Ski Team4 v Governors of St John Fisher & St Thomas More Catholic High School, Holy Cross Catholic School Governors: The Latest Salvo in the School Trip Cancellation Wars

Articles

05/07/2024

Readers will be aware from previous briefings of the ongoing litigation between various schools, insurers, and travel companies regarding the cancellation of numerous school trips in 2020 and 2021 due to the Covid-19 pandemic and the measures taken to contain it.

In a recent decision Her Honour Judge Beech considered claims made by a school trip provider against two schools seeking payment of cancellation fees; the schools counterclaimed for repayment of their deposits. It is safe to say that this is one of those situations in which the claimant may well wish they had never embarked upon the litigation.

The facts

The facts of this case will be familiar to all practitioners working in this area. The Claimant school trip provider had contracted with the two schools to provide ski trips in Austria departing 26th March 2021 and 12th February 2021 respectively, and had taken deposits against the total cost of the trips. The first school cancelled its trip on 13th January 2021, two days before the balance of the contract price was due and ten weeks before the trip was due to commence; the second school cancelled on 11th December 2020, the day on which the final payment was due, and nine weeks before its trip was due to commence.

Pursuant to paragraph 9.5 of Team4’s terms and conditions, the first school’s cancellation attracted a cancellation charge of 50% of the price of the trips. It therefore sued for that sum; the school counterclaimed for the deposits it had already paid. Pursuant to paragraph 7.9, the second school’s cancellation gave rise to a liability to reimburse Team4 for any additional costs incurred by them in organising the holiday, and they sued for the total sum of the holiday price; the school counterclaimed in respect of the deposits paid.

The legal issues: did the Package Travel and Linked Travel Arrangements Regulations 2018 apply?

The first legal question for the court to decide was whether the Package Travel and Linked Travel Arrangements Regulations 2018 applied to the school trips at all. Amongst the cornucopia of potential bases for the submission that they did not, Team4 settled upon the argument that Regulation 3(2)(c) was engaged, with the effect that the Regulations were disapplied. Regulation 3(2)(c) states as follows:

These Regulations do not apply to—

(c) packages and linked travel arrangements purchased on the basis of a general agreement.

(3) In paragraph (2)(c), a “general agreement” means an agreement which is concluded between a trader and another person acting for a trade, business, craft or profession, for the purpose of booking travel arrangements in connection with that trade, business, craft or profession.

Team4 submitted that the holiday agreements were made between them and individual teachers at the school acting in pursuance of their profession, therefore that they were ‘general agreements’ within the meaning of the Regulations.

The court did not agree. The judge derived interpretive assistance from Directive (EU) 2015/2302, from which the Regulations are derived, Recital 7 of which states:

The majority of travellers buying packages or linked travel arrangements are consumers within the meaning of Union consumer law. At the same time, it is not always easy to distinguish between consumers and representatives of small businesses or professionals who book trips related to their business or profession through the same booking channels as consumers. Such travellers often require a similar level of protection. In contrast, there are companies or organisations that make travel arrangements on the basis of a general agreement, often concluded for numerous travel arrangements for a specified period, for instance with a travel agency. The latter type of travel arrangement does not require the level of protection designed for consumers. Therefore, this Directive should apply to business travellers, including members of liberal professions, or self-employed or other natural persons, where they do not make travel arrangements on the basis of a general agreement. In order to avoid confusion with the definition of the term ‘consumer’ used in other Union legislation, persons protected under this Directive should be referred to as ‘travellers’.

The judge concluded:

The term “general agreement” should be construed narrowly as a wide interpretation would have the effect of reducing the class of travellers entitled to consumer protection. This is particularly important in the case of schools. The definition of “traveller” is found in reg.2 of the PTRs:

“traveller” means any individual who is seeking to conclude a contract, or is entitled to travel on the basis of a contract concluded, within the scope of these Regulations”;

The children who were booked to travel under the school contracts were clearly “travellers” as they were entitled to travel on the basis of the contracts concluded. It would be perverse to interpret “general agreement” so as to exclude school children from that class of traveller entitled to protection.

Moreover, a one-off contract between a trader and a school, albeit upon the basis of the standard terms and conditions of the trader, cannot be characterised as a ‘general agreement’ for these purposes. Furthermore, although the teachers were professionals, in entering into the holiday contracts they were acting on behalf of schools, which are not traders, businesses or professionals, affording a further reason why Regulation 3(2) was not engaged.

Team4’s ambitious argument that the Regulations should not apply at all therefore failed.

As a footnote which may be of interest to practitioners conducting similar claims:

Team4 produced a letter written to a firm of solicitors by Kennedys on behalf of the School Travel Forum (“STF”) which is a trade association representing the interests of providers of school trips. The letter concerned AIG Subrogated Travel Insurance Claims. It is clear that the advice given by Kennedys to the STF is that the regulations apply to school trips but a restrictive interpretation of reg.12(7) is applied… This is the advice that has been given to Team4 by the STF and has been followed by Team4. What the advice does not say is that “the PTRs do not apply because contracts entered into by teachers for school trips fall within the definition of reg.3(3) being general agreements”. Likewise, a Guidance Note produced by Team4 from the STF (SB9) dated 27th February 2020 makes it clear that the PTRs apply to school trips.

Although not binding, of course, this advice may be of forensic value to those acting against STF in future cases.

The legal issues: interpretation of Regulations 11 and 12

Readers will no doubt be only too familiar with the provisions of the Regulations relating to cancellation of holidays, but for convenience they are set out below. Regulation 11 states:

(1) The provisions of this regulation are implied as a term in every package travel contract.

(2) The organiser must not unilaterally change the terms of a package travel contract before the start of the package, other than the price in accordance with regulation 10, unless—

(a) the contract allows the organiser to make such changes;

(b) the change is insignificant; and

(c) the organiser informs the traveller of the change in a clear, comprehensible and prominent manner on a durable medium.

(3) Paragraphs (4) to (11) apply where, before the start of the package, the organiser—

(a) is constrained by circumstances beyond the control of the organiser to alter significantly any of the main characteristics of the travel services specified in paragraphs 1 to 10 of Schedule 1…

(4) The organiser must, without undue delay, inform the traveller in a clear, comprehensible and prominent manner on a durable medium, of— 

(a) the proposed changes referred to in paragraph (3)…

(5) The traveller may, within a reasonable period specified by the organiser—

(a) accept the proposed changes; or

(b) terminate the contract without paying a termination fee…

(7) Where—

(a) the changes to the package travel contract referred to in paragraph (3), or

(b) the substitute package referred to in paragraph (6), result in a package of lower quality or cost, the traveller is entitled to an appropriate price reduction.

(8) Where— 

(a) the traveller terminates the contract pursuant to paragraph (5)(b), and 

(b) the traveller does not accept a substitute package, the organiser must refund all payments made by or on behalf of the traveller without undue delay and in any event not later than 14 days after the contract is terminated.

Team4 relied on the decision in Lambert v Travelsphere Limited, unreported, 1st September 2004 in support of the proposition that where there remains a flicker of hope that a trip can go ahead, the provider is not constrained to alter the travel arrangements, and the traveller is not permitted to cancel without penalty. The High Court in Sherman v Reader Offers Limited [2023] EWHC 524 (KB) had declined to follow Lambert, but (disappointingly) the judge does not seem to have been made aware of this fact.

In any event, Regulation 12 states:

(1) The provisions of this regulation are implied as a term in every package travel contract.

(2) A traveller may terminate the package travel contract at any time before the start of the package.

(3) Where the traveller terminates the package travel contract under paragraph (2), the traveller may be required to pay an appropriate and justifiable termination fee to the organiser…

(7) Notwithstanding paragraphs (2) to (6), in the event of unavoidable and extraordinary circumstances occurring at the place of destination or its immediate vicinity and which significantly affect—

(a) the performance of the package, or 

(b) the carriage of passengers to the destination, the traveller may terminate the package travel contract before the start of the package without paying any termination fee.

(8) Where the package travel contract is terminated under paragraph (7), the traveller is entitled to a full refund of any payments made for the package but is not entitled to additional compensation.

It was accepted by Team4 that both school trips could not have gone ahead at the time of departure because of the Covid-19 pandemic restrictions. However, they asserted that at the time of termination, neither school was in a position to conclude for certain that the trips would not or could not go ahead, and they were therefore not entitled to cancel without penalty.

