The European Commission (the “Commission”) recently referred Ireland to the European Court of Justice (the “Court”) for its failure to implement EU Directive (EU) 2015/2302 (the “Directive”) on package travel and linked travel arrangements. All EU Member States were required to implement the Directive by 1 July 2018. Following an initial warning to Ireland one year after this deadline, in January 2019, the Commission has now decided to pursue Ireland for its delay before the EU Courts.
Significance of the Directive: what are Irish consumers missing out on?
The Directive extends consumer rights to purchasers of a ‘non-traditional’ or Linked Travel Arrangement (“LTA”) package holiday, whereby travel services are bundled at the point of sale (eg, a website) either under a single contract or under separate contracts with multiple providers. The specific consumer rights granted by the Directive include (i) right to cancel trips to destinations suddenly hit by natural disasters, war or terrorism without penalty, in particular, (ii) right to clear, via standardised information forms, on LTA features and pricing including any additional charges.
The Directive has provisions which impose additional costs on holiday companies. It requires Ireland to ensure that holiday companies established within their territory set aside security for consumer refunds in the event of that company’s insolvency. In addition, companies must also maintain insolvency protection to guarantee refunds and repatriation in cases of bankruptcy.
Ireland – Track Record of Delay in EU Law Implementation
Under EU law, Member States can be pursued for both immediate lump sum and continuing financial penalties payable to the Commission for failures to properly implement EU directives into national law.
Ireland does not have a strong track record in this area. For example, Ireland was fined over €2 million for a failure to properly implement EU legislation relating to waste water discharge. Moreover, the most recent Commission review of compliance with transposition deadlines shows that (as of December 2017) Ireland had an average delay of 11.9 months for implementation of EU directives. This is significantly higher than the EU average of 8.7 months. In addition, the Commission’s list of active infringement investigations indicates that there are approximately 29 open “non-communication cases” (ie failure of transposition) against Ireland.
While Ireland’s record of implementation may raise cause for concern, decisions imposing financial penalties are relatively rare and this outcome may still be avoided in respect of the Directive. Once transposition has been achieved, the Commission will generally discontinue any proceedings. Indeed EU Commissioner Jourová recently urged “Ireland to transpose the directive as promptly as possible to avoid unnecessary fines” and the Department of Transport has indicated that it is working on implementing the Directive.
While we await confirmation of the regulator tasked with enforcing the new Directive, the Competition and Consumer Protection Commission (the “CCPC”) is responsible for monitoring compliance with current legislation on package holidays. As the Directive falls within the remit of the EU Consumer Protection Cooperation network, it appears likely the CCPC will retain this role under when the Directive is implemented in Ireland.