Irish consumers have had a right, since 1st May 2007 (the date of the coming into force of the Consumer Protection Act 2007) to sue (for example), a tour operator, or an airline which “overbooks”, not only for breach of contract, but, under Section 74 of the Consumer Protection Act 2007, in tort;

74.- …(2) A consumer who is aggrieved by a prohibited act or practice shall have a right of action for relief by way of damages, including exemplary damages, against the following:

(a) any trader who commits or engages in the prohibited act or practice;

(b) if such trader is a body corporate, any director, manager, secretary or other officer of the trader, or a person who purported to act in any such capacity, who authorised or consented to the doing of the act or the engaging in of the practice.”

“Overbooking” involves the sale of more “product” than a trader can supply (usually on the principle that some consumers will cancel). The Consumer Protection Act 2007 describes the practice in Section 55 (1) (l):

making an invitation to purchase a product without disclosing the existence of any reasonable grounds the trader may have for believing that the trader will not be able to supply, or procure another trader to supply, the product or an equivalent product at the price specified in the invitation, or to do so for a reasonable period of time or in reasonable quantities, having regard to the scale of any marketing or advertising of the product and the price specified (bait advertising);”

Of course, the dispute may eventually turn on whether “an equivalent product” was offered and, if accepted, supplied, but that factual dispute should be readily settled by the experience of the consumer; the consumer need only prove by comparison the discrepancy between the description of what was offered and the description of what was delivered.

A not insignificant element of the right to sue under Section 74 is that the right is not constrained by any arbitration clause in the contract with the consumer. In short, the right to issue proceedings is not precluded by the terms of Section 5 of the Arbitration Act 1980.

Irish consumers intending to book a package holiday are covered by the Package Holidays and Travel Trade Act 1995.

(The Act was passed to comply with Ireland’s obligation to transpose European Union law into national law. In short, we have the EU to thank for the legislation.)

The Act serves one purpose, by two means. It is designed to secure proper service and facilities to consumers who have booked holidays with a tour operator. It does this by specifying the circumstances in which holidays are to be booked and the requirements on the tour operator to deliver the holiday as agreed. It makes a breache of the Act a criminal offence. It makes provision to imply certain terms in every consumer contract for the delivery of a package holiday:

18.—(1) In every contract the following terms are implied—

( a ) that, subject to section 17, where the organiser is compelled before departure to alter significantly an essential term of the contract, such as the price, the consumer will be notified as soon as possible in order to enable the consumer to take appropriate decisions and in particular to withdraw from the contract without penalty or to accept a variation to the contract specifying the alterations made and their impact on the price; and

( b ) that the consumer will inform the organiser or the retailer (as appropriate, in the light of the organiser’s instructions) of the decision as soon as possible.

(2) ( a ) The terms set out in paragraphs (b) and (c) shall be implied in every contract and shall apply where the consumer withdraws from the contract pursuant to the term in it implied by virtue of subsection (1) (a) or where the organiser, for any reason other than the fault of the consumer, cancels the package before the date when it is due to start.

( b ) The consumer is entitled—

(i) to take a replacement package of equivalent or superior quality if the organiser (whether directly or through a retailer) is able to offer such a replacement; or

(ii) to take a replacement package of lower quality if the organiser is able to offer such a replacement and to recover from the organiser the difference in price between that of the package purchased and the replacement package; or

(iii) to have repaid as soon as possible all the moneys paid under the contract.

( c ) The consumer is entitled, without prejudice to paragraph (b), to be compensated by the organiser for non-performance of the contract except where—

(i) the package is cancelled because the number of persons who agree to take it is less than the minimum number required and the consumer is informed of the cancellation, in writing, within the period prescribed in the contract, or

(ii) the package is cancelled by force majeure, that is to say the package is cancelled by reason of unusual and unforeseeable circumstances beyond the control of the organiser, the retailer or other supplier of services, the consequences of which could not have been avoided even if all due care had been exercised.

( d ) Overbooking shall not be regarded as a circumstance falling within paragraph (c) (ii).
Significant failure of performance after start of the package.

19.—(1) The terms set out in subsections (2) and (3) shall be implied in every contract and shall apply where, after departure, a significant proportion of the services contracted for is not provided, or the organiser becomes aware that a significant proportion of the services cannot be provided.

(2) The organiser shall make suitable alternative arrangements, at no extra cost to the consumer, for the continuation of the package and shall compensate the consumer for any difference between the services to be supplied under the contract and those actually supplied.

(3) If it is impossible to make arrangements as described in subsection (2), or these are not accepted by the consumer on reasonable grounds, the organiser shall, where homeward transport arrangements are a term of the contract, provide the consumer at no extra cost with equivalent transport back to the place of departure or to another place to which the consumer has agreed and shall compensate the consumer for the proportion of services not supplied.
Extent and financial limits of liability.

20.—(1) The organiser shall be liable to the consumer for the proper performance of the obligations under the contract, irrespective of whether such obligations are to be performed by the organiser, the retailer, or other suppliers of services but this shall not affect any remedy or right of action which the organiser may have against the retailer or those other suppliers of services.

(2) The organiser shall be liable to the consumer for any damage caused by the failure to perform the contract or the improper performance of the contract…”

The Act makes it a criminal offence for a tour operator to breach the terms of the Act. The prosecuting authority is the National Consumer Agency.

However, for an individual consumer, the relevance of the Act is the establishment of the clear obligations of a tour operator with regard to the delivery of the holiday.

Thus, even if a brochure purports to exclude a liability on the tour operator, either expressly or by implication, it will be ineffective.

Consequently, a consumer’s right to demand compensation for the breach of contract by a tour operator is made less problematic than it would otherwise be.

In practical terms, when the breach of contract is discovered by the consumer (usually in some foreign location) the tour operator has the upper hand; it can, through its representatives plead shock and surprise and profess to be “doing its best”. The consumer will feel helpless; he/she is not psychologically geared to manage the problems. It will appear inconceivable that the operator would not deliver what it is obliged to deliver and would try to pass off to the consumer a holiday or parts of a holiday at variance with what has been agreed.

Nevertheless, that is what sometimes happens. The reasons for the failure are, generally, irrelevant. They are the tour operator’s problem, not the consumer’s problem.

If variation is unavoidable the tour operator must deliver an equivalent service to that contracted for. That means that a consumer who contracted for a 5 star hotel must be accommodated in a 5 star hotel and any replacement accommodation must be equivalent in location to the original hotel. The contract, a copy of which must be given to the consumer will set out; the destination; the length of the holiday; the transport provided; departure times; departure location; location of accommodation and its features, including official rating if in EU; meal plan, if any; included excursions; details of taxes; cancellation provisions; complaints procedure.

The consumer should always complain to the tour operator’s representative and keep a copy of any written complaint. A diary of the events should also be kept.

On return home the consumer should write a complaint to the tour operator.

Although some contracts stipulate that disputes are to be referred to arbitration, where the facts permit it, it is possible to go to court for compensation.

McGarr Solicitors represented clients in the Dublin Circuit Court on 20th February 2009. The defendant was Panorama Holidays.

The Plaintiffs wished to take their honeymoon in Sharm El Sheikh in Egypt. Having booked, they were alarmed to receive reports that their hotel was being overbooked. They checked with Panorama and were reassured that was not the case. On arrival in Egypt they found it was the case and they were declined accommodation in the hotel contracted for.

The Panorama representative informed them of the overbooking in writing immediately on their arrival. Panorama had denied, immediately before departure, that overbooking had or would occur.

They were offered inferior accommodation in lieu. It was very noisy. Different alternative accommodation was offered which the clients discovered was several miles from the beach and in the middle of building sites.

Ultimately, while waiting to return home early, one client fell ill from the substandard food in their substandard accommodation. She had to call the doctor who put her on a drip in her hotel bedroom to treat her gastroenteritis.

The court awarded the following damages:

Wife; 5,500 Euros
Husband; 3,500 Euros
Special Damage; 800 Euros
Holiday cost; 1,805.60 Euros

The court awarded the plaintiffs their legal costs.

A blog is just a blog and is rarely definitive. I missed two elements of the post relating to the contamination of Irish pork products.

A. Irish farmers sell their pigs to factory processors; it is from the processor that the supermarket/retailer gets supplies. (So too, will a secondary processor such as a sausage maker). So, the retailers will have a claim against the processors; the processors will have claims against the farmers.

B. My post assumed delivery of the oil at its source. If delivery is at and to the Irish pig feed manufacturer in Ireland, Council Regulation 44/2001 will apply. Jurisdiction in those circumstances will be Ireland, not the place of the location of the supplier of the oil.

Details of the indemnity to the factory processors, by the Irish Government, are not to hand. Accounts suggest it is not a full indemnity. If so, the processors will be able to properly claim the balance from the farmers, who will in turn be able to make a claim against the pig feed supplier.

A sensible arrangement for the Government indemnity would have made provision for Ireland to be entitled to receive a proper portion of compensation recovered from farmers and/or the pig feed supplier.

A matter of great interest is the level of insurance cover of the farmers and the pig feed supplier. As always, the practicality of litigation is important.

Yet again we see the urgent necessity of legislation in Ireland to provide for Third Party rights under insurance and other contracts.

In the UK they have had that for 70 years and do not appear to have had any problems. What’s keeping us, (besides ineptness)?