Should the UK apply the provisions to any additional areas, or to stand alone contracts? Do you have any evidence to support your position?

Occasional packages sold not for profit – Travellers wouldn’t know the difference between an entity booking a multiple element trip to take participants away annually without making profit and an entity organising more regular multiple element trips whilst making a profit.

Travellers will come to understand that multiple element trips are all protected irrespective of how often the seller is arranging them and whether or not they are making a profit. The information provisions wouldn’t help as they wouldn’t apply to non-packages sold by the occasional seller. Travellers need to be able to make informed decisions based on criteria that are transparent. The fine line between what is and what isn’t a package in this context doesn’t allow them to make such decisions. As these trips are usually arranged for children, one would expect them to carry a greater level of responsibility rather than less. The current proposal at best would result in an unclear expectation about the level of responsibility.

Are there any particular elements of this definition that you think are difficult to interpret?
Many of the obligations in the directive sit on the ‘organiser’ of a package (in particular the key ones regarding liability and financial protection) so the definition of that term should also be properly considered. For example, would it be possible for a trader to argue that it is a retailer as opposed to an organiser and thus avoid the main obligations? For example, in a typical OTA scenario, could the OTA say that they aren’t the party that are combining and selling (the traveller does the combining when they make their choice), irrespective of whether or not the trader is acting as the traveller’s agent.
Making the retailer liable in addition to the organiser would not assist.

Do you envisage any issues with being able to comply with this new definition?
It may be difficult to identify who is an organiser and who is a retailer in a transaction. Even if it is possible to identify each, there may be insufficient commercial and operational links between the parties to enable them to comply with their respective obligations under the directive. The impact of that is layering and duplication of insurance and financial protection arrangements leading to increased cost for traders and ultimately the traveller; and lack of clarity for travellers.

What will be the costs of complying? Please provide evidence.

Are there any particular elements of LTAs that you have difficulty interpreting? Please explain your reasoning.
This is a difficult definition to see working in practice: technically and operationally hard to track when the second sale takes place and advising the LTA facilitator in a short timeframe.
More complex financial protection arrangements for the facilitator mean the turnover to be covered may either be insufficient or conversely there may be duplication in the cover provided on one transaction.
The consumer may expect certain elements of the LTA to be protected by a trader that isn’t obliged to provide the cover under the Directive (because a different trader is responsible or payment has been made directly to a supplier).
The overall result is lack of clarity for travellers and traders; and additional burden for the traders, neither of which fits with the stated objectives for this legislation.

Do you currently facilitate arrangements that will fall into scope? Please give examples.

What do you anticipate will be the cost of complying? Please provide evidence.

What issues do you envisage with complying? Please explain your reasoning.
See above.

Do you agree that the contract should remain in place unless the traveller requests termination?
Yes. This has largely been what happens under the 1992 Regulations anyway. To make that change would confuse the traveller and traders unnecessarily.

Do you envisage travellers being given the option to terminate in “unavoidable and unforeseeable” circumstances causing significant issues? Please give examples.
This is not a new right for consumers to terminate carte blanche where their specific booking isn’t significantly affected and shouldn’t be delivered as such. In practice many companies currently offer the option to terminate in force majeure situations where they are unable to perform the contract. This status quo should be maintained as far as possible.

Do you agree that we should not implement the right for a traveller to withdraw from an off-premises package travel contract within 14 days without giving reason? If you disagree, please provide evidence.

Do you agree that we should not introduce legislation that would make the retailer responsible as well as the organiser? If you disagree, please provide evidence.
The definition of package captures many old ‘retailers’ via dynamic packaging so the playing field has been levelled sufficiently via that extension. To extend to pure ‘retailers’ would see off the distinction between the two completely. It’s important to retain both to give travellers a choice about what type of service to use. As long as the definition of organiser is clear and squarely captures the sale of packages then retailers need not be liable in the same ways as organisers will be.

Do you agree with our opinion that the UK should not introduce a requirement for insolvency certificates to be provided with non-flight packages?
Agree. It would be another confusing incremental change for the public who are just starting to get used to ATOL certificates. The information requirements are enough. One uniform certificate dealing with ATOL and non-ATOL packages could be implemented when the ATOL Regulations come to be reformed.

Do you agree with our proposal to broaden the scope of the non-flight insolvency regime to cover the new definition of a package introduced by PTD 2015?

Are there any issues with the current regime that you think should be addressed? Please give examples.
The three options should be retained. They all still remain viable.

