The inclusion of assisted travel arrangements and the exclusion of independently composed travel arrangements from the proposal to revise the Package Travel Directive : comparative research on the implementation of the

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The Inclusion of Assisted Travel Arrangements and the Exclusion

of Independently Composed Travel Arrangements from the

Proposal to Revise the Package Travel Directive.

Comparative research on the implementation of the Package Travel Directive in

the Netherlands and Spain.

A.M. (Alexandra) Van Doorn LLM May - 2015

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The Inclusion of Assisted Travel Arrangements and the Exclusion

of Independently Composed Travel Arrangements from the

Proposal to Revise the Package Travel Directive.

Comparative research on the implementation of the Package Travel Directive in

the Netherlands and Spain.

Master Thesis: Master Privaatrecht - European Private Law

Name: A.M. van Doorn LLM Student number: 5873975 Supervisor: Dr. Mr. J.A. Luzak Date: May 1st, 2015

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“I see that it is by no means useless to travel, if a man wants to see something new.”

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Table of Contents

1. Introduction ... 1

2. Scenario 1: Protection within an Assisted Travel Arrangement ... 5

2.1 Scenario 1 Under the Current Package Travel Directive... 5

2.1.1 The notion of “package” ... 5

2.1.2 Non-material damages ... 6

2.1.3 Insolvency protection... 6

2.2 Scenario 1 Under the Proposal to Revise the Package Travel Directive ... 7

2.3 Scenario 1 Under Dutch Law ... 8

2.4 Scenario 1 Under Spanish Law... 11

2.5 Evaluation ... 12

2.5.4 Conclusion ... 15

3. Scenario 2: Protection within an Independently Composed Travel Arrangement ... 17

3.1 Scenario 2 Under the Current Package Travel Directive... 17

3.1.2 The notion of “consumer” ... 18

3.1.3 Non-performance ... 18

3.2 Scenario 2 Under the Proposal to Revise the Package Travel Directive ... 19

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3.3 Scenario 2 Under Dutch Law ... 21

3.4 Scenario 2 Under Spanish Law... 22

3.5 Evaluation ... 24

3.5.4 Conclusion ... 27

4. End Conclusion ... 30

5. Bibliography ... 32

5.1 Literature, Publications and Articles ... 32

5.2 Case Law ... 35

5.2.1 European case law ... 35

5.2.2 Dutch case law ... 35

5.2.3 Spanish case law... 35

5.3 Legislation ... 36

6. Annex ... 37

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1. Introduction

Europe is the world’s most visited tourist destination, with a record of 2.6 billion nights spent in touristic accommodation in 2013.1 Tourism is a key sector in the economy of the European Union (hereafter: the “EU”) and accounts for approximately 10% of the EU’s Gross Domestic Product.2 Tourism, however, is more than a sole economic activity; it also contributes to regional development, the preservation of cultural heritage, employment and cooperation between the EU Member States.3

The European Community (hereafter: the “EC”) started regulating tourism in the beginning of the 1980's. Tourism had been developing rapidly over the European continent and had resulted in many disparities in its regulation between the Member States, in particular regarding package travel holidays.4 In order to ensure a high quality and availability of travel services and to guarantee a standard minimum level of consumer protection5 the Package Travel Directive 90/314/EEC (hereafter: the “PTD”) was adopted in 1990.6

For a consumer to receive protection under the PTD there are a few conditions that need to be fulfilled. First, he has to be purchasing a “package”. A package consists of a pre-arranged combination of at least two of the following services: transport, accommodation or any other tourist service, which accounts for a significant proportion of the package and which is not ancillary to the accommodation or transport. Second, a package should have been sold at an inclusive price. Third, a package should cover a period of more than twenty-four hours or include an overnight accommodation.7

Since the rise of the Internet and the emergence of low-cost airlines, the EU has been having difficulties in applying the PTD rules to the rapidly, developing online travel market. In 2011, only 23% of the travelling consumers in the EU booked a pre-arranged package holiday; these holidays are covered by the scope of the existing PTD.8 Another 23% of the travelling consumers chose to book a “customized package”. A customized package is a package which is purchased through a travel agent, where the travel agent entitles the

1_{European Commission Press Release February 2014, p.2.} 2

Risk & Policy Analysts Limited 2012, p.1. 3

European Commission Communication 2010, p.2; Howells & Wilhelmsson 1997, p.229. 4_{Howells & Wilhelmsson 1997, p.231.}

5_{The legislation regarding the EU travel market is based on Articles 4(2)(a), (f), (g), 6 (d), 91, 100, 114, 195 and} 351 of the Treaty on the Functioning of the European Union (hereafter: the “TFEU”); The consolidated versions of the TFEU and the Treaty on the European Union will be used here when referring to EU legislation.

