Thursday, 16 February 2012

Money back guaranteed regardless the reason for travel organiser's insolvency - CJEU in Blödel-Pawlik (C-134/11)

16 February 2012: CJEU judgement in Blödel-Pawlik case (C-134/11)

Imagine you book a package travel for you and your partner. Before you trip commences, you receive a notice from the travel agency that they are declaring insolvency. What happens then? According to Art. 7 of the Package Travel Directive you should have no problem getting your money back, since the travel agency needs to be insured against insolvency.

This wasn't so easy for Mr Blödel-Pawlik. Even though the travel agency he used took out insurance against insolvency and provided him with two notices of guarantee, confirming that the cost of the trip would be refunded if the travel agency became insolvent, he still had problems with getting reimbursed. The reason for this was that it was clear that the travel agency never really intended to organise the trip in question. It was fraudulent conduct on its part to offer organisation of this trip for which the insurance company did not want to take responsibility towards consumers. The question asked to the CJEU was whether Art. 7 of the Package Travel Directive should be interpreted as intending to protect consumers also against fraudulent intent of travel organisers.

The CJEU answered: yes. The purpose of Art. 7 is to protect consumers against the financial risks arising from the insolvency of package travel organisers, which means that the refund of consumer's money has to be guaranteed. (Par. 19-20) There is no extra condition added to the provision of Art. 7 as far as the reason for travel organiser's insolvency is concerned. (Par. 21) This means that:

"facts such as imprudent conduct on the part of the travel organiser or the occurrence of exceptional or unforeseeable events cannot constitute an obstacle to the refund of money paid over or to the repatriation of consumers under Article 7 of Directive 90/314" (Par. 23)

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