When is a package holiday not a package holiday?

Posted by Daniel Scognamiglio on

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Confused? Some tour operators clearly are!

There are an increasing number of holiday providers advertising through the web, newspapers or on Teletext offering holidays.  A lot of reputable tour operators provide good quality holidays and afford consumers a great deal of protection.

The less scrupulous can cut corners and try to avoid consumer protection simply by providing flights and accommodation for separate and distinct amounts in their invoice. If the package were for an inclusive price for flights and accommodation the consumer would have the protection of the Package Travel Regulations. 

Where a consumer buys flights and accommodation separately they do not have the protection of the Package Travel Regulations.  The manner in which holidays are being sold has transformed with the arrival of the Internet.  Unfortunately the law has not kept up although the Court of Appeal has reached a decision that will help numerous consumers.

By way of background, for the Package Travel Regulations to apply and give a consumer protection, that consumer will need to have bought a "package holiday".  That is a holiday that is sold or offered for sale at an inclusive price for transport, accommodation and other ancillary tourist services. 

On this occasion, Mr Titshall had telephoned Qwerty Travel after having seen their advert on Teletext.  He bought a holiday from them and paid a single amount of money to them for that holiday.  It may well have been that the telephone operator had told him that the holiday cost was made up of component parts for the flights, transfers and accommodation.  On this interpretation, Mr Titshall had not bought a package holiday. 

The Judge at first instance agreed with the defendant that this was not a package holiday and subsequently an appeal was lodged. 

On appeal, the Court looked at the purpose of the European Legislation from which the Package Travel Regulations derive.  That is taking a purposive approach and it is always interesting when the Court takes such an approach which is in someway alien to English law. 

The critical question here was whether Mr Titshall had purchased a pre-arranged combination at an inclusive price.  The invoice that was raised after the payment showed that there were distinct components to the holiday.  The credit card bill showed a single payment having been made. 

"Notwithstanding that the price of the combination is the aggregate of the price for each component that would have been sold or offered for sale; it has been sold or offered for sale as a separate service outside the combination.  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."

There were two features of the transaction that persuaded the Court:

"The first is that it is plain no explicit suggestion was made to Mr Titshall that either the flights or the accommodation were available for separate purchase, the one without the other." 

"...The second is that the treatment of the service costs, however precisely that was dealt with in the elementary and simple breakdown, seems to me on the facts of this case that any rate to supply a clear unifying feature connecting the purpose of one of the services with the provision of the other. 

"The service costs, or at any rate the greater part thereof, must in some way have been presented as in part the price for putting together the package, not as the cost of some separate service, available in its own right, which would have been an incoherent suggestion."  

"It is inherently unlikely to the point of being inconceivable that, insofar as it was presented as a freestanding cost [...] it was put forward on the basis that that cost would be X if the flights alone were bought or Y if accommodation alone was bought."

"A package'. Inevitably [has] component parts it would not otherwise be in a package, but where those parts represented for sale as a whole for an inclusive price which comprehended the cost of putting them together as well as the cost of sourcing them."

On this occasion the consumer, Mr Titshall had purchased flights and accommodation at the same time and not separately.  They were sold to him as the component parts of the combination or package.  As the sale of two services may have been identified, the cost of either of them could not be ascertained. 

Accordingly the Court of Appeal dismissed the first instance Judgment and decided that Mr Titshall had purchased a package holiday.

Practically, a great deal would come down to the consumers' understanding of what they had bought and how the holiday had been described to them.  Good clear evidence as to the consumers understanding will need to be provided to enable the Court to reach the same decision as it has done in Titshall.  This is a good decision for consumers.  It is also a very good decision for tour operators who do not try to work around consumer protection by pretending what they are selling is not a package.  This is not a good judgment for those out there who are selling packages whilst attempting to deny consumers their protection.

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About the Author

Daniel leads our travel team. He is a specialist in multi-jurisdictional disputes, travel insurance litigation and tour operator liability and is qualified as a solicitor in England and Attorney at Law (non-practising) New York.

Daniel Scognamiglio
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023 8085 7339

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