Collective Commentary about the New Package Travel Directive

ARTICLE 3 | MARC MC DONALD 173 expressed in multiples of that over one and a half pages in three articles – 17 dealing with organiser insolvency protection, 18 dealing with mutual recognition of insolvency protection and 19 dealing with insolvency regarding linked travel arrangements. Some key terms are defined – ‘repatriation’ 41 and ‘linked travel arrangements’ 42 . But not ‘security’. Though a small change from ‘obtain a security’ in the Commission’s Proposal 43 to ‘provide security’ in the final text – more similar to the 1990 wording – seems intended to retain the width of financial instruments that can be used to satisfy the obligation. Nor is ‘insolvency’ defined, like in the 1990 Directive. However, Para 39 of the Preamble to Directive 2015/2302, in the context of explaining what an ‘effective ‘ security in Art 17 [2] should be, refers to ‘the organiser’s liquidity problems’ which prevent contracted services being provided. This makes clear that insolvency does not first require any judicial or administrative act or declaration. Whether insolvency arises is purely an issue of fact – whether the contracted services “are not being performed, will not be or will only partially be performed or where service providers require travellers to pay for them.” 44 . Tardiness in paying bills is not in itself inability to pay them, but could become so when unpaid contracted service providers legitimately conclude they will not be paid. The initial decision will typically be made by the unpaid service provider based on rumours of liquidity problems with the organiser/facilitator and a failure to provide satisfactory answers to requests for clarity/payment. It can also arise when the insolvent organiser is subject to receivership or liquidation proceedings. Where a state regulator has administrative responsibility for the security it may seek written confirmation of the insolvency from the organiser before calling in the security. Enhanced roles for MS public bodies Two changes in Directive 2015/2302 signal an enhanced monitoring and approval role for public bodies [colloquially known as regulators] the MS regarding insolvency security. Now ‘Member States shall ensure’ 45 effective security is provided by organisers or LTA facilitators, whereas under the 1990 41 Article 3 [16]. 42 Article 3 [5]. 43 Article 15, EU Commission, Proposal for a Directive of the European Parliament and of the Council on package travel and assisted travel arrangements, amending Regulation ]EC] No 2006/2004, Directive 2011 and repealing Council Directive 90/314/EEC, COM[2013] 512 final. 44 Supra, para 39. 45 Articles 17 [1] and 19 [1].