The judge had no difficulty in finding that the incidence of Covid-19 at the place of destination constituted unavoidable and extraordinary circumstances giving rise to a right to cancel the trips without penalty. She turned her mind to the consequences of the pandemic at the time of cancellation:

So, what were the consequences of the pandemic? Well, at the dates of termination (11th December 2020 and 13th January 2021) the prospect of the trips going ahead were vanishingly small (as proved to be the case as it was impossible for either trip to go ahead) and the Court makes that determination whilst also accepting that there was a degree of ebb and flow in the pandemic restrictions even to the extent of foreign travel being permitted for a short period during the summer of 2020. At the time with which we are concerned, the position in the UK was that travel abroad was prohibited and that continued to be the case at the time when the trips were due to take place for both schools and beyond to at least May 2021 save for a small number of permitted reasons (SB189). A holiday was not a permitted reason. The advice of the Foreign and Commonwealth Office (FCO) was that schools should not travel (confirmed by Sandra Bird in x-ex and in the email of Rt Hon Nick Gibb MP dated 1st March 2021 (TB58)). Moreover, the guidance from the Department for Education (“DfE”) was also that schools should not travel…

In the case of Austria (see TB238 & 244), a second wave of COVID-19 infection “hit” the country in the Autumn of 2020. On 5th November 2020, the Corona traffic light system which operated in Austria was switched to red (very high risk) and on 17th November 2020, a hard lockdown was implemented with a 24-hour curfew and all but essential shops were closed. On 7th December 2020, the lockdown was eased but on 19th December 2020 (after HC had terminated their contract), flights from the UK were banned because of a new, highly contagious mutation of the virus spreading in the UK. There was some easing of restrictions over Christmas (as was the case in the UK) but on 26th December 2020, the third lockdown came into effect. Despite that, ski resorts were allowed to open giving rise to numerous debates about the risk of infection at the resorts. Of course, UK citizens were not able to travel to Austria or enter the country.

Taking these circumstances as a whole, clearly the holidays could not go ahead at the time of cancellation.

The legal issues: when does the right to cancel arise?

The only remaining issue, therefore, was whether the schools had a right to cancel some weeks in advance of the departure dates, or whether they ought to have waited until nearer the time to exercise those rights, which it was agreed they would have had by that time. Interestingly, although reminding herself that these cases are fact sensitive, the judge commented that there is a distinction in this respect between school trips and other holidays:

The timing of a contract termination which will fall within reg.12(7), will very much depend upon the circumstances of the case and in particular, the type of holiday and its length, the status of the travellers and the nature and severity of the unavoidable and extraordinary circumstances relied upon. What is reasonable in terms of timing in one case may not be in another. A straightforward summer package holiday for a family of four will have very different considerations to a school ski trip which necessarily involves parents relinquishing parental responsibility for the safety and wellbeing of the children to teachers during the duration of that trip and the need to satisfy the relevant educational bodies that the trip should go ahead.

In fact, there was evidence that the teachers organising the trips had been criticised (quite strongly) by some parents for not cancelling earlier.

The judge hammered the final nail into the coffin of the flicker of hope test already dispatched by Her Honour Judge Collins Rice in Sherman:

Whatever the holiday, the circumstances of the traveller and the unavoidable and extraordinary circumstances relied upon, it will inevitably be the case that the travellers must look to the future when making a decision under reg.12(7). There is nothing in reg.12(7) which expresses or infers any constraint as to the timing of the termination and certainly nothing that imports into it the “flicker of hope” test determined by HHJ Darrach when considering a different provision…

The Court concludes that if there comes a stage either eight weeks or ten weeks or longer before departure when a reasonably intelligent individual with common sense concludes that there is no reasonable prospect of the trip going ahead or if it does, it will be significantly different to that contemplated or contracted for, a traveller should not be expected to wait two days before travel to exercise their right to terminate just in case something changes.

The court concluded, perhaps inevitably, that the schools had a right to cancel the trips when they did, and that they were entitled pursuant to Regulation 12(8) to repayment of all sums paid under the holiday contracts.

Comment

As well as laying to rest any possibility that the flicker of hope test proposed in Lambert v Travelsphere might survive the pandemic, the careful judgment in this case is an indicator of the approach likely to be taken by judges hearing these claims. First and foremost, the Regulations are intended to provide consumers with protection, and particularly in conditions such as the pandemic. Time and again we have seen judges grappling with submissions to the effect that schools, teachers and children should not be afforded this protection, and firmly rejecting the proposition. It is now clear that attempts to use the Regulations against schools are overwhelmingly likely to fail; and that claims brought by schools in respect of Covid cancellations are likely to succeed.

About the Author

Called to the Bar in 1997, Sarah Prager KC has been listed in the legal directories as a Band 1 practitioner in travel law for many years, and, more recently, listed in aviation as well. Together with her colleagues at Deka Chambers, Matthew Chapman KC, Jack Harding, Dominique Smith, Tom Yarrow and Henk Soede, she co-writes the leading legal textbook in the area, and has been involved in most of the leading cases in the field in the last decade. She undertakes purely domestic high value personal injury work as well as cross border work and has a wealth of experience of difficult and sensitive cases.

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Sarah Prager KC

Call 1997 | Silk 2023

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