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Published 7 mayo 2020
The COVID-19 crisis resulted in the cancellation of planned school and university trips. What will happen to money paid towards these activities?
For many families already facing a great deal of financial insecurity, money paid to travel operators for school trips needs to be returned urgently. Equally, schools and local authorities need to ensure that every step is taken to avoid a financial exposure. We discuss some of the difficulties which may arise in recovering money for families and how those difficulties might be overcome.
A huge amount continues to be written and said about the impact on the travel industry that the combination of lockdowns, flight bans and legitimate passenger concerns will have from an economic perspective. The industry is reported to be on its knees, with mass redundancies, closures and reports of worse to come. Perhaps in response to this financial pressure, there are reports of travel companies delaying and resisting returning money to holidaymakers, regardless of their legal rights, prompting the announcement of an investigation by the Competition and Markets Authority. That investigation and the accompanying press coverage may however be of little assistance to those who face similar or worse resistance and delays in obtaining refunds for cancelled school trips.
In some cases, it may be possible to recover under insurance policies without much difficulty. However, in the context of an unprecedented volume of similar claims, insurers are expected to require educational establishments and local authorities to seek to recover from travel companies in the first instance, prior to claiming under insurance policies.
Conversely, many in the travel industry are directing claimants to recover under insurance policies. Guidance issued by the Association of British Travel Agents (ABTA) suggests that it may be “quicker” to do so, separately conceding that many travel operators simply do not have the cash available to pay refunds within the legally required timeframe. As delays continue and uncertainty prevails, lobbying is ongoing by the industry to change the law to legalise the use of “refund credit notes” and other alternatives to cash refunds.
Whereas credit notes, substitute travel or other similar arrangements may suit some holidaymakers, this will not be the case for l trips carefully planned to be appropriate for a particular year group and coinciding with a specific time in the academic year. The same point is likely to apply for University-arranged placements and placements.
Schools and local authorities are understood to be experiencing difficulties in recovering the money paid for trips, with mounting pressure from parents to return the money to families who need it. Compounding these issues, unless prompt action is taken, the prospect of insolvencies in the travel industry increases the risk of schools and local authorities being unable to recover some, if not all, of the money paid.
Government intervention may ultimately be required to ensure that families do not lose out and schools and local authorities do not face the liability alone. However, time may be of the essence and any significant changes are unlikely to come about immediately. It is critical in the meantime that those affected are aware of the options open to them to enforce their legal rights and to apply the maximum pressure to recover much needed money for parents, families and students.
If you would like to discuss the issues raised in this note, please contact Sydney, Tim or Harald using the details below. No charge will be incurred for an initial consultation.
DACB is a leading national and international law firm with teams of lawyers and advisors working in a range of industry sectors. With 12 offices across the UK and market-leading expertise in matters involving insurance and the education sector, the firm is ideally placed to assist
 Or perhaps pursuant to the Government’s Risk Protection Arrangement, available as an alternative to commercial insurance and covering overseas travel cancellations to a value of £4,000 per person
 This is the position taken by the Association of British Insurers in its guidance on the subject
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