Modification of the Joint and Several Liability Regime in the area of Package Travel

Today, March 1, 2022, Law 4/2022, of February 25, on the protection of consumers and users in situations of social and economic vulnerability, has been published in the Official State Gazette and will enter into force tomorrow.

This law, which originates from Royal Decree-Law 1/2021 of January 19, 2002, on the protection of consumers and users in situations of social and economic vulnerability, includes, among other novelties, a modification of the regulations on package travel to eliminate the joint and several liability regime that has been applied until now between wholesale/organizing agencies and retailers/detailers for the correct fulfillment of the travel services included in the contract, thus meeting one of the main demands for which the travel agency sector has been fighting for years.

The solidarity regime between wholesale and retail agencies means that the customer who contracts a package tour can demand liability (request compensation for a breach of the package tour or a defective performance of the service, among others) to any of them regardless of whether the agency claimed has contributed or not in that breach. Certainly, the law recognizes the subsequent right of repetition to claim against the truly non-compliant agency, but this does not repair the damage to the treasury of the agency that refunds the amount, as we have seen during the refunds that have occurred after cancellations by COVID19.

Therefore, retail agencies (in the vast majority of cases) have been obliged to compensate their customers for these breaches, despite not having a direct responsibility for the provision of the contracted services that make up the package, but only for being the point of sale of the same.

We already know that all the legislation on consumers and users has its origin in the successive directives that have been adopted by the Community institutions to harmonize the legislation of the Member States of the European Union in this area, also in the field of package travel, as it is understood as a basic pillar for the achievement of the common market; however, among its guidelines was not the principle of solidarity between agencies.

Indeed, this principle mentioned in the case law of the Supreme Court by "the need to unify the doctrine on the interpretation of art. 11 Law 21/1995, of Package Travel leads to declare the doctrine that the liability of the wholesaler or organizer is joint and several with the retailer or travel agent against the consumer, without prejudice to the return actions that exist between them" (Civil Chamber Judgment of January 20, 2010), was positivized in the reform of the already distant law of 1995, as well as in the Revised Text of the General Law for the Defense of Consumers and Users and other complementary rules approved by Royal Decree 1/2007, of November 16, whose latest version was in Article 161 according to the wording given by Royal Decree-Law 23/2018, of December 21, without there being an obligation of harmonization on this point.

Well, this regime comes to an end with the approved law, since the reform states that the agencies "will only be liable to the traveler for the proper performance of the travel services included in the contract according to the obligations that correspond to them by their scope of management of the package, regardless of whether these services must be performed by themselves or by other providers".

In this way, the agency will only be responsible for the consequences arising from its scope of management; however, the consumer will have the right to address their claims for non-compliance or defective performance with respect to the services that make up the package, indistinctly to organizers or retailers, who will be obliged to inform about the existing liability regime, process the claim directly or through referral to whom it may concern, as well as to inform the traveler of the evolution of the same, even if it is outside its scope of management.

Failure by the retailer to handle the claim will mean that it will be jointly and severally liable with the organizer to the traveler for the proper fulfillment of the obligations of the package that have been called into question. Similarly, the failure of the organizer to handle the claim will mean that he will be jointly and severally liable with the retailer to the traveler for the proper fulfillment of the obligations of the package that correspond to the retailer by its scope of management.

This means that the law penalizes travel agencies that do not correctly process the traveler's claim with the joint and several liability regime, making the management of the claim the real "crux" of the solidarity between agencies, which is reinforced by the fact that it is the agency that receives the claim that must prove that it has acted diligently and immediately once it has been presented by the client.

On the other hand, the revision of the liability regime between agencies involved in a package tour maintains intact the right of recourse against the real party responsible for the fulfillment of the obligation arising from the package tour, as well as the right to compensation against third parties that have contributed to the occurrence of the event for which compensation, price reduction, or fulfillment of an obligation that did not correspond to the agency complained of has taken place.

In short, the modification of the agency liability regime approved today seems to put an end to one of the main sources of discussion that has been developing in the tourism sector in recent years.

José Luis Valencia (Lawyer T&L)