On Monday 29 July, the Court of Justice of the European Union (CJEU) handed down a judgement on the requests made by Austria and Belgium (C-771/22 and C-45/23) for an interpretation of the Package Travel Directive. The aim was to clarify the conditions under which travellers can be reimbursed after cancelling their trip due to exceptional and unavoidable circumstances and the organiser subsequently becoming insolvent.
The Austrian and Belgian courts had brought the matter to the Court of Justice following insurers’ refusals to reimburse travellers who had cancelled their package holidays to Gran Canaria and the Dominican Republic because of the Covid-19 pandemic in 2020. The insurers argued that their cover related solely to the insolvency of the organiser preventing the trip from taking place, and not to any prior cancellation by the travellers.
The Court ruled that the guarantee against the organiser’s insolvency also applies if a traveller cancels their trip due to exceptional and unavoidable circumstances and the organiser subsequently becomes insolvent. The directive stipulates that travellers are entitled to a full refund of payments made in the event of cancellation due to exceptional circumstances, and that this right must be effective even if insolvency occurs after cancellation.
But for this entitlement to be truly useful and protected, the guarantee must cover refunds even if the organiser goes bankrupt after the traveller has already cancelled the trip.
See the Court of Justice judgment: https://aeur.eu/f/d5w (Original version in French by Florent Servia)