The final run up to the end of 2007 has seen many legal issues affecting business travel  coming into prominence:

1. CAA consults on new ATOL Licence Conditions

These proposed changes follow on from a Department of Transport/CAA consultation process earlier in the year and follows the government’s decision in October to proceed with the £1 ATOL Protection Contribution (APC) to replenish the Air Travel Trust Fund.  The main proposals are the introduction of a new reporting system for the collection of APC which should also replace Bonds and Deeds of Undertaking; changes to the provision of financial information by ATOL holders and changing monitoring of activity; the introduction of minimum business systems specification and the appointment of person by each ATOL holder to oversee licence compliance.  The CAA has launched a road show to explain these proposals to the trade, but for many established licence holders it is likely to mean the recovery of money tied up for Bonds or the release from their insurance obligations.

2. GDS-Deregulation

November also saw an announcement by the European Commission to modernise the old CRS Regulations to allow travel agents to expand their offering and to give better competition in the airline distribution market.  The revised Code of Conduct for CRS allows both CRS’s and airlines the freedom to negotiate booking fees charged by the reservation systems and the information content provided by the airlines which should give greater efficiency in price and quality.  The new Code of Conduct includes regulation to protect against any anti-competitive abuse by any GDS owning airline and provides for fair presentation of all options in CRS displays and the protection of personal data.  The new regime has already seen fierce negotiations between certain airlines and GDS’s in terms of access to full content in consideration for payment of segment fees by the airlines and the imposition of opt in fees.

3. New opportunities for Class Actions in the UK

In 2007, airlines particularly have faced US class actions where the Court will permit lawyers to advertise for consumers and other groups to join an established class of people targeting a claim against a particular airline defendant.  That type of activity may well be heading to the UK.  In November the OFT published recommendations to the Government to improve the effectiveness of recovery by consumers and businesses that have suffered loss as a result of breaches of the competition law.  It found that consumers and businesses wanting to bring legal proceedings for these losses faced significant barriers in the UK system.  The changes the OFT proposed include allowing representative bodies to bring actions on behalf of groups of consumers and businesses ‘in certain cases, limiting the risks of Claimants having to pay the other side’s legal fees, and suggests funding be made available for cases of considerable merit.  If these recommendations are adopted, we can expect to see substantial class actions in the English Courts when it is suggested price fixing and other anti competitive activity has resulted in losses to consumers and corporations.

4. House of Lords decision on credit card cover for overseas purchases

Travel management companies are aware of Section 75 of the Consumer Credit Act 1974, which permits card holders to charge back transactions where there is an allegation of breach of contract or the services not being provided.  This allows the card holder to reverse out the transaction, and results in the credit card company charging the transaction back by debiting the value from the merchant’s account.  This is also a valuable protection for consumers where the provider goes bust and applies to purchases between £100 and £30,000.  At the end of October 2007, the House of Lords had to decide whether the Section 75 protection applied to overseas as well as domestic UK transactions.  It was held that it does, and therefore chargebacks will now apply to transactions which take place outside of the UK. 

5. Airline Websites are found to be misleading

Towards the end of November 2007, the European Commission found that at least two hundred European airline websites out of the 400 viewed mislead the consumer.  They failed to show taxes and charges or to advertise the lowest fair prominently.  Common problems included headline prices failing to include taxes and charges, compulsory insurance purchases required and flights advertised as “free” which were not.  It is likely that 2008 will see a crackdown by consumer protection authorities against airlines for misleading websites.