The following article was first seen in ABTA's Travel Law Today Autumn 2018 edition and written by Debbie Venn, Partner, DMH Stallard LLP.

Since the introduction of the Package Travel and Linked Travel Arrangements Regulations 2018 (PTRs), travel businesses are getting to grips with their liabilities and the documentation that must be issued to customers. In addition, businesses are scrutinising the contracts they have with their suppliers, agents, sub-agents or other organisers, to make sure that responsibilities are clear and that the correct documentation is provided to customers. 

Will the PTRs apply to you?
The PTRs regulate the sale of packages and linked travel arrangements (LTAs). A “package” is a combination of two or more travel services (transport, accommodation, motor vehicle hire or other tourist services), for the purposes of the same trip.

An “organiser” is the trader who combines and sells packages. A “retailer” is a trader other than an organiser who sells or offers for sale packages combined by an organiser. A trader may be acting as an agent for the traveller or suppliers, but if that trader ultimately combines a package, then they will be the organiser for the purposes of the PTRs.

An organiser is responsible for:

• Provision of information relating to a package (Part 2).
• Performance of the travel services (Part 4). If the travel services do not conform with the contract, then the organiser is required to remedy this unless it is impossible to do so, or the costs would be disproportionate. Compensation may also be due.
• Provision of assistance during a package holiday (Part 4). If a traveller is in difficulty, assistance must be given.
• Financial protection against insolvency of the organiser (Part 5). This must cover the cost of refunds and relevant repatriation. Flight-inclusive packages must be protected under an ATOL. Non-flight packages must be protected by way of either a bond, insurance or paying monies into a trust account.

A retailer is responsible for:

• Information provision (Part 2). This applies equally to the retailer and the organiser, unless the parties agree who is responsible in the agency agreement.
• Contact point for travellers (Part 4). Messages, complaints or claims in relation to packages may be addressed to the retailer.
• Financial protection against insolvency of the retailer and performance of a package (Part 5). This applies where the retailer in the UK sells packages combined by organisers based outside of the EU unless the retailer can show that the organiser complies with the requirements under the PTRs. 

Retailers selling in the UK, acting for organisers established outside the UK and EU
If an organiser is not established in the UK or another EU member state, under Reg 27 of the Regulations their retailer is subject to the obligations of an organiser set out in Parts 4 (Performance of the Package) and 5 (Insolvency Protection), unless the retailer provides evidence that the organiser complies with those parts (this article deals with responsibilities under Part 4).

Therefore, if the organiser refuses to accept responsibility for the travel services in line with Part 4, the retailer will be be deemed to have that responsibility.

This does not mean that, where an organiser accepts their responsibility under Part 4 but assesses that the traveller is not entitled to any compensation in that instance, the traveller can then bring a claim against the retailer for compensation;the retailer will not be responsible for compensation if the organiser is accepting responsibility but has assessed that no compensation would be payable.

It is important in these situations that the retailer’s terms set out that the retailer is acting as an agent and therefore primary responsibility for the provision of the package rests with the organiser.

It is also recommended that the retailer’s booking terms set out the organiser’s responsibilities under Part 4, ie the organiser is:

• required under the PTRs to accept responsibility for the performance of the travel services, irrespective of whether they are performed by the organiser or others; and
• responsible for paying compensation where there is a lack of conformity, except in the stated circumstances, etc.

The retailer’s terms would then go on to say that those requirements override any conflicting provisions in the organiser’s booking conditions but that if the organiser does not deal with any complaints in line with those requirements, the retailer will be responsible on those same terms as it is required, by the PTRs, to be responsible where the organiser is outside the UK /EU and where the organiser refuses to be responsible to the traveller under Parts 4 and 5.

Stating that this responsibility is only due to a regulatory requirement will help reinforce the retailer’s status as an agent for legal and tax purposes. It will therefore be very important for retailers acting for overseas organisers to include these details in their terms, and ensure that they provide these and the organiser’s booking conditions to the traveller, to provide relevant information and ensure the terms are clear.

The agency agreement between the retailer and the organiser should clearly set out the responsibilities of the organiser and, where possible, an indemnity for the retailer against the organiser failing to comply with the PTRs. In any event, the traveller can only approach the retailer if the organiser hasn’t been through the process as set out in the Regulations. If they have, the retailer has no responsibility to deal with any further complaint because the organiser has complied with Part 4, even if the traveller didn’t get any compensation. Effectively, the traveller cannot have a second bite of the cherry with the retailer, just because they haven’t got what they want from the organiser.