ABTA stands by holiday cancellation charges
ABTA insists tour operators don’t need to re-think their cancellation charges despite a court ruling that they are unfair.
In a case brought before the Small Claims Court last week, Thomson was ordered to refund a customer the full cost of a holiday he had cancelled just six days before departure due to an illness.
Thomson’s parent company TUI had claimed that its cancellation clause permitted it to withhold the full amount paid for the holiday – some £2,200.
However, Bruce Crawcour of Shrewsbury told the court that he could see from checks made on the Thomson website that the company had resold his flights within 24 hours and that it had resold or cancelled his hotel room two days before departure, so it had not made any significant loss.
Mr Crawcour successfully argued that TUI was in breach of the Unfair Terms Consumer Contract Regulations 1999 and the 2004 guidance from the Office of Fair Trading on Unfair Contract Terms in Package Holiday Contracts.
The judge agreed with Mr Crawcour that the OFT guidance only allowed operators to impose a sliding scale of cancellation charges that increase closer to the date of departure if they were a genuine pre-estimate of the holiday company’s loss.
He said the internet and development of better data gathering had fundamentally changed the situation since these clauses were written more than 10 years ago. Tour operators can now more easily gauge whether they have made any loss as a result of a cancellation.
TUI was ordered to pay Mr Crawcour, who represented himself, the full cost of the holiday plus all his court fees.
ABTA said the ruling would not set a legal precedent as decisions made in the Small Claims Court are not legally binding on other courts.
In a statement, it added: "We do not expect this judgement to have wide scale implications for the travel industry.
"The Office of Fair Trading has previously made it clear in guidance that a sliding scale of cancellation charges which reflect a genuine pre-estimate of loss assessed at the time the contract is made is acceptable. "
However, TUI has been given leave to appeal to the High Court and if it fails there, the ruling could have wider implications for the travel industry.
Linsey McNeill
Editor Linsey McNeill has been writing about travel for more than three decades. Bylines include The Times, Telegraph, Observer, Guardian and Which? plus the South China Morning Post. She also shares insider tips on thetraveljournalist.co.uk
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