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Package Holiday Regulations and Compensation

We all know how disappointing it can be when unforeseen problems spoil your holiday.

Luckily, there is legislation known as the Package Travel Regulations which offers protection to those on a package holiday. Therefore you could be entitled to compensation if your package holiday turned into a disappointment.

Is my holiday covered by the Package Travel Regulations?

For the purposes of the Package Travel Regulations, a package holiday is defined as a pre-arranged combination of at least two of the following:

  • transport
  • accommodation
  • other tourist services not related to transport or accommodation and accounting for a significant proportion of the package.

Your rights under the regulations

The Package Travel Regulations place a number of obligations on providers of package holidays. If the tour operator fails to comply with the regulations, they can be fined up to £5,000 in the magistrates’ court or face an unlimited fine in the crown court. 

The first of the regulations is that any descriptive material relating to the holiday must not be misleading.

Brochures, however, are governed by their own stricter rules. The regulations state that brochures relating to package holidays must be legible, comprehensive and accurate in describing the price and details of the holiday. If tour operators or travel agents fail to abide by these rules they will be fined.

The regulations also cover the scenario when the organiser of the package holiday makes any changes prior to the departure date. You should be informed of such changes as soon as possible in order to give you adequate opportunity to decide whether to accept the changes or withdraw from the contract, which you can do free of charge.

The next provision in the regulations states that if you withdraw from a contract in the manner described above, or if the holiday is cancelled for reasons which are not your fault, you are entitled to:

  • a substitute package of equivalent value, if available
  • a substitute package of lower value along with a payment totalling any outstanding differences  between the package offered and the value of the package originally purchased
  • be reimbursed for any fees paid under the contract.

The regulations also cover any changes made to the package after departure. If the organiser cannot provide any of the services agreed in the contract, then they should make alternative arrangements at no extra cost to you, and provide compensation for any difference, where appropriate.

Alternatively, if such arrangements are not possible or are rejected by you for good reason, the organiser should provide you with transport back to the place of departure or to another agreed location. Crucially, the fifteenth provision makes the tour operator responsible for the failings of any other parties providing services under the contract, e.g. hoteliers, car hire companies or activity organisers.

If the consumer makes pre-payments, the tour operator must protect these, and failure to do so is a criminal offence.

If your holiday wasn’t what you expected

If your holiday didn’t turn out as you expected, you may be able to claim compensation for the following:

  • loss of value – the difference between the value of the holiday you were expecting and the experience you actually had
  • out-of-pocket expenses  - any extra money you had to pay out as a result of the problem(s), for example alternative food if what was supplied was inedible
  • loss of enjoyment – compensation for the disappointment and distress caused by things not going to plan.

Making a compensation claim

If you want to make a complaint then you should try to do so as soon as possible, ideally while you are still on holiday. Your first port of call should be the tour operator’s representative. You have a duty to give the company the opportunity to rectify the problem at the resort. If they do not resolve the issue then you can write to them after you have arrived home, as long as this is within a ‘reasonable’ time. While you are still there it may help your claim to take photos as evidence of the problems you have encountered.

The tour operator may fail to acknowledge your complaints if they believe the problems were your fault or that they were beyond their control. Or they may offer you recompense that you are not satisfied, such as a voucher for a future holiday.

If this is the case you could consider forwarding your complaint to either a trade association or the courts.

Taking a complaint to a trade association

Many travel agents which organise package holidays are members of either the Association of British Travel Agents (ABTA) or the Association of Independent Tour Operators (AITO).

Both of these organisations offer an arbitration service which can be used if a settlement cannot be reached. 

Arbitration is a quick, low-cost way of avoiding court action. In arbitration a third party (the arbitrator) hears both sides of a dispute and comes to a decision to resolve the issue. All arbitrators are impartial and their decision is legally binding on both sides, so you will not be able to go to court if you don’t get the decision you were hoping for.

The process is entirely document based, which means you don’t have to go to any intimidating hearing hearings. You do however need to be sure that you can formulate a cogent argument in writing if you want to be guaranteed a decent chance of succeeding. With arbitration in general you can sometimes be liable to pay legal costs if you lose and you should make careful enquiries before entering into the arbitration as to any costs regardless of outcome.

Arbitrators will take into account several factors when weighing up a case.

The most fundamental thing you must do when making your case is prove that the contract of the holiday has been broken by the tour operator. A contract comprises implied terms and express terms. Express terms are those stated expressly in the contract, whereas implied terms are things that the law states should be present in the contract, such as the holiday being of reasonable quality in accordance with the price paid.

You will however forfeit your right to take the case to court if you take this option, and you will have to pay a fee.

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