If run correctly, trust accounts:
• Are the single most flexible financial protection ‘tool’ for reacting to the varying risks associated with different combinations of sales of travel arrangements. They protect the ACTUAL funds that are at risk (as opposed to an annually assessed estimate of what funds could be at risk). This means they can mitigate against overlapping protection in the supply chain and can react immediately to a change in account holders’ sales patterns and supplier arrangements;
• Avoid the risks associated with insurance policies that can contain ‘loopholes’;
• Reduce the risk of over-trading on a bond or other guarantee.

Thus, Regulation 20 of the current Regulations should be replicated in its current form but:-

– It would benefit from some clarification around when funds can be released from trust. There are several travel trust account providers in the market that release funds from trust in respect of non-flight inclusive packages to pay suppliers where Supplier Failure Insurance is in place. Although this doesn’t represent a significant risk to travellers in terms of financial protection, it is a technical breach of Regulation 20 and it has not been effectively prosecuted. It will continue to be so under the new Regulations if not addressed. Thus, there should be either:-
• a change in the wording of Regulation 20 to allow release of funds from any trust in order to pay suppliers where Supplier Failure Insurance is in place or;
• more active prosecution of companies that run trusts in breach of that requirement.

– Trustees should be independent of the trader and be professionally qualified. If trustees are governed by a professional body, they are more likely to carry out minimum standards of trust account administration and reconciliation which is crucial to ensuring adequate funds are held in trust and released correctly. Professional organisations or individuals are also obliged to hold professional indemnity insurance which would give the trader/traveller a right of redress against the professional in the event if its negligence in running the account;

– It should require funds to be held in a separate and designated trust account (as opposed to a general client account or current account). Banks will treat funds in designated trust accounts differently from other general accounts: they will not allow charges to be applied against the funds in them, nor will they allow them to become overdrawn.

– It should require that the trustee be a signatory to the account either jointly with the trader or to have sole signing rights. That measure prevents a trader from unilaterally withdrawing consumer funds from a trust account in breach of the trust deed;

– It should oblige the trustee to be appointed under a formal trust deed which reflects the above requirements in the Regulations.

What do you think of the proposal to cover non-flight LTA insolvency protection under the same regime as non-flight packages? Do you envisage any issues with this approach? Please explain your reasoning.
The two regimes should be the same to maintain consistency and predictability. However, it may be difficult for each trader within an LTA to identify and forecast the LTA turnover that needs to be protected in advance. There are also likely to be technological, operational and interpretation difficulties in identifying an LTA/ facilitator of an LTA, as well as difficulties applying the rules about which funds need to be protected. Thus, compliance with the obligations may be difficult. Guidance is needed.

Do you agree with proposal to update non-flight insolvency options so that they can be used for EU sales?

What benefits do you envisage from being able to trade across EU under the UK insolvency regime? Please provide evidence.
I agree with those set out in the consultation document. I also believe that traders will have more confidence in their own pan-EU compliance and will therefore be more confident to trade and engage more aggressively and thus effectively across the EU.

What issues do you envisage as a result of this new principle? Please explain your reasoning.
We must remain aware of the risk that the UK scheme of financial protection is a more robust scheme of financial protection than other European countries enjoy. Indeed, it is already evident that some Member States are employing a more relaxed approach to the extended definition of ‘package’ with the resulting effect that fewer arrangements sold across Europe will be financially protected. UK Consumers will not be aware that a sale made in the UK is not necessarily covered by UK financial protection requirements and there will be no effective Regulations to oblige non-UK EU established sellers to advise them otherwise.
EU sales of non-flight packages sold by UK established businesses represents only a small market but it is preferable to maintain consistency so that all sales across EU are covered by same the same means of financial protection.

Do you have any suggestions on possible mechanisms that the UK could introduce to ensure compliance of third country traders?

Do you have any views on the creation of a central contact point(s) in the UK?
Agree with the principal but it is disproportionate to create a new body. Existing bodies should take up this role as far as possible.

Do you think that the CAA should act as a central contact point for queries related to ATOL alongside a designated body for all other queries?
Yes: and an existing designated body for other queries.

Should the UK set up a register for all UK established organisers to help comply with the 15 working day response requirement?

Do you agree that the measures should be brought into force on 1 July 2018? Please explain your reasoning.
Yes. Any earlier implementation may mean companies making changes to contracts financial protection arrangements and insurances for bookings that have already been confirmed.

Do you agree with our proposal that the incoming measures should only apply to any sales made from the coming into force date? Please explain your reasoning.
Yes. Any earlier implementation may mean companies making retrospective changes to contracts, financial protection arrangements and insurances for bookings that have already been confirmed.


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