6_{Council Directive of 13 June 1990 on Package Travel, Package Holidays and Package Tours (90/314/EEC),} Official Journal of the European Communities, 23.06.90, No L 158/59. (Hereafter cited as: the “PTD”). 7_{Article 2 (1) PTD.}

8

European Commission Memo 2013, p.3-4; Manko 2013, p.2.

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consumer to choose among a selection of travel services, provided by different organisers or retailers and which are sold for an all-inclusive price.9 The remaining 54% of the travelling consumers independently composed their holidays themselves; these travel arrangements are better known as “independently composed travel arrangements”.10 Consumers purchasing customized packages or independently composed travel arrangements are not or not always protected under the existing PTD, leaving consumers and traders unsure about their rights and obligations. 80% of these consumers are not even aware of this lack of protection.11 The number of consumers protected under the PTD has been falling steadily; this situation led to the launch of the PTD revision process in 2007.12

On July 9th 2009, the European Commission adopted a proposal to adjust the PTD (hereafter: the “Proposal”) to the digital age and changed consumer behaviour.13 The Proposal aims to ensure that all consumers purchasing package travel holidays are suitably protected, either when booking a pre-arranged or a customized package travel holiday.14 As a result, the Proposal will broaden the scope of protection of package travel arrangements to cover customized packages and “assisted travel arrangements”.15 Assisted travel arrangements (hereafter: “ATA’s”) are combinations of at least two different services for the same holiday, which are concluded separately via linked websites (click-through sales). The Proposal will enhance consumer protection for these two types of package travel, e.g., by providing travellers with better information on how to claim damages when the package travel contract is improperly performed and by enhancing consumer rights in the event of the insolvency of an organizer or retailer.16 Unlike the existing PTD, the Proposal will, moreover, become a full harmonization directive, entailing a uniform protection within the Member States.17 What is, however, rather remarkable, is that independently composed travel arrangements will remain excluded from the PTD, if the Proposal is adopted as drafted, which would exclude from its protection’s scope, the high number of consumers that independently compose their own travel arrangements. Therefore, this thesis will examine whether there is a need for extending the scope of the PTD to cover a type of pre-composed packages, namely ATA’s, and

9_{Manko 2013, p.3.} 10

European Commission Memo 2013, p.3-4. Further details can be found in Annex 1. 11

Manko 2013, p.2.

12_{European Commission Memo 2009, p.3.}

13_{Proposal for a Directive of the European Parliament and of the Council on Package Travel and assisted travel} arrangements, amending Regulation (EC) no 2006/2004, Directive 2011/83/EU and repealing Council Directive 90/314/EEC, COM (2013) 512 final of the 9th of July, 2009. (Hereafter cited as: the “Proposal”).

14_{European Commission Press Release March 2014, p.2.} 15_{Manko 2013, p.3-5.}

16_{Article 114(3) TFEU; Manko 2013, p.3-6.} 17

Manko 2013, p.6.

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independently composed travel arrangements. It is especially interesting to compare these two options, since only one of them is included into the Proposal. My research question, therefore is: To what extent does the Proposal, which does not address the issue of independently

composed travel arrangements, fulfil the aims of consumer protection, strengthening of the internal market and does it facilitate legal certainty to the parties?

In order to effectively examine the impact of the exclusion of independently composed travel arrangements from the Proposal, this thesis will look into the implementation of the PTD in two national legal systems. A comparison will be made between the national laws of the Netherlands and Spain. The analysis of these national legal systems is of great value to my research since it offers an insight into how European legal instruments, such as the PTD, are interpreted and applied in the Member States. Moreover, if both these national laws protect consumers in case they conclude independent travel arrangements to the same extent as the Proposal, then the exclusion of such rules from the PTD’s Proposal would be less detrimental. The choice to analyse the laws of these Member States has been based on the fact that both are very important with regards to tourism. Spain was the most visited destination within the EU in 2011 and the Netherlands is one of the EU Member States with the highest number of outbound holidays.18 Moreover, I hold both nationalities, speak Dutch, Spanish and Catalan and am very interested in the differences between these two national legislations.

