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Dáil Éireann debate -
Wednesday, 24 May 1995

Vol. 453 No. 4

Package Holidays and Travel Trade Bill, 1995: Report Stage.

Amendments Nos. 1 and 2 are related and it is suggested, therefore, that we discuss both together.

I move amendment No. 1:

In page 10, lines 9 and 10, to delete "for contravening this section" and "substitute "under this section".

These amendments, which arise from consideration of the Bill by the Select Committee on Enterprise and Economic Strategy, make it clear that the defence in section 11 (2) applies in any action brought against the retailer under section 11 (4). Amendment No. 2 brings section 11 (4) into line with section 11 (3) by specifying that the retailer will be liable to compensate the consumer for damage caused to the consumer as a result of his reliance on information in a brochure which is false or misleading.

On Committee Stage, Deputy Brennan referred to section 11 (4) which relates to the retailer's liability for damage caused to the consumer by the consumer's reliance on false and misleading information contained in a brochure supplied by the retailer. Deputy Brennan proposed that the retailer should be liable under section 11 (4) only if he or she supplied a brochure knowing or having reasonable cause to believe that it was false or misleading. The Deputy referred to similar wording in section 10 (2). I undertook to consider this proposal further before Report Stage.

Section 10 (2) related to brochure content. This subsection provides that a retailer shall not supply a brochure knowing, or having reasonable cause to believe, that it does not contain the information specified in section 10 (1). Summary proceedings may be brought and prosecuted by the Director of Consumer Affairs for offences under section 10 (2). Before bringing proceedings the onus will be on the director to be satisfied that the retailer knew or had reasonable cause to believe that the brochure did not comply with the requirements of the section. The director has the necessary expertise and resources for this function.

Under section 11 (4) a retailer will be liable to compensate the consumer for any damage caused to the consumer as a result of the consumer's reliance on information in the brochure or which is false or misleading given by the retailer in respect of the brochure. Proceedings under section 11 (4) would be a matter for civil action between the consumer and the retailer. Under the wording proposed by Deputy Brennan the consumer could take an action against the retailer for offences under section 11 (4) only in cases where the retailer knew or had reasonable cause to believe that the brochure contained false or misleading information. This would not be appropriate as it would place an unreasonable onus on the consumer and limit unduly the scope for an action against the retailer. It could be very difficult for an individual consumer to prove that the retailer supplied the brochure which the retailer knew contained false or misleading information.

For offences under section 10 (2), which deals with brochure content, the Director of Consumer Affairs has the resources necessary to establish whether the retailer knew, or had reasonable cause to believe, that the brochure did not comply with the requirements of section 10. This is not a parallel with putting the onus on a consumer to prove that the retailer supplied a brochure which the retailer knew, or had reasonable cause to believe, contained false or misleading information.

The main purpose of the legislation is to make it easier for the consumer to seek redress in the event of, for example, a brochure being false or misleading. In any civil action brought under section 11 (4) the defence in section 11 (2) will apply. Under this provision it will be a defence for the retailer to show he did not know and had no reason to suspect that the brochure or other descriptive matter contained false or misleading information. The two amendments I proposed to section 11 will make it clear that a retailer's defence under section 11 (2) also applies to section 11 (4). This meets Deputy Brennan's proposal. The retailer will be liable to compensate the consumer only for damage caused as a result of the consumer's reliance on false or misleading information contained in the brochure.

I thank the Minister to taking the import of my proposal into account in amendment No. 1 and I have no difficulty supporting it. He has, however, done that within certain confines in that he has retained the liability of the retailer. In amendment No. 2 he proposes to add a phrase to section 11(4) to read: "A retailer shall be liable to compensate the consumer for any damage caused to the consumer as a direct consequence of and attributable to the consumer's reliance on information which is false or misleading". The phrase "which is false or misleading" will be included, but I am not sure how it will be proved. In whose opinion will it be considered false or misleading? The Minister will encounter some legal difficulties by including such a bald statement as "information which is false or misleading". I understand the Minister's intent and I support its general thrust. I will vote against the amendment, but I doubt whether the phrase "which is false or misleading" will hold up at the end of the day. I suppose that is a matter for the courts to decide.

