The Court of Appeal has made a pivotal ruling on consumer refunds under the Package Travel Regulations (PTRs).
- The ruling pertains to the High Court case involving Sherman vs Reader Offers Ltd about package holiday contracts.
- Mr and Mrs Sherman booked a cruise, but sea ice diverted the itinerary, leading to their refund claim.
- The High Court initially sided with the Shermans, citing the itinerary as a contractual term, but the ruling was later overturned.
- The case underscores legal intricacies in travel contract formation and has wider implications for the industry.
In a landmark decision, the Court of Appeal addressed the High Court’s ruling on consumer refunds concerning the Package Travel Regulations (PTRs), impacting travel organisers and cruise lines alike. This case involved Mr and Mrs Sherman, who booked a Hurtigruten ‘Northwest Passage’ cruise through Reader Offers Ltd. Originally set for September 2018, the cruise itinerary was altered due to sea ice, with the voyage mainly traversing around Greenland. The Shermans pursued a refund based on the 1992 PTRs, relevant to bookings made in 2017, but a County Court initially ruled against them.
Their appeal argued that the itinerary sent post-booking was part of the contract, swaying the High Court to accept this reasoning and ruling in their favour, affirming the itinerary as a binding term. The legal implications were far-reaching, suggesting that travel contracts are not formed at the point of sale but upon the provision of full details, obligating companies to adhere strictly to advertised itineraries unless clear disclaimers are made.
Reader Offers, backed by Hurtigruten, challenged this interpretation, leading the Appeal Court to reverse the High Court’s verdict while still ruling in favour of the Shermans. According to Travlaw’s senior counsel, Stephen Mason, “The appeal hinged on establishing that the contract was valid the moment the Shermans paid a deposit and received an Atol Certificate, marking contract formation at this point rather than upon receiving the detailed itinerary.”
The Court of Appeal also highlighted a technicality within ROL’s booking terms, which inadvertently supported the Shermans’ entitlement to a refund. Mason noted, “This decision prevents a scenario where minor discrepancies in advertised information might allow consumers to contest the existence of a contract.” Mason commended the companies involved for their resolve in pursuing these legal nuances, emphasising how the outcome benefits the broader travel industry by clarifying contract formation timelines.
A spokesperson for Reader Offers acknowledged the Court of Appeal’s decisions, noting that while they succeeded on major legal points, other grounds of appeal did not favour them. Despite the setback, the company expressed regret over the Shermans’ disrupted travel plans due to unforeseen icy conditions and underscored their commitment to prioritising customer satisfaction. “As a company, we strive to put the needs of our customers first,” the spokesperson stated, reflecting on the balance between strict regulatory compliance and customer service.
The Appeal Court’s decision not only clarifies the nuances of travel contract formation but also marks a significant precedent for future industry practices.
