Collective Commentary about the New Package Travel Directive

HUNGARY | ANDRAS SALAMON 847 b) the term “shall be” is in imperative mood, consequently tour operators are not obliged to establish the rate of their financial security at a percentage higher than what is prescribed in Section 8(3), c) on the other hand, the term at the expense of the financial security in Section 10(5) makes it unequivocal that the insurance company/financial institution is obliged to assume responsibility exclusively up to the amount of the financial security established in the contract. Namely, if the amount of the financial security is used up, the insurance company/financial institution is not obliged to effect further payments, even if passengers received only a portion of the amounts paid by them. 15) In the past 10 years, several tour operators became insolvent in Hungary in a way that their actual financial security, the amount and way of calculation of which were in compliance with the provisions of Section 8, did not actually provide sufficient cover for the full repayment of the monies paid by passengers, and therefore only a portion between 15% and 49% of the amounts paid by passengers was returned to them. 16) The European Court of Justice stated that Article 7 of Directive 90/314 places the travel organiser under an obligation to have sufficient security for the refund of money paid over (Joined Cases C-178/94., C-179/94. and C-188/94–C-190/94. paragraphs 34 and 35). 17) The European Court of Justice in paragraph 74 of the judgment in Case C-140/97 Rechberger and Others [1999] ECR I-3499 ruled that Article 7 of Directive 90/314 imposes an obligation as to result, that result being to guarantee package travellers the refund of money paid over. 18) Government Decree 213/1996 of 23 December effective as of 1 January 1997 did not oblige tour operators to have sufficient financial security, but only to conclude a contract with the insurance company/financial institution in the amount equal to 3, 12 or 20% of the planned future revenues established by them unequivocally. 19) The Decree does not contain any provision that would oblige the Hungarian State or any agency or office thereof to enforce the obligation to achieve a certain result as defined in Clause 74 of the judgement passed in the ECJ Rechberger case.