To examine the differences between the traveller’s protections in these two national systems, two hypothetical scenarios will be considered.

Scenario 1:

Mr. and Mrs. Rodríguez have booked a direct flight departing from Barcelona (Spain), to Santo Domingo (Dominican Republic). They booked this flight via the website of airline A. After receiving the confirmation of the flight, they book an apartment and rental car via a linked website of travel agent B. The travel dates and flight details of Mr. and Mrs. Rodríguez were already known by the website of travel agent B, since they filled in this information on the linked website of airline A. During their vacation Mr. Rodríguez gets salmonella and the couple has to stay at the hospital for the rest of their holiday. Moreover, during their stay in

18

Eurostat 2013, p.1-2.

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Santo Domingo, airline A became insolvent, what meant that their return flight was cancelled. Mr. and Mrs. Rodríguez had to make their own arrangements to get home.

Scenario 2:

Mr. van Leeuwen has booked a direct flight, departing from Amsterdam (the Netherlands), to Dubai (United Arab Emirates), using the website of airline A. After receiving the confirmation of the flight, he visits two other websites, on which he submits all his travel details, and subsequently books a hotel at website B and a rental car at website C for the period of his business trip, as regulated by his flight dates. During Mr. van Leeuwen’s stay in Dubai there is an electrical problem with the air-conditioning in his hotel room, which cannot be solved within a few days. There are no other rooms vacant at the hotel and since staying in a room without air-conditioning in Dubai is not a viable option, he has to find another hotel.

To examine the consequences of the exclusion of independently composed travel arrangements from the scope of the PTD in the abovementioned scenarios, a few questions will have to be answered. First, what is the current scope of application of the PTD and what would be changed with regards to it, if the Proposal were adopted as drafted? Second, are Dutch and Spanish consumers protected differently due to either divergent implementation of the PTD as a minimum harmonisation measure or are other national provisions applicable to travel arrangements falling outside the scope of the PTD? Third, would the Proposal, if it is adopted as it were drafted, conflict with the original goals of the existing PTD? Last, is there a need for extending the scope of the PTD to cover ATA’s and independently composed travel arrangements?

This thesis will begin with the analysis of scenario 1, regarding an ATA. This analysis will start with an examination of a number of elements of scenario 1 under the existing PTD and the Proposal. The analysis will continue with the examination of these same elements under Dutch and Spanish law, respectively. Subsequently, I will compare and evaluate the findings and argue, whether the Proposal to revise the PTD conflicts with the original goals of the existing PTD, that is whether it would strengthen consumer protection as well as benefit the internal market and whether it would provide more legal certainty to the parties. The findings should also clarify whether there is a need for extending the scope of the PTD. The following chapter will have a similar structure but will be dedicated to the analysis of scenario 2, regarding an independently composed travel arrangement.

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2. Scenario 1: Protection within an Assisted Travel Arrangement.

This chapter will analyse scenario 1, in which the following elements will be discussed: the notion of “package”, the right to claim non-material damages and insolvency protection. These elements will be examined under the existing PTD (§2.1) and the Proposal to revise the PTD (§2.2). Paragraphs 2.3 and 2.4 will continue this analysis under Dutch and Spanish law, respectively. The findings will be evaluated in paragraph 2.5.

2.1 Scenario 1 Under the Current Package Travel Directive

2.1.1 The notion of “package”

For the PTD to apply a consumer has to purchase a “package”. According to Article 2(1) PTD, a package includes a pre-arranged combination of at least two of the following services: transport, accommodation or any other tourist service, which accounts for a significant proportion of the package and which is not ancillary to the accommodation or transport; these travel services are, moreover, sold or offered for sale at an inclusive price and cover at least a period of more than twenty-four hours or include an overnight accommodation.19 This notion was broadly interpreted in the Club-Tour judgment of the Court of Justice of the European Union (hereafter: the “CJEU”).20 According to the Club-Tour judgment, the notion of “package” includes holidays organized by travel agents at the request of, and in accordance with, the wishes of a consumer.21 The question is whether the travel arrangements of scenario 1 would qualify as a “package” under Article 2(1) PTD and the Club-Tour judgment. If we examine Article 2(1) PTD and scenario 1, we can establish that the travel arrangements of Mr. and Mrs. Rodríguez are not likely to qualify as a “package”, since they were not pre-arranged or offered for sale at an inclusive price. Their travel arrangements are, moreover, not likely to qualify as a “package” under the Club-Tour judgement, since Mr. and Mrs. Rodríguez arranged their own travel arrangements. Applying the Club-Tour judgment to online bookings has, moreover, raised numerous, complex legal issues, which have resulted in legal proceedings in several Member States.22 Hence, it remains unclear to what extent travel arrangements as described in scenario 1 are covered by the PTD and Club-Tour judgment. In my opinion, this is rather remarkable. Mr. and Mrs. Rodríguez purchased their travel