My concern is that it is not acceptable that the consumer should claim against a small travel agent, say, one in a rural area, on foot of misleading information in a brochure. I asked the Minister to consider on Report Stage whether it is intended that a high street rural travel agent should be totally responsible for every sentence in a holiday brochure produced by a multinational firm. The Minister has stuck to making the retailer liable, but allowing him or her a defence. I proposed not making the retailer liable unless it could be shown that he or she should have been aware of the matter. I made the point that there are 300 or more small travel agents around the country each employing two or three persons who would find it extremely difficult, if not impossible, to stand over every line of every brochure produced by a multinational company.

The Bill also makes it clear that the organiser can be sued. I made the point on Committee Stage that whatever about suing the organiser, which is legitimate enough we need to consider the large number of small travel agents who could not reasonably be expected to stand over every line of every brouchure that comes in. If a small travel agency in Naas or Maynooth displays a brochure promoting apartments in Athens — one of a few hundred such brochures — which contains false or misleading information, it would be difficult for that agency to know it. The Minister had addressed this problem by making it the responsibility of the travel agent to know and to offer as a defence that he could not reasonably have known. That is a fair compromise which I do not have any difficulty accepting.

I want to highlight on this Stage the large number of small travel agents who are affected by additional consumer protection legislation. I know there must be a fine balance and we must have consumer protection, but it must be reasonable and sensible. Given that we have a few hundred small travel agents each employing two or three people, it is not reasonable to expect them to be familiar with the minutiae of international travel brouchures and to check them out. Should they be expected to fly to destinations to check on information in a brochure or should they accept the organiser's word? I am extremely anxious that retailers should only be held liable for information of which they could be reasonably expected to be aware given their size. It is one thing to expect a large travel agency employing a few hundred employees with legal and other specialist departments to know about these things, but another for a small travel agency employing two or three people who take brochures at face value. I thank the Minister for taking on board the import of what I said and I support these amendments.

I thank the Deputy for bringing this valid point to my attention and I have gone as far as is possible to accommodate it in the Bill. The Director of Consumer Affairs will be responsible for implementing the legislation. It will be his job to ensure that either the organiser or the travel agent does not issue brochures containing false information and he will have the resources which would not be available to the ordinary consumer to check that. The consumer will be entitled to take action against a retailer when damage arises as a result of misleading information, but the retailer will have a defence and would not be liable for damages unless he knowingly distributed misleading information. In some cases where the organiser is outside the jurisdiction only the retailer is available to the Director of Consumer Affairs. We have had large-scale instances in the recent past, for example during the last World Cup, where only the travel agent could be contacted by the consumer regarding a possible claim but no liability was involved in those instances.

Amendment agreed to.

I move amendment No. 2:

In page 10, line 25, after "information" to insert "which is false or misleading".

Amendment agreed to.

I move amendment No. 3:

In page 10, line 37, after "required" to insert "by national administrations".

The purpose of this amendment is to make it clear that information about health formalities which must be given to the consumer before the conclusion of a contract refers to requirements imposed by national administrations in other countries. This amendment meets proposals made by a number of Deputies during Second and Committee Stages.

This amendment relates to section 12 (1) (b) and the Minister proposes after the word "required" to insert the words "by national administrations". That subsection will now read "information about health formalities required by national administrations for the journey and the stay;". I thank the Minister for tabling this amendment as I and other Deputies raised this point on Committee Stage. I am not sure if it completely meets the concerns of Deputies, but I acknowledge the Minister has met us halfway. It is consoling to know that points raised on Committee Stage are listened to and studied by the Minister and his officials. The Bill requires intending passengers to be given information on a range of issues including health formalities for their journey and holiday stay. That requirement is onerous and could result in many legal actions being taken. If a person contracted the AIDS virus during a stay abroad, there could be considerable scope for legal action as the Bill requires a travel agent to indicate in advance to the traveller all necessary health formalities. The word "formalities" concerned me somewhat because it is not defined. Perhaps the Minister's amendment which includes formalities required by national administrations may make the position clearer. Presumably that means the administration of the country a person visits.

Perhaps it might also extend to include EU and international health requirements. In acceding to my request to define what he means by "health formalities", is the Minister weakening the provision by limiting it to national administrations when he means health formalities which could reasonably be brought to one's attention by travel agents?

