THE IMPACT ON TRAVEL CLAIMS AND LITIGATION IN THE UK 315 encouraging holidaymakers to accept vouchers instead of immediate refunds, but stopping short of legislating to allow travel firms not to offer refunds at all. Many travel firms, such as Loveholidays, which says it is one of the fastest-growing travel agents in the UK, have already declined to provide refunds to customers for cancelled trips, instead offering vouchers or alternative dates. There is concern within the industry that the compensation bill for the pandemic could push a number of firms into insolvency, precipitating a call on the taxpayer to meet the inevitable ATOL shortfall. This prospect, coupled with the accompanying loss of jobs and otherwise-viable businesses, has prompted calls for legislative change so as to allow tour operators longer than the current 14 days from cancellation, in which to refund customers’ money in full. Proposals include extending this refund period to months or allowing travel firms to issue credit notes. The difficulty with these proposals is that the underlying EU directive (which continues to bind the UK, despite Brexit) requires that the UK ensure travellers are entitled to appropriate compensation from organisers and that such compensation shall be made without undue delay. Some European Member States have already legislated to provide tour operators and other retailers with the choice of providing a refund or credit note, but it is difficult to square any legislation, allowing the industry to provide credit notes instead of refunds with the states’ obligations under the underlying Directive. The World Travel and Tourism Council is predicting that the industry could shrink by 25% in 2020, with the loss of 50 million jobs worldwide, and small and medium-sized companies in particular simply do not have the cash available to refund the thousands of cancelled holidays currently caught in legal limbo. The industry has, therefore, lobbied the UK government to intervene to support the travel industry financially, as it has done more broadly in providing unprecedented financial support to most industries and workers disrupted by the pandemic. Unlike the governments of other Member States, however, the UK government has proven resistant to this proposal. Early on in the outbreak, the Italian government enacted legislation to amend the right to a refund under the Italian Package Travel Regulations; on 3 April, the German government proposed a similar amendment. As more and more European Member States sought to amend their domestic Regulations, the Association of British Travel Agents criticised the UK government for failing to act fast enough to avoid what it feared would be ‘catastrophic damage to the UK travel industry and widespread consumer detriment’. On 23 March, the government announced its intention to act, but it then appeared to change its mind, stating that it was for the European Commission to amend the underlying Directives.
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