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JULY 2011

Of the millions of Britons who, filled with optimism, embark on a holiday this summer a small but significant minority will return home deeply disappointed.  For some their disappointment will spring from bad weather or from simple misfortune.  For others the problem will stem from an unwise choice in terms of accommodation, location or both.  Frequently the source of disgruntlement can be attributed to the choice of travelling companions but, short of filing for divorce or putting one’s children up for adoption soon after clearing immigration at Gatwick, these sources of holiday suffering are incapable of legal remedy.

But what if the problem is neither self inflicted nor down to bad luck but, instead, flows from the failings of the holiday provider?  Does the law provide compensation for this and, if so, what is the likely measure of damages?

This article is not intended to be read as an adjunct to a holiday complainants’ charter.  Neither is it intended to give encouragement to involving the law, less still your lawyer, in disappointments of a trivial or marginal nature.  “De minimis non curat lex” was the applicable adage until Latin was all but banned from legal practice a decade ago (sending scores of senior lawyers into early retirement and triggering a boom in property prices in Bexhill-on-Sea).  The sentiment conveyed by the Latin maxim is that the law does not concern itself with small things.   Some traditionalists prefer the translation “trifles” (for small things) not because of its greater accuracy, but because of the punning opportunities it offers to lawyers when attending children’s parties.

In a “spoilt” holiday context, the underlying message is that if the cause for complaint is highly subjective/marginal/nebulous or downright contrived, then the dispute should not be thrust into the legal arena.  It is better forgotten or consigned to experience or enhanced into an anecdote with which to amuse one’s friends.

But the right to be compensated applies not only to “ruined” holidays but to holidays which fall materially short of the holidaymakers’ reasonable expectations.  Whether and to what degree a legally actionable “shortfall” exists is identified largely by reference to considerations such as the cost of the holiday and how it was sold in the brochure or on the website, and then viewed against what was actually provided.  If there is a serious deficit between the two, then a right to compensation will often arise.   There are three main components:

Diminution in value

This attempts the difficult task of placing a monetary value on the difference between what you paid for and what you received.  Often some components of an otherwise  disappointing holiday will have been delivered to an acceptable standard.  But other components will have been sub-standard and others may have been missing altogether.  In practical terms, compensation is likely to be based on what percentage of the total cost of the holiday might fairly be attributed to the missing or sub-standard elements.  Repeatedly the courts have taken a conservative approach to this task resulting in many claimants feeling that they have been under-compensated.  Hence my cautionary note regarding the pursuit of highly subjective or marginal claims.

Damages for inconvenience, distress and disappointment

Self evidently this is an area which is not really susceptible to precise measurement in financial terms.  Nevertheless the courts have attempted to construct a framework for compensation to be assessed.  Under the Court of Appeal’s guidance in Milner – v – Carnival Plc an award of compensation of £2000 for the distress, disappointment and inconvenience of a badly sub-standard family holiday would be seen as “exceptional” and therefore representing the higher end of the scale.  Similarly an award of £4000 (per person) for a ruined honeymoon or holiday of a lifetime would be considered “top end” in these types of cases.  Therefore in more run of the mill cases, one can extrapolate that the level of recompense for distress etc is more likely to be expressed in awards of hundreds rather than thousands of pounds.  The sums recoverable are consequently modest by modern standards.  It is important to note that this category of compensation is not to be confused with damages available to those who, whilst on holiday, are injured or fall ill due to the negligence of the tour company or holiday provider.  These situations, both as to liability and the quantification of damages, are dealt with under separate legal principles. 

Out of Pocket Expenses

If as a consequence of the holiday company’s shortcomings (including the shortcomings of any supplier for which the holiday company is legally responsible), you are forced to incur additional expenditure such as the cost of alternative accommodation or travel, then this too will be recoverable so long as the expenditure is reasonably incurred.  In determining this, the court will have regard to the attempts made by the holiday company in trying to resolve the problem and whether the consumer responded reasonably to those attempts.  This is partly connected to the obligation of claimants in contract-based claims to take reasonable steps to mitigate their losses. 

When disappointment strikes: some practical considerations

i. Try to be reasonable both in your expectations and in your response to adversity.

ii. Take a brochure with you on holiday to check the description of facilities and to identify any formal complaints procedures.  Alternatively, try to access the holiday provider’s website to access this information.

iii. Raise any problem promptly with the holiday provider or his agent.  Ask them to make (and retain) a written record of your complaint and their response to your complaint. 
iv. Keep your own record of all discussions with times and dates.  Where applicable, take photographs as supporting evidence.

v. Be receptive to any fair offer of alternative accommodation or services.  However when your acceptance is made on the basis of the alternative being effectively the lesser of two evils, record the fact of your acceptance being “under protest”.
vi. Do not sign any waiver form or similar piece of paper. 

 vii. If you are unhappy with the response to a problem at a local level, be prepared to contact Head Office, preferably with a call followed up by an email in which you summarise the issues and any material developments following your initial complaint. 

viii. Should you be determined to pursue a claim for compensation, act swiftly and also ascertain any time limit which is stipulated by the holiday company for the submission of complaints.  Failure to comply with the time limit will usually not be fatal to your claim but it may well give rise to an additional and unnecessary argument.

ix. If you feel convinced that you have a valid cause for complaint and an entitlement to compensation don’t be fobbed off with a derisory opening offer (which will often be expressed in the form of a voucher or a future discount).  But also be realistic about the amount of compensation you are likely to receive and take into account the cost of pursuing a claim including the emotional “wear and tear”, which you are likely to experience in the process.

x. Before deciding whether or not to take legal proceedings, consult your solicitor.

xi. Be aware that there are arbitration schemes (such as that run by ABTA) which can offer an alternative method of dispute resolution.
xii. Finally, keep in mind that the process of seeking compensation in holiday cases will, at best, only deliver a relatively modest sum by way of recompense.  It is not a path to enrichment.

In conclusion

The Court of Appeal’s decision in Milner – v – Carnival Plc affirms the facts that financial compensation will be awarded for materially sub-standard holidays.  However, the case also affirms the unwillingness of the English courts to award windfall or “US style” damages in these situations.  In fact there is a public policy basis to this approach.  According to an earlier decision:

“It is important that logical and beneficial developments in this corner of the law [holiday cases] should not contribute to a society bent on litigation.”

Some articles on this subject are prone to pessimism and may conclude with gloomy advice along the lines:

“Don’t go” “Stay at home” or “Why bother?”

With respect to these commentators, my own advice is different:

• Pack your bags and go and have a fabulous holiday.  Most holidays are successful.
• If minor hassles or disappointments occur with your holiday arrangements then try to retain a sense of perspective and focus on practical as opposed to legal solutions.
• If, unfortunately, more serious problems arise which point towards a legal wrangle, then bear in mind the practical considerations which I have flagged above as they should strengthen your position in any formal dispute with the holiday provider.

Enjoy your holiday!

Clive Ince
Partner

If you would like any further information about the issues raised in this article please contact Clive Ince (cince@gdlaw.co.uk), or any other member of Goodman Derrick LLP’s dispute resolution team on 0207 404 0606.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice.