This Article was written by Alex Jennings for ABTA’s Travel Law Today (issue 11 Spring 2021) and is reproduced by agreement with ABTA. Visit abta.com/travellawtoday to download the magazine.
Following the end of the Brexit transition period, EU law has – for the most part – ceased to apply to the UK. However, EU law will continue to be highly relevant to the UK travel industry. Firstly, EU law as it stood on 31 December 2020 has been retained in domestic UK legislation. Secondly, the application of EU law does not typically depend on a business' place of establishment, but rather where the services are being provided. Given the cross-border nature of the travel industry, EU law will therefore continue to apply to UK companies in many circumstances.
Retention of EU law into domestic UK law
The European Union (Withdrawal) Act 2018 (the 2018 Act) converts the majority of EU law as it stood on 31 December 2020 into domestic UK law. This body of converted law is known as "retained EU law".
The 2018 Act sets out five categories of retained EU law:
- EU-derived domestic legislation;
- direct EU legislation;
- saved directly effective rights;
- retained case law; and
- retained general principles of law.
The categories of retained EU law most likely to be relevant to the UK travel industry are (i), (ii) and (iv).
EU-derived domestic legislation effectively captures all pre-existing UK legislation that implemented (or is otherwise related to) EU law, for example the Package Travel and Linked Travel Arrangements Regulations 2018 (the PTRs), which implemented Directive (EU) 2015/2302 (the Package Travel Directive).
Direct EU legislation captures directly-effective EU legislation such as EU regulations and decisions (with the exception of directives). E.g. Regulation (EC) No 261/2004 (the Flight Compensation Regulation).
It is important to note that retained EU law was immediately amended by various statutory instruments once the transition period ended. For the most part, these amendments were intended to ensure that the retained laws were specific to the UK. This was largely a cosmetic exercise and will not result in any material changes. However, some statutory instruments went further and repealed elements of retained EU law where it was based on membership of the EU or reciprocity between Member States. The Package Travel and Linked Travel Arrangements (Amendment) (EU Exit) Regulations 2018 have removed mutual recognition of insolvency protection, for example. This is a significant change and is explored further below.
Retained case law is split into two sub-categories: (i) domestic cases that relate to retained EU law and (ii) Court of Justice of the European Union (CJEU) cases that relate to retained EU law. In both cases, only judgments or decisions handed down before the end of the transition period are retained. While this retained case law binds the lower courts, importantly, neither the Court of Appeal nor the Supreme Court are bound. Instead, they must apply the same test as the Supreme Court applies in deciding whether to depart from its own case law – whether it appears right to do so. UK courts are not bound by EU case law made after the end of the transition period (other than in specific circumstances under the 2018 Act) although they may have regard to it.
What will be interesting is the extent to which the UK courts begin to diverge from the CJEU over time. It is often commented on how consumer-friendly the judgments of the CJEU have been in relation to the Flight Compensation Regulation, for example. It is now open to air carriers to argue before the Supreme Court that such case law should be overturned.
EU law will continue to apply in certain circumstances
In addition to retained EU law, in many cases EU law will continue to apply to UK companies operating in the travel industry. The Flight Compensation Regulation applies to flights departing a Member State regardless of the air carrier's place of establishment. Companies selling package holidays to customers in Spain will still need to comply with the Spanish equivalent of the PTRs. The impact of multiple legal regimes applying in these areas is explored below.
The Flight Compensation Regulation
The Air Passenger Rights and Air Travel Organisers’ Licencing (Amendment) (EU Exit) Regulations 2019 (the APR Regulations) provide passengers with effectively the same rights as those under the Flight Compensation Regulation, except that its application is linked to UK carriers and flights departing/landing in the UK. In the short term at least, passengers are therefore unlikely to notice any difference.
However, in some circumstances, both the APR Regulations and the Flight Compensation Regulation will apply (for example, flights between the EU and UK). In these circumstances, the passenger is able to choose which regime to seek compensation under. To the extent that case law begins to diverge, we may see claimants begin to target the jurisdiction in which the case law is more favourable. In addition, while both regimes prevent claimants from being awarded damages in both jurisdictions, it is possible that if a claimant fails in one jurisdiction they can now turn to the other and re-run their claim.
The key impact here is the end of mutual recognition of insolvency protection arrangements. Previously, companies in Member States selling packages to customers in the UK were able to rely on the protection schemes of their place of establishment. This is no more. All companies selling packages and LTAs to customers in the UK now have to comply with UK insolvency protection schemes and vice versa (i.e. UK companies need to take out insolvency protection in accordance with the laws of the Member State into which it sells packages/facilitates LTAs). UK companies might therefore consider establishing a presence in the EU in order to continue to benefit from mutual recognition as between the Member States.
EU law remains highly relevant to the UK travel industry either because it continues to apply or because UK law has replicated EU law as it was before the end of the transition period (or both). As a result, businesses need to comply with multiple regimes. The extent of disruption that this will cause is likely to be linked to the extent of co-operation/mutual recognition contained within the EU law in question.