Key facts about the law

KEY FACTS ABOUT THE LAW

The following is a guide to the way a judge or an arbitrator will deal with a claim for compensation:

When your holiday booking is accepted (usually when you get a confirmation invoice) a legally binding contract is made with the tour operator - the company that organises your holiday. By law you have the right to expect the holiday that you booked and paid for. So, look carefully at how the holiday is described in the brochure or elsewhere. If the holiday doesn’t match the description, you may have a claim against the tour operator for compensation (see below). The operator is liable for all the services - car hire, accommodation, flights, etc - as long as they were part of the package the company arranged for you.
For a claim to succeed it’s not enough that you didn’t enjoy your holiday. There may be many reasons for this, e.g. bad weather or simply a wrong choice of holiday for you, and things beyond the tour operator’s control.
For a claim to be considered, you’ll need to prove that the tour operator has broken the terms of the holiday contract. These are known as express or implied terms. Examples of express terms are where the brochure promises full board or water-skiing. Implied terms are those which aren’t spelled out in the contract. For example, your holiday should be of a reasonable standard bearing in mind the price you paid.
To qualify for compensation you must then prove that you’ve suffered a loss as a direct result of a breach of the holiday contract. This isn’t always a straightforward process.
How much compensation you can reasonably expect (if any), depends on the extent to which you were prevented from enjoying the holiday. It’s not an exact science. The law expects you to act reasonably when faced with a problem and when considering possible solutions.
If you have a complaint about the quality of goods and services, you have a legal duty to mitigate your loss. This means that you need to take all reasonable steps to minimise the disruption to your enjoyment of the holiday. Your claim may not succeed if you didn’t complain as soon as possible on the spot and give the tour operator every reasonable opportunity to put things right, or if you didn’t accept any reasonable attempts by the company to sort out the problem at the time.
Compensation claims can have three components, although your complaint may not fall into every category:
a) Loss of value: the difference between the value of the holiday you paid for and the one you actually got
b) Out-of-pocket expenses: refund of any reasonable expenses you incurred as a result of the breach of contract
c) Loss of enjoyment: something to compensate for the disappointment and distress caused by things going wrong
Where disappointment and distress form part of the claim, there’s little guidance for arbitrators or judges to help them work out compensation levels. They’ll weigh up all the evidence to see if the company has broken the law, but will also look to see if you’ve acted reasonably.
You must work out the amount that represents the proportion of the holiday that was a failure. If, for example, you spent two days sorting out a problem (e.g. an unsatisfactory room) it may be appropriate to base a claim for compensation on the proportion of the accommodation part of the holiday which was lost.
As a guide to working out the cost of accommodation, first subtract the cost of the air transport from the total holiday cost (usually around 60%). Then divide what’s left by the number of days you were on holiday. That will give you a rough figure for the daily amount paid for the accommodation
Remember that it’s rare to get the whole holiday cost back. Only if the holiday was a total disaster from start to finish or if your disappointment and expenses were substantial can you expect a full refund or more. Also remember, if you’ve already accepted compensation in resort, you can’t usually reopen your complaint when you get home.

Last updated: 18 May 2006