Our dispute resolution solicitor, Jonothan Broadbent took part in the recent Law Society #SolicitorChat Q&A session to answer common questions raised surrounding Consumer Law and cancelled holidays as a result of the coronavirus pandemic. Jonothan reviews what rights you have if you have had a holiday cancelled, government guidance for travel and top tips for clients who are concerned about cancelling their holiday plans.
Q1. Based on the current Government guidelines, are people still able to go on holiday this year?
Based on the Government guidelines currently in force it is difficult to go on foreign holidays. On 23 June 2020, the Government announced that we are now allowed to stay overnight, from 4 July, at a place that is not our home, including hotels and bed and breakfasts. A short holiday in England is therefore likely to be possible (but beware that Wales, Ireland and Scotland have different rules if you intend to travel there). However, the Foreign Office is still advising against all non-essential foreign travel. This is important because your travel insurance policy will likely be invalidated if you travel against the Foreign Office’s advice. This may change in the coming weeks as the world starts to open up more fully.
**Please note travel guidance is being constantly updated and we suggest that you review Government guidelines and Foreign Office advice before making holiday plans.
Q2. What rights to a refund or rebooking do people have when cancelling a package holiday due to a pandemic? How do these differ to independent bookings?
If your package holiday has been cancelled by the operator then you have the right to a full refund, and the Association of British Travel Agents (Abta) agrees. However, due to the sheer volume of refund requests, this may take longer than the normal 14 statutory days. Similarly, if you have booked a flight independently and your airline has officially cancelled that flight, then you have the right to a full refund. Most airlines are offering vouchers instead of refunds, and it is your choice to accept a voucher or get a full refund. You do not have to accept the voucher. Beware that if you accept a voucher and the airline later goes bust, you may not be able to use the voucher.
The tricky situation comes when your package holiday, or your flight, is in July, August or later and it has not yet been officially cancelled. Most holiday operators and airlines are assuming that we will be allowed to go on holiday soon, and therefore they are being careful about how many flights and package holidays they officially cancel. If they have not cancelled your package or flight, whether you have the right to a refund if you cancel it yourself will depend on the terms and conditions of the package or flight booking, or your insurance policy wording.
Q3. Is travel insurance still valid and does it protect people against cancellations in the coronavirus pandemic?
If your package holiday or flight has been cancelled by the operator, then you will usually not need to use your insurance as you have the right to a refund from the operator itself (see question 2). However, if you have booked your whole holiday independently, then other costs such as hotels and car hire etc may not be automatically refundable. In that case, your only recourse may be to your insurance policy. You will need to check carefully the wording of your own policy, as there are hundreds of different travel/holiday insurance policies out there and each insurance company is treating Coronavirus differently. This is especially true if you have decided to cancel your holiday yourself (your flight, hotel or car hire has not been cancelled by the operator yet), because insurance companies may assume that your August holiday, for example, will still go ahead. You may only be allowed to start a claim 48 hours before your scheduled leaving date. You must check with your insurance company first before deciding what to do.
If you paid for your holiday on a credit card (not a debit card) then you may have further protection through your credit card provider under chargeback or “Section 75” rules. However, you will need to check with your credit card provider to see if your particular circumstances are covered.
Be careful about going on holiday while the Government currently is not allowing all non-essential travel. Your insurance policy may be invalid if you ignore the Government guidelines against travel. Also, be very careful if you are thinking of booking a new holiday now and taking out a new insurance policy for it – most insurers now consider Coronavirus to be a “known risk” and therefore your insurance policy may not cover you for anything that happens to you while on holiday, including medical and accident cover.
Q4. If an airline goes bust, what rights do people have to reclaim money spent?
If you booked your holiday through a travel agent it would almost certainly be “Atol protected” and therefore if the airline goes bust you will be entitled to a refund or a rebooking on an alternative flight. Of course, if your travel agent also goes bust then the situation becomes more complicated. If you booked your flight independently and the airline goes bust, then you would normally not have any right to a refund and would normally have to join the queue of “creditors” for an insolvent company. You may be able to use the “Section 75” or chargeback rules if you booked your flight using a credit card – speak to your credit card company first. Unfortunately, it would be unlikely that your insurance policy would cover you if the airline went bust as insurance policies do not usually include cover for insolvency. You should still check your policy, however, as your particular policy may provide cover.
Q5. What top tips would you give to someone concerned about cancelling their holiday due to the pandemic?
- Has the airline or package holiday operator cancelled your holiday or flight? You would be due a full refund.
- Is your flight or package holiday currently unaffected (i.e. not yet officially cancelled)? Check your insurance policy, check with your travel agent and check your flight booking; the wording of the terms and conditions of all/any of those will either allow you or disallow you from cancelling it yourself and getting a refund.
- You could wait until much closer to the time of your departure, as your flight or holiday may be cancelled by the operator in the future, and therefore you would be due a full refund. This is obviously risky – if the Coronavirus situation changes and the world opens up, your operator may not cancel your flight or holiday and you may have missed your chance to cancel it yourself.
- It is probably financially unwise to book any new holidays at this time. If you do, you need to check very carefully whether you can cancel in the future due to Coronavirus and get a refund. You may also not be able to buy an insurance policy as a lot of travel insurance providers have simply stopped selling policies or have completely changed their policies so that travel during Coronavirus is not covered. This is critically important for medical and accident cover while abroad during Coronavirus.
If you have any further questions regarding consumer law or cancelled holidays, or you would like to speak to a member of the Dispute resolution team please call 01603 598000 or email firstname.lastname@example.org and a member of the team will contact you.
*The information provided in this article is designed to provide useful information on the subject, not to provide specific legal advice.