The Bill requires travel agents to have expertise and competence in the area of health but surely small travel agents could not be expected to have such competence. The Bill is still somewhat loose in that travel agents must make the traveller aware of the health requirements of national administration. I can only assume that the travel agent must contact the department of health in the country to which a person is travelling to establish its health requirements. Do small travel agents in, say, Ballinasloe or Naas booking a ticket for a person to travel to Greece have to telephone the Greek Embassy in Dublin to obtain a copy of the health requirements in Greece or are they expected to have an up-to-date copy of such information in their offices? Will it suffice if they merely refer the person to a leaflet and leave it to that person to obtain it? On Committee Stage I suggested a way around this difficulty would be for the Department of Health to make a standard health briefing leaflet available to all travel agents which they could pass on to travellers.

The Minister has met us half way, but while it may be realistic to expect small travel agents to brief travellers on the health formalities required for their journey, it is unrealistic to expect them to brief them on the health formalities required for their stay in another country. Is that a reasonable way to proceed?

I spoke at length on this matter on Committee Stage and I am pleased the Minister's attitude is more forthcoming now. I thank him for at least agreeing to amend the section, although not in as comprehensive a manner as I requested. However, his amendment strengthens the section in that contracts now entered into place an obligation on the organiser of the package holiday to provide information to customers about the health formalities required by the national administrations in the countries to which they are travelling. The Bill as originally drafted obliged the organiser of the package only to provide information on health formalities required for the journey, which was rather vague.

On Committee Stage I highlighted the many diseases with which people travelling abroad can become infected. People buying a holiday package should be made aware not only of the health risks involved, but of how they can be immunised against diseases with which they may come into contact. How will organisers of package holidays meet this new requirement? What obligations will be placed on them? Will they be obliged to supply the addresses of health centres where people can be immunised against diseases? In other words, will information be supplied to enable people to comply with the health requirements of other national administrations? It would be helpful if the Minister elaborated on how he perceives the section as amended being implemented in practice. To what extent will organisers of package holidays be obliged to comply with the regulations? Will the requirement apply to the organiser of the package holiday? Subsequent to the passing of the Bill, does the Minister propose introducing regulations setting out in detail how the section can be complied with to ensure maximum protection for the consumer?

I thank both Deputies for their input to the Bill on Committee Stage. My amendment meets the case they made. Deputy Molloy stated that it strengthens the section and Deputy Brennan complained about the requirement being over-onerous on retailers. This does not affect retailers, it will only affect the organisers whose job it is to provide the information required under the section. Therefore, the small travel agent in Ballinasloe——

One of the largest travel agents in the country is located in Ballinasloe.

I am paraphrasing Deputy Brennan.

Deputy Brennan should know this as he had his wedding reception in Ballinasloe which I was very pleased to attend.

There are also a number of small travel agents in Ballinasloe.

We have achieved a fair balance by not requiring organisers to provide large volumes of information on health centres in every country in the world but simply the health formalities required by national administration. People are not allowed to enter certain countries without being inoculated against yellow fever and tour operators inform people travelling to such countries of the requirement to have such inoculation. There is no particular health requirement of which I am aware for people entering this country, but that does not apply to all countries. Information in this regard should be supplied to travellers by the organisers of package holidays and my amendment meets this requirement.

The Bill states that "the organiser (whether directly or through a retailer)" shall provide the consumer with the information.

It is the organiser who will be responsible. Deputy Brennan and others raised a question relating to the licence number on advertisements. It will not be illegal for a newspaper to take an advertisement without a number but the staff of the Department monitor advertisements for package holidays and a number will now be required by regulation under the 1982 Act.

Amendment agreed to.
Bill reported with amendment and received for final consideration.

When is it proposed to take Fifth Stage?


Agreed to take Fifth Stage today.

Question proposed: "That the Bill do now pass."

I thank Deputies for their general support for the Bill and for their co-operation at the various Stages. We accepted a number of amendments on Committee Stage and earlier. I do not feel it is necessary to go through the main provisions of the Bill; they are well known to the House and, arising from the debate on the various issues, they are now known to the public also. We will be making lead-in time available to the trade to allow it to implement the Bill.

I again assure the House that business travel will not come under the terms of the Bill, the regulations being drawn up by the Director of Consumer Affairs will ensure that. The concern about bed and breakfast accommodation will not be met by the provisions of the Bill except where packages are offered, which is the case in only a small minority of bed and breakfasts. I am quite satisfied also that the prices of holidays will not be adversely affected by the terms of the Bill. This is an important Bill from the point of view of consumer protection. I again thank the Deputies for their support for the Bill.

