The Chartered Trading Standards Institute Policy Report: Wish you were Here

Commercial analysis: The Chartered Trading Standards Institute (CTSI) has called for holiday protections and terms and conditions to be simplified to reduce confusion for consumers. Sarah Prager KC of Deka Chambers considers what the CTSI has called for, the current legal position and its difficulties and the future legislative framework.

What has the CTSI called for?

The Chartered Trading Standards Institute (CTSI) has conducted a survey and discovered that the vast majority of the general public doesn’t know what a linked travel arrangement (LTA) is or does— and 18% of them thought that they gained greater protection from booking an LTA than they would from booking a package holiday (whereas the opposite is in fact the case). Even after they were given the definition of an LTA, just over 73% of respondents said that they still found the difference between that and a package holiday ‘a bit confusing’, or that they ‘didn’t understand it at all’. LTA and package organisers have also expressed confusion about the status of the products they’re selling. The CTSI wants the government to act to simplify the legal framework relating to LTAs and packages and to the provision of information to consumers, and has called for:

• The simplification of the wording and information provided to consumers by travel organisers – to include information about a holiday, information needed prior to or during a holiday, and information regarding liability and protection of money;
• Reform of the Package Travel and Linked Travel Arrangements Regulations 2018 (the 2018 Package Travel Regs), SI 2018/634
• Clear warnings to consumers when no financial protection is provided.

For more, see: CTSI calls for Package Travel review and Linked Travel Arrangement Regulations, LNB News 02/06/2023 56.

2. What is the current legal position in the UK in regard to LTAs and package holidays?

The 2018 Package Travel Regs draw a distinction between those holidays booked as packages and those booked as linked travel arrangements, defined in the 2018 Package Travel Regs, SI 2018/634, reg 2 as follows:

• ‘…(3) In these Regulations, subject to paragraph (4), a “linked travel arrangement” means at least two different types of travel service purchased for the purpose of the same trip or holiday, not constituting a package, resulting in the conclusion of separate contracts with the individual service providers, if a trader facilitates—
  (a) on the occasion of a single visit to, or contact with, a trader’s point of sale, the separate selection and separate payment of each travel service by travellers; or
  (b) in a targeted manner, the procurement of at least one additional travel service from another trader where a contract with such other trader is concluded at the latest 24 hours after the confirmation of the booking of the first travel service.
  
• (4) Where—
  (a) not more than one travel service of the kind listed in paragraph (a), (b) or (c) of the definition of “travel service”, and
  (b) one or more tourist services of the kind listed in paragraph (d) of that definition,
  
  are purchased, those services do not constitute a linked travel arrangement if the tourist services referred to in sub-paragraph (b) do not account for a significant proportion of the combined value of the services and are not advertised as, and do not otherwise represent, an essential feature of the trip or holiday.’
  

Importantly, although the trader owes various duties in relation to linked travel arrangements, 2018
Package Travel Regs, SI 2018/634, reg 15, which imposes liability on the organiser for the proper performance of the contract, applies only to package holidays.

The Department for Business, Energy & Industrial Strategy (now subsumed by the Department for Business and Trade) produced a Guidance for businesses on the application of the LTA which provides helpful information on LTAs and package holidays.

What are the difficulties with the current legislative framework?

The problem identified by the CTSI has been well known to practitioners working in this field since the inception of the Regulations. Consumers, when booking holidays, do not have in mind the minutiae of the regulatory framework, which is simply too complex to be readily understood. Traders owe a duty to explain consumers’ rights and obligations to them prior to the conclusion of the holiday contract, but the range of possible arrangements and their various consequences is so wide that it is difficult for them to comply with this duty, particularly when (as the same survey also found) most consumers do not trouble to read providers’ terms and conditions, believing that it is unnecessary to do so. As a result, a significant number of holidaymakers are taking unprotected or less protected holidays, whilst believing erroneously that they have the full protection of the Regulations. Furthermore, the dividing line between linked travel arrangements and package holidays remains unclear, and the precise consequences of falling on one or other side of that line are also controversial. To this extent the well intentioned provisions of the Regulations have not really provided the consumer protection anticipated, but have instead rendered the legal framework more confusing than it was before.

What will the planned review of the Package Travel and Linked Travel Arrangement Regulations 2018 consider?

The CTSI intends to open a dialogue with government to review the LTA, seeking a simplified approach and clarification on the definition of what an LTA is. It is proposed that it will be made clearer to consumers whether they are booking unprotected, partially protected or fully protected holidays respectively. This will require traders to overhaul the way they sell holidays and to reconsider their terms and conditions, as well as to identify in every case with a high level of certainty the nature of the holiday sold. This may be difficult in cases where holidays are sold dynamically; but the intention of the review is that the entire regime will be simplified so that it can be done more effectively than at present.

This analysis was first published on Lexis+® UK on 17 July 2023 and can be found here (subscription
required).