CAA calls for urgent ATOL reform after losing legal battle

Swift reform of ATOL regulations is now vital to protect holidaymakers, says the Civil Aviation Authority after losing the final round in its long-running legal battle against online travel firm Travel Republic.

The Supreme Court yesterday refused to hear the CAA’s appeal against a High Court ruling that stated Travel Republic was not flouting the law by selling unlicensed package holidays.

In a statement, the CAA said: "This decision now leaves a large number of holidaymakers at risk in the event of a travel organiser failing.

"The CAA is therefore urging the Government to move quickly to reform the ATOL scheme and introduce the proposed ‘Flight Plus’ financial protection in order to restore cover to consumers who may wrongly believe that they are currently financially protected."

The CAA began legal action against Travel Republic last year over an alleged breach of ATOL regulations, but the online travel company was cleared by Westminster Magistrates Court and later by the High Court.

The CAA said: "The case covered an important point of law…to provide clarity for consumers and the travel industry about the definition of a package holiday.

 "The CAA is disappointed that the Supreme Court has not been prepared to consider it, given its impact on consumer protection."

 CAA director of consumer protection Richard Jackson added: “Over the past year we have been working with the DfT on proposals to reform the ATOL scheme, and we very much welcome the Secretary of State’s recent statement that he sees the need for reform.

"Unfortunately, today’s decision means that much-needed clarity will now not be provided through the Courts, making it more urgent to push ahead to reform the scheme, ensuring that people receive the protection they expect, and often incorrectly believe they are receiving.

 "Recent failures, including that of Goldtrail only a fortnight ago, have highlighted that there is widespread confusion amongst the travelling public and the travel industry about when they are, and are not, protected by ATOL.

 "Today’s decision means that the sole avenue now open to minimise that confusion is reform of the scheme."

 Travel Republic managing director Kane Pirie denied the court’s decision left a grey area in consumer protection.

 He said: “The robust and unequivocal High Court decision earlier this year now offers the industry and its regulator undeniable clarity as to how to properly interpret the ATOL regulations and we trust it will be welcomed as such."

By Linsey McNeill