I thank the Minister of State for his positive response to our suggestions on Committee Stage. It is heartening that he listened to us and took our suggestions on board. I am disappointed, however, with a number of aspects of the Bill and perhaps the Minister of State might address those when he is concluding the debate.

I made the point on Committee Stage that there should be a waiting period of three months following enactment of the Bill before the Act comes into force rather than having it come into force immediately or leaving it open-ended. Also, will the Minister consider amending the definition of a package, which I do not believe he has done? There must not be any doubt that business travel is excluded from the provisions of the Bill. The Minister will recall that we were concerned on Second Stage that a business trip to London for a few days would be regarded as a package if more than one or two items were involved. Many newspapers carry advertisements for airline companies which offer the flight, hotel accommodation, a car and other frills as a complete package. That would seem to make an ordinary trip to London on business for two days a package holiday. That is unreasonable. We should not interfere with business travel because businesses are well able to look after their own interests in regard to their business travel arrangements. They do not require the protection of legislation such as this which is designed, primarily, for the ordinary traveller. Perhaps the Minister will explain how that is dealt with in the Bill, if at all.

We also made the point that this legislation should not apply to brochures already in circulation. I recall the Minister saying he would address that because the same brochures could not be constantly reproduced, as a means of getting around the Act, and that there would have to be some cutoff point. We believe this legislation should not apply to brochures already in circulation because, like all good legislation, it should not be retrospective. People should know that when the Bill comes into law, it is from then on they must deal with it rather than be concerned about brochures already in circulation.

We already discussed the question of the liability of retailers for information contained in a brochure. Again, I thank the Minister for the amendment in this regard but I continue to believe that small travel agencies will find it difficult to make this work. I foresee a lot of necessary litigation because of that particular section.

The section about which I was most concerned and on which I dealt with at length on Committee Stage involved the question of insurance. The Bill imposes requirements of minimum liability insurance cover. I note the Minister's statement that this Bill will not push up prices but I believe it will increase insurance costs and introduce a culture of litigation to holiday travel, the likes of which we have never seen before. The Bill will also push up the cost of package holidays. I gave an example of an Irish holidaymaker who buys a package holiday to the Bahamas from an Irish tour operator. If he contracts food poisoning while on holiday he then has to sue the hotel in the Bahamas for compensation, which would be difficult.

My main concern about this Bill is its effect on the cost of holidays and the effect it will have on small travel agencies who will find it impossible to get insurance cover. The owner of a small travel agency told me that he expected his insurance premium to increase by at least 40 to 50 per cent.

That is not a very responsible comment to make in the House. It is outrageous and I am sure the Deputy knows it.

I do not. I said to the Minister on Committee Stage——

Did he not have any insurance previously?

I dealt with the insurance industry for five years as a Minister and I know a little about it. I know that when the possibility of suing a travel agent is put into legislation, people will avail of it. They will sue travel agents for every problem that arises. If an insurance broker for a travel agent is renewing the premium, the first thing he will say to that travel agent is that, because of all the new risks to which the travel agent is exposed, the insurance premium must be increased. That is not irresponsible; it is commercial logic.

It was irresponsible of the Deputy to use the figure of 40 per cent in the House.

I said on Committee Stage that the experience in Germany and the UK was that insurance costs to small travel agencies increased by 40 per cent when the legislation came into effect. I put that to the Minister on Committee Stage. He did not say then it was irresponsible but I presume he checked it out in the meantime and he has now concluded that it had that effect in the UK and in Germany.

It did not have the effect of a 40 per cent increase.

That is my information. If the Minister has contrary information I would welcome hearing it today. When I put that suggestion to the Minister on Committee Stage, I presume he had an opportunity to clarify it. The Minister has more resources available to him than I do to check these matters. The British and Dutch experience has shown that insurance costs increased by 40 per cent in three years. It is not irresponsible of me to bring to the attention of the Minister international evidence, which he should have, before he imposes additional insurance burdens on travel agents. The Minister admitted on Committee Stage that there would be an increase in prices. He assumed, therefore, that costs would increase. Are we quibbling only about the amount? If that is the case, I will not argue about it. I am merely indicating what happened in other regimes.

When the directive came into effect in Germany, dissatisfied holiday makers took their case to court. I mentioned earlier cases where a travel agent was sued, for example, because the holiday was rained out and where a holiday maker fell off a camel in Tunisia.

I understand that claimant did not win.

My point is that it leads to litigation. I came across a case where a holiday maker who suffered what he called pyschological stress due to the athmophere prevailing in a particular city he visited took the travel agent to court.

I welcome the general thrust of the Bill but I stand over information that the directive's effect has been to rocket insurance costs for small travel agents when introduced in Britain, Holland and Germany. It is likely to do the same here in the coming years as people engage in litigation. It will result in a great deal of litigation in the travel industry. It will increase insurance costs. I was the Minister for Tourism when this directive was issued in Europe and perhaps at that stage I should have been more vigilant.

You were.

Very often when a directive does not take effect for a few years we slavishly agree to it because it offers more protection for the consumer but years later when we come to discuss the fine print in the House we find that we are stuck with impositions that are fine for a developed economy but not necessarily totally appropriate to our stage of development. Implementing this directive may affect insurance costs and thereby increase litigation but I hope that will not be the case.

The concluding comments of my colleague in the Fianna Fáil Party are rather extraordinary for a Member who supports the Bill. He seems to be making arguments against bringing in the provisions of this Bill, losing sight of the fact that it is being introduced to protect the consumer who badly needs the level of protection proposed in it. One can be sure that if the liabilities of the organisers and retailers of package holidays increase as a result of the Bill they will have to take out extra insurance cover and will pass on the cost of the insurance to the consumer. The consumer will pay for the protection and there has not been an outcry from consumers against the opportunity to have this protection afforded to them under statute which is being applied equally throughout the European Union. That is to be greatly welcomed.

I raised a point during the course of the Committee Stage debate on youth educational and cultural tours asking that only those tours organised on a non-commercial basis be excluded from some of the requirements. However, if people are organising educational and cultural tours for the purpose of making a profit I see no reason that exemption should apply to them. I note that the Minister has not introduced an amendment in response to my suggestion and that section 3 stands. Section 3 (2) states:

For the purpose of subsection (1), a person shall not be regarded as organising packages occasionally unless that person is a member of a class specified in regulations made by the Minister under this subsection.

The Minister seemed to imply in his concluding remarks that he will treat some organisers such as scout camps, school or parish outings as exceptions — I take it they will be specified in the regulations — but why would he not consider those who organised tours abroad, on a non-commercial basis, for educational and cultural purposes? The scout camps and school and parish outings to which he refers seem to be trips to Knock on a Sunday evening or a school trip to Dublin in the spring time — and we often have many such trips to this House — and seem to be limited to domestic travel.

The Minister has not met the point I made and I would have thought that as they are organised on a non-commercial basis the exemptions could be extended to the valuable youth exchange, particularly when there is an emphasis in the European Union on cultural interchange so that young people experience the different traditions and cultures of other countries. That would lead to a wider understanding, better co-operation and a more mature approach in member states ensuring that we would never revert to the horror of the 1940s when many nations were at savage war against each other. Will the Minister refer to this point?

I will deal with the last point first. Youth and educational exchanges involving foreign travel have been covered by legislation since 1982 and it is illegal for anybody to go through a body other than a legal organiser. We do not propose to change that in any sense but I have indicated the types of internal tours, such as tours to Knock and so on, that will not be included. Occasional tours organised on a non-commercial basis, scout camps and school and parish outings will not be included under the terms of the Bill and will be exempted when I come to make regulations under this Bill. Foreign travel of any kind is covered by the 1982 Act and should remain covered. It would be very wrong to bring in an amendment that would remove cover from a very vulnerable section of the community, young people travelling abroad who need that protection. I intend to allow a lead in period of about three months to allow all brochures to be removed and replaced by new brochures. Some sections of the Bill can be brought in earlier. I have checked with the Commission and business travel cannot be specifically excluded but I am happy that the Director of Consumer Affairs will be drawing up guidelines describing holiday travel so that the vast majority of business travel will be excluded.

The main point raised by Deputy Brennan in his concluding remarks was the question of insurance. If we have extra protection we need extra cover and there is a cost involved but I am satisfied that because of the competitive nature of the business this will lead to minimal increases in costs. There is the possibility of increased litigation arising from the additional cover but that is what the cover is for. We are transferring an EU directive which was negotiated by the then Minister, Deputy Seamus Brennan, into Irish law and part of that directive is to give extra protection to the consumer. I praise Deputy Brennan for negotiating that directive and it is now my job to transfer it into Irish law.

That is why I am voting for it.

Question put and agreed to.