19_{Howells & Wilhelmsson 1997, p.232-233; Article 2(1) PTD.} 20_{European Commission Memo 2013, p.1; C-400/00 Club-Tour.} 21_{C-400/00 Club-Tour, §16-19.}

22

European Commission Communication 2013, p.6; See e.g.: Hoge Raad (NL), SGR v. ANVR, §3.5-3.6.

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arrangements via linked websites. I am of the opinion that travel agencies indirectly pre-arrange travel pre-arrangements by displaying “links” on their websites. In this way travel agencies influence the choice of consumers and facilitate bookings (by providing the travel data to linked traders). The travel arrangements of Mr. and Mrs. Rodríguez should therefore receive protection under the PTD.

2.1.2 Non-material damages

Article 5(1) PTD obliges Member States to ensure that an organiser and/or retailer can be held liable for the proper performance of a travel service; this duty arises from the conclusion of a package travel contract. In the event of a non-performance, a consumer may be entitled to claim damages.23 The PTD, however, does not define what type of “damages” a consumer could claim.24 Due to the lack of a definition of damages, it was also unclear whether a consumer could actually claim “non-material damages”.25 This, however, changed with the

Simone Leitner judgment of the CJEU.26 The CJEU established that, regarding package travel holidays, the right of compensation included material and non-material damages (e.g. arising from the “loss of enjoyment” of a holiday).27 The question is whether Mr. and Mrs. Rodríguez would be able to claim non-material damages for among other things, the loss of enjoyment of their holiday. Mr. Rodríguez got salmonella during his holiday and as a consequence of that, Mr. Rodríguez had to stay at the hospital for the rest of the holiday, not unlike the family

Leitner mentioned above.28 If Mr. and Mrs. Rodríguez can prove that the damage resulted from the performance of one of the travel services, they would be able to claim non-material damages, provided that their holiday would fall under the scope of the PTD. As mentioned above this is something we cannot assume in this scenario. Mr. and Mrs. Rodríguez will, have to resort to national legislations to seek compensation for their material and non-material damages.

2.1.3 Insolvency protection

The PTD provides security to consumers if an organiser or retailer goes insolvent. According to Article 7 PTD, an organisers or retailer is obliged to provide security for the refund of the advance payments and for repatriation (if transport is included into the package) in the event

23_{Article 5(2) PTD; Howells & Wilhelmsson 1997, p.242-243.} 24

Howells & Wilhelmsson 1997, p.243; Twigg-Flesner 2010, p.211. 25_{Loos 2002, p.158.}

26_{C-168/00 Simone Leitner; Hondius 2013, §28.} 27_{C-168/00 Simone Leitner, §22, 24.}

28

C-168/00 Simone Leitner, §8.

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of insolvency.29 The PTD leaves it up to the Member States to choose the appropriate measures to comply with this provision, as long as the chosen measures are sufficient to ensure the consumers’ reimbursement or repatriation.30 However, also bearing in mind that Member States can be held liable for wrong or late implementation of a directive.31 Whether Mr. and Mrs. Rodríguez will be protected against the insolvency of airline A, will depend first on whether the protection against insolvency provided for in the PTD would apply to their contract, and second, on the efforts taken by the Member States in their national legislations to enforce these rules. Recalling that it is questionable whether Mr. and Mrs. Rodríguez purchased a “package” under Article 2(1) PTD, it is probable that they will have to resort to national insolvency laws to seek compensation.

