20 Nov

Business travel – who’s responsible when things go wrong?

This article was first written by Joanna Kolatsis, Director of Themis Advisory for ABTA's Travel Law Today issue eight, which can be download at abta.com/travellawtoday

An area that continues to encourage debate post implementation of the Package Travel and Linked Travel Arrangements Regulations 2018 (PTR) is the exemption of business travel arrangements.

This frequently raises the question as to who is responsible for business travellers when things don’t go to plan and whether a duty of care is owed as a result. It is important to clarify the basis of the exemption before we look into areas of responsibility.

The preamble to the EU Package Travel Directive 2015 states:

‘7) The majority of travellers buying packages or linked travel arrangements are consumers within the meaning of Union consumer law. … it is not always easy to distinguish between consumers and representatives of small businesses or professionals who book trips related to their business or profession through the same booking channels as consumers. Such travellers often require a similar level of protection. In contrast, there are companies or organisations that make travel arrangements on the basis of a general agreement,…The latter type of travel arrangements does not require the level of protection designed for consumers. Therefore, this Directive should apply to business travellers, including members of liberal professions, or self-employed or other natural persons, where they do not make travel arrangements on the basis of a general agreement...’

The PTR confirmed the exemption in the final published regulations:
3. …
(2) These Regulations do not apply to:
(a) …
(c) packages and linked travel arrangements purchased on the basis of a general agreement.
(3) … a “general agreement” means an agreement which is concluded between a trader and another person acting for a trade, business, craft or profession, for the purpose of booking travel arrangements in connection with that trade, business, craft or profession.’

It is clear that while there is an exemption for business travel within the PTR, it will only take effect if a ‘general agreement’ (GA) is in place. It is not an automatic exemption as is frequently assumed. For the purposes of this article, we will assume that business travel arrangements have been made under a GA. In these circumstances, who is responsible when things go wrong? 

When Travel Management Companies (TMC) make arrangements under a GA, they are usually acting as agents for the suppliers of the travel services booked. In the event of a problem, while most TMCs will do their utmost to assist their customers (as part of the service offering), it is likely that businesses and travellers may not fully understand the extent of what this means for them.

Subject to what the overarching GA states as to the level of assistance agreed between the business and the TMC, as a general rule the TMC will assist in times of disruption by liaising with the relevant suppliers concerned. However, there is no automatic right to provide alternative options at the TMC’s cost. For example, if the TMC books flights and accommodation and the airline goes out of business prior to travel, the traveller will not be entitled to a refund for the flight and they will have to purchase a new flight. A large corporate client may understand this, but a small business or individual business traveller may not.

Businesses are under increasing pressure to ensure they provide a duty of care to their corporate travellers when making business travel arrangements for them. Much of the desire to ensure travellers can be properly looked after is pushed on to the TMCs who engage with risk/security management professionals, health and safety providers and international business etiquette advisers as part of the growing need to provide a holistic travel solution. This is particularly the case when looking at the larger end of the corporate market. These initiatives act as valuable precursors to any trip in an attempt to mitigate potential risks, but the role of the TMC doesn’t necessarily change; the brunt of the responsibility lies with the corporate entity itself. The only time this may differ is in the event of the TMC’s negligence in arranging the services.

The issue of extended business trips to include leisure arrangements also gives rise to a number of grey areas. While the corporate entity will ultimately be responsible for their travellers while on business, this raises the question as to who is responsible if something goes wrong during the travellers’ leisure time? What happens if their family joins them? Do these arrangements fall outside the scope of the GA? Will they be covered under the PTR?

As a result, it is imperative that the role of the TMC is clearly explained to the business and travellers in an effort to manage the level of expectation, and the extent of the obligation, to provide assistance in the travellers’ time of need. In order to ensure the PTR exemption can be relied on the TMC should:

  • enter into a valid GA with the business specifying that the travel arrangements will not garner the protection of the PTR;
  • engage with the business to ensure they understand the level of the TMC’s responsibility towards the business and their travellers in the event of disruption or emergency;
  • confirm its agency status and clarify that there is no other protection in place;
  • clarify the treatment of extended leisure arrangements under the GA.

Finally, notwithstanding the comments above, it is essential to reiterate that small businesses and individual corporate travellers may still gain protection under the PTR in accordance with the preamble to the Directive. A clear explanation of the role of the TMC in these circumstances is imperative to avoid an inadvertent responsibility towards business travellers under the PTRs, particularly when extending business travel arrangements for leisure purposes. Clarity and clear definition of roles will be key.