In two judgments of 8 June 2023, the Court of Justice of the European Union has ruled that national legislation allowing travel organizers to provide vouchers instead of full refunds for terminated package travel contracts due to the COVID-19 pandemic is incompatible with EU law.
The first case was brought forward by two consumer protection associations in France, challenging an order that allowed travel organizers to issue vouchers with an 18-month validity period for refunding payments. The Directive on Package Travel requires a full refund within 14 days of termination.
The Court clarified that "refund" should be understood as reimbursement in the form of money, and the directive does not allow for alternative forms of payment, such as vouchers, to replace the reimbursement obligation. The objective of the directive is to ensure a high level of consumer protection, and money refunds are better suited to protect travelers’ interests. However, voluntary acceptance of vouchers by travelers is still possible.
Regarding the grounds for terminating a package travel contract, the Court stated that a global health crisis like the COVID-19 pandemic qualifies as "unavoidable and extraordinary circumstances," which entitle travelers to a full refund according to the directive.
The Court rejected the argument that the pandemic constituted a case of force majeure, allowing for national legislation derogating from the full refund obligation. It clarified that the concept of "unavoidable and extraordinary circumstances" already covers force majeure situations in the directive, and there is no provision for derogation from the refund obligation in such cases.
Furthermore, the Court emphasized that force majeure cannot be used by Member States to justify legislation conflicting with directive provisions. The conditions for force majeure were not satisfied in this case, as the legislation suspended the reimbursement obligation without considering the specific financial situation of travel organizers or exploring alternatives like state aid. Additionally, the legislation’s duration was not limited to the period necessary to address the difficulties caused by the force majeure event.
The Court highlighted that it is the responsibility of national courts to annul legislation that is contrary to EU law. The power to adjust the effects of an annulment decision in exceptional circumstances does not apply in this case, as maintaining the order’s effects is not necessary to protect the financial interests of the travel sector.
In a related case, the Court also found that the Republic of Slovakia failed to fulfill its obligations under the directive by adopting legislation that denied travelers the right to terminate package travel contracts without paying termination fees and receiving a full refund.
References: Cases C-407/21 and C-540/21 / ECLI:EU:C:2023:449 and ECLI:EU:C:2023:450.