2.2 Scenario 1 Under the Proposal to Revise the Package Travel Directive

2.2.1 The notion of package

For the Proposal to apply a traveller has to purchase a “package”. According to Article 3(2) Proposal, a “package” includes: a combination of at least two different travel services, for the same holiday if, these travel services have been assembled by one trader at the request of the traveller (a) or, of travel services (b): purchased from a single point of sale within the same booking process (i), sold or offered for sale at an inclusive price (ii), sold or advertised under the notion of “package” (iii), assembled, after the conclusion of the travel contract, by which a trader entitles a traveller to choose among a selection of travel services (iv), purchased from separate traders, via linked online booking procedures, where the travel data is transferred between the traders (v).32 The Proposal will, moreover, widen the scope of the PTD to cover ATA’s. According to Article 3(5) Proposal, an ATA is a combination of at least two different services for the same holiday that do not constitute a package; which are concluded on the basis of separate bookings on the occasion of a singe visit with or to a point of sale (a) or through the conclusion of separate bookings from different traders, via linked websites (b).33 The question is whether this widening of the notion of “package” will change the outcomes of scenario 1. Mr. and Mrs. Rodríguez booked their flight via the website of airline A. After

29_{Joined cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer, §5, 46; C-364/96 Verein für}

Konsumenteninformation (VKI), §23; Howells & Wilhelmsson 1997, p.245.

30

Howells & Wilhelmsson 1997, p.245; C-134/11 Blödel-Pawlik, §19-24; Loos 2014, p.29.

31_{Joined cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer, §29; C-140/97 Rechberger,} §49-53; Micklitz, Stuyck & Terryn 2010, p.538-540.

32_{Article 2, 3(2)(5), 3(2)(6) Proposal.} 33

Article 3(5)(a), (b) Proposal; Manko 2013, p.3-5.

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having received the confirmation of the flight, they booked an apartment and rental car via the linked website of travel agent B. The travel details of Mr. and Mrs. Rodríguez were already known by this website. The travel arrangements of Mr. and Mrs. Rodríguez meet with the criteria of Article 3(5) Proposal and can be classified as ATA’s, since they are a combination of at least two different services for the purpose of the same holiday, which were concluded separately via linked websites.34 Mr. and Mrs. Rodríguez are thus entitled to protection under the Proposal. Travellers purchasing ATA’s will, however, not benefit from the general rights granted by the Proposal. ATA’s are subject to a lighter regime than other package travel contracts. There are two motives for this. First of all, ATA’s do not display the characteristic elements of a package. Second, it is assumed that travellers, purchasing ATA’s, are less likely to be deceived.35 Articles 4 to 14, 18 and 21(1) of the Proposal, will therefore not apply to ATA’s. Travellers will have to resort to the few rights conferred in the Proposal.36

Since, the travel arrangements of Mr. and Mrs. Rodríguez can be classified, as ATA’s, Article 2(1) Proposal establishes that Article 12(2) Proposal, regarding non-material damages, will not apply to scenario 1. Mr. and Mrs. Rodríguez will, therefore, have to resort to national legislations to seek compensation for their material and non-material damages.

Lastly, in the event of insolvency, Articles 15(1) and 17(b) Proposal oblige organisers and retailers, offering ATA’s, to guarantee a full refund of the advance payments and the repatriation of travellers, insofar as transport is included into the travel arrangements.37 Since, the travel arrangements of Mr. and Mrs. Rodríguez can be classified, as ATA’s, they are entitled to a full refund of their advance payments and repatriation.

2.3 Scenario 1 Under Dutch Law

The Dutch legislator implemented the PTD in title 7.7A of the Burgerlijk Wetboek (hereafter: the “BW”). For a traveller to receive protection under Article 7:500(1)(b) BW, he has to be

34_{Recital 9, 18, Article 3(2)(b)(v), 3(5) Proposal; Manko 2013, p.3.} 35_{Proposal, p.5.}

36_{Article 15-17, 20 Proposal.} 37

Article 17(b) Proposal, p.8-9, 17, 28.

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purchasing a “travel contract”.38 The Dutch legislator transposed the notion of “package” as a “travel contract”. This notion, however, does correspond to the definition of “package” described in §2.1.1.39 The notion of “travel contract” was broadly interpreted by the SGR v.

ANVR judgment of the Dutch Hoge Raad.40 According to the Hoge Raad, the notion of “travel contract” includes holidays organized by an organiser or intermediary at the request of, and in accordance with, the wishes of a traveller.41 The scope of this SGR v. ANVR judgment corresponds to the Club-Tour judgment of the CJEU. The question is whether the travel arrangements of Mr. and Mrs. Rodríguez would qualify as a “travel contract” under Article 7:500(1)(b) BW and the SGR v. ANVR judgment. If we examine scenario 1, we can establish that the travel arrangements of Mr. and Mrs. Rodríguez are not likely to qualify as a “travel contract”, since they were not pre-arranged, neither were they sold for an inclusive price nor were they assembled by an organiser or intermediary at the request of Mr. and Mrs. Rodríguez. We therefore cannot assume that Mr. and Mrs. Rodríguez would be entitled to protection under title 7.7A BW or the SGR v. ANVR judgment. However, other national provisions could be applicable to travel arrangements falling outside the scope of title 7.7A BW.

Articles 7:510 and 511 BW, provide travellers with a legal basis to claim non-material damages.42 Since the travel arrangements of Mr. and Mrs. Rodríguez fall outside the scope of title 7.7A BW, they will have to resort to the general provisions regarding non-performance and damages available in titles 6.1.9 and 6.1.10 BW.43 Articles 6:74 and 6:95 BW stipulate the general grounds to claim damages.44 Article 6:74 BW establishes that each debtor can be held liable for damages resulting from a non-performance.45 According to Article 6:95 BW, damages include material and non-material damages (smartengeld).46 A claim for non-material damages, however, requires a legal basis in the BW.47 Since title 7.7A BW will not apply to scenario 1, Mr. Rodríguez could present a claim, based on Article 6:106 BW.48

38_{Consumer Law Compendium 2008}_,_{p.241; Hartkamp, Keus & Sieburgh 2007, p.117; Loos 2013, p.21.} 39

Consumer Law Compendium 2008, p.240-243; Wessels & Verheij 2010, p.157. 40

Hoge Raad (NL), SGR v. ANVR.

41_{Article 2(3) PTD; 7:500(2) BW; Hoge Raad (NL), SGR v. ANVR, §3.5-3.6.} 42_{Loos 2002, p.158; Wessels & Verheij 2010, p.166-167.}

43_{Brunner & De Jong 2004, p.99.} 44

Ibid. p.144. 45_{Ibid. p.144.}

46_{Verheij 2005, p.155.}

47_{See e.g.: Articles 7:510 or 6:106 BW; Spier, Hartlief, van Maanen & Vriesendorp 2006, p.273.} 48

Spier, Hartlief, van Maanen & Vriesendorp 2006, p.274-276.

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According to Article 6:106(1) BW, a consumer is entitled to claim non-material damages, in the following events: First, in the event in which the liable person intentionally inflicted damage (a); second, in the event in which the injured person suffered physical injuries or of his honor or reputation (b); and last, in the event in which the damage consisted of harming the memory of a deceased relative (c).49 Each claim for non-material damages is assessed in conformity with the standards of reasonableness and fairness.50 Dutch courts, moreover, have a broad discretion and may examine all surrounding circumstances, when assessing a claim.51 Mr. Rodríguez would be entitled to present a claim under Article 6:106(1)(b) BW, based on his physical injuries. Mr. Rodríguez will, however, not be able to claim non-material damages arising from the “loss of enjoyment” of his holiday, as in the Simone Leitner judgment, due to the fact that the BW does not provide for a legal basis for such claims.52

Most Dutch organisers are connected to the Stichting Garantiefonds Reisgelden (hereafter: the “SGR”).53 Travellers purchasing a package travel holiday from an affiliated organiser, enter into a third party clause with the SGR, which provides them security in the event of insolvency of the affiliated organiser. 54 Travellers, such as Mr. and Mrs. Rodríguez, concluding travel contracts with organisers or airlines, which are not connected to the SGR will not receive protection under the SGR and will have to resort to Dutch insolvency law.55 A Dutch insolvency procedure starts with a court order to open insolvency proceedings and by appointing a trustee.56 The trustee liquidates the debtors’ assets and redistributes them amongst the creditors. According to the paritas creditorum principle, creditors have an equal right to payment; the estate of the debtor will be redistributed in ratio with the size of the claims of the creditors.57 However, secured and preferred creditors are let off the hook, since the paritas creditorum principle does not affect them; they will be repaid first.58 After the payment to the secured and preferred creditors, ordinary creditors are repaid; this leaves them

49_{Ibid. p.274-276; Article 6:106(1) BