was handed down. It was the second time the Court of Appeal has waded into the debate about when a combination of holiday arrangements is a ‘package’ within the meaning of the Package Travel, Package Holidays and Package Tours Regulations 1992 (“the Regulations”).

This is of real interest to both specialist travel departments and to domestic personal injury lawyers alike. Put succinctly, the broader the definition of ‘package’, the more opportunities for bringing and defending personal injury claims in the English courts pursuant to English law.  Unfortunately, whether a holiday is a ‘package’, within the meaning of the Regulations, is in some cases as clear as mud.

As regular readers will already know, the relevant definition in section 2(1) provides as follows:

“’package’ means the pre-arranged combination of at least two of the following components when sold or offered for sale at an inclusive price and when the service covers a period of more than twenty-four hours or includes overnight accommodation:

transport;

accommodation;

other tourist services not ancillary to transport of accommodation and accounting for a significant proportion of the package, 

and

the submission of separate accounts for different components shall not cause the arrangements to be other than a package;

the fact that a combination is arranged at the request of the consumer and in accordance with his specific instructions (whether modified or not) shall not of itself cause it to be treated as other than pre-arranged”

Disputes about whether a purchase includes two or more qualifying components and whether the time condition is satisfied are likely to be rare. The insertion of sub-paragraph (ii) set out above also reduces the likelihood of a dispute about whether a package is pre-arranged. The main area of controversy is over the meaning of ‘sold or offered for sale at an inclusive price’. 
 

ABTA v CAA

The Court of Appeal first considered the meaning of this phrase in ABTA v CAA [2006] EWCA Civ 1356. Chadwick LJ defined the issue as follows:

“The factual question to be resolved – on a case by case basis – is whether the services are being sold or offered for sale as components of a combination; or whether they are being sold or offered for sale separately, but at the same time.”

As Lord Justice Chadwick pointed out, it will often be easy to find an inclusive price where there is no breakdown of the price of each individual component or where there is a universal discount applied to the combination. 
 

Titshall v Qwerty

Mr Titshall had the misfortune of being injured in as yet unexplained circumstances whilst on holiday in Corfu.  He had seen a teletext advert which the judge found “advertised a last-minute get away to Corfu”. Mr Titshall had then rung the number and spoken to a representative of Qwerty Travel Limited, a travel agent. Neither the Claimant nor Qwerty’s representative could remember much about the call. There were no contemporaneous or near-contemporaneous documents such as invoices. The only firm evidence was Qwerty’s evidence of the script used during the call in which callers were informed that Qwerty were acting as agents only for suppliers (which were identified) in respect of the flights and accommodation respectively.  The Judge, trying the matter as a preliminary issue, decided that Qwerty did not sell him a package.

The Court of Appeal allowed the appeal and held that the holiday was a ‘package’. Tomlinson LJ identified two factors as the ultimate undoing of Qwerty. Firstly, at no point was Mr Titshall apparently told that he could purchase the flights or the accommodation, the one without the other. Secondly, an amount levied by Qwerty in respect of ‘service costs’ was a “clear unifying feature connecting the provision of the one service with the provision of the other”. There had been no breakdown of the service costs as it related to the accommodation and flights separately (indeed there was no explanation of what the service costs related to at all) and it “must have been presented as in part the price for putting together the package”.

The relevance of both factors can be firmly traced back to the decision in ABTA v CAA and in particular to the examples given by Chadwick LJ. The importance attributed to the service costs can be seen as the corollary of the importance attributed to a global discount. Similarly, the fact that a consumer was informed that the components could be purchased separately, one without the other, was of high importance in ABTA v CAA

Insofar as the decision in Qwerty confirms the importance and correctness of ABTA v CAA, it is of course to be welcomed. However, the decision entrenches the notion that the form of words used rather the substance of the transaction can be of most importance. This will make it easier for travel agents and others to avoid the Regulations simply by using specific wording. To this extent, the decision is to be regretted.

Helen Pugh
3 Hare Court 

Image ©iStockphoto.com/Elerium

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