The European Court of Justice (ECJ) has made a significant ruling that could have far-reaching implications for the travel industry. In its decision, the ECJ confirmed that consumers are entitled to a refund even if they cancel their trip due to "unavoidable and exceptional circumstances" and the tour operator becomes insolvent after the cancellation. The ruling concerns cases from Belgium and Austria in which customers had to cancel their trips due to the Covid-19 pandemic and shortly afterwards the tour operator filed for bankruptcy.

The decision focused on two key cases from Belgium and Austria in which travelers canceled their planned trips for 2020 due to the Covid-19 pandemic. The affected customers had concluded contracts with tour operators, who, however, filed for bankruptcy soon after the cancellations. The legal dispute revolved around whether the cover provided by the tour operator's insolvency insurance would also apply in these cases.

In Austria, consumers sued the insurer HDI after the tour operator they had booked with filed for bankruptcy. HDI argued that no refund was due because the trip was canceled due to Corona and not due to the bankruptcy. However, the ECJ did not follow this argument and made it clear that the protection of the bankruptcy insurance remains effective in these cases.

The ECJ decision

The ECJ ruled that there is no legal basis for treating travellers who had to cancel their trip due to extraordinary circumstances such as the pandemic differently from those whose trip is cancelled due to the insolvency of the organiser. The court based its decision on EU law, which provides that consumers who cannot take a package holiday due to "unavoidable and extraordinary circumstances" are entitled to a full refund.

The court justified this by the fact that the insolvency of the tour operator after the cancellation by the consumer cannot be considered a reason for the refund. Rather, insolvency protection must be interpreted in such a way that it also ensures the protection of consumers who have had to cancel their trip due to extraordinary circumstances. This underlines the need to ensure consumer protection in extraordinary situations and to ensure that the insurer's refund obligations are fully met.

Impact on the travel industry

The ECJ ruling has far-reaching consequences for the travel industry and in particular for travel insurance in the EU. It could mean that insurers have to adapt their policies and refund guidelines to meet the expanded protection requirements. This could also affect the conditions for insolvency protection of tour operators and possibly lead to an adjustment of insurance premiums.

For consumers, the ruling represents an important strengthening of their rights. Travellers who have to cancel their trip due to exceptional circumstances such as a pandemic can now be confident that they will still be entitled to a refund if the tour operator goes bankrupt. This could help restore customer confidence in the travel industry, especially in times of uncertainty such as global pandemics.

Following the ECJ ruling, the national courts in Belgium and Austria must now make final decisions that take the ECJ ruling into account. The national courts will have to examine how the ruling is implemented in their respective legal systems and what specific refund claims this will give rise to for the affected consumers.

The ECJ ruling marks an important step towards protecting consumer rights and strengthens the position of travellers in dealing with unexpected events and the associated uncertainties. It sends a clear message that consumer protection in the EU must be maintained even in exceptional situations.