Insolvency of the organizer - EuGH strengthened the rights of package travelers
The European Court of Justice (EuGH) in Luxembourg strengthened the hope of consumers and consumers in certain cases to get money back after the insolvency of their travel organizer. The EuGH decided that an insurance against the insolvency of an organizer also applies in cases where the consumer withdraws from the trip due to "unavoidable and exceptional circumstances" after the organizer's insolvency.
There is no reason to treat travellers whose holiday is cancelled because the organizer is bankrupt differently from travellers who withdraw from their trip due to "unavoidable and exceptional circumstances". EU law provides that a consumer who does not start a package tour due to "unavoidable and exceptional circumstances" has a claim for full reimbursement.
The background of the judgment are cases from Belgium and Austria - in both cases, the plaintiffs had withdrawn from their planned trips for 2020 due to the Covid-pandemic. Shortly thereafter, the travel organizer went bankrupt. In the Austrian case, the consumers then sued HDI, the insurer of the travel organizer. HDI argued before the court that they did not have to pay out, as the trip was cancelled due to Corona and not due to insolvency. The EuGH did not follow this argument. HDI has not commented on the current judgment yet.
In both cases, national courts must now make a final decision and take the EuGH judgment into account. According to EU law, the Member States are required to ensure that package tour consumers are fully protected before the insolvency of the organizer.
- This ruling by the EuGH in Luxembourg could potentially impact the journey of many Tourism industry consumers, especially in light of the ongoing Coronavirus pandemic.
- The decision strengthens the rights of consumers in Europe, including those in Austria, to seek compensation from insurers in cases of insolvency, even when they have withdrawn from trips due to "unavoidable and exceptional circumstances."
- The EU, recognizing the significance of leisure activities like travel, has made it clear that travel organizers must provide adequate insurance coverage to protect consumers against insolvency risks.
- The EU's stance indicates a commitment to supporting and safeguarding the interests of consumers in the context of the complex and ever-evolving landscape of Europe's tourism sector.
- HDI, as the insurer in the Austrian case, may have to reconsider its stance in light of the EuGH judgment, likely leading to changes in its insurance policies and claims processing procedures.
- The judgment could set a precedent that other European courts might follow, ultimately leading to improved protection for consumers in the event of travel organizer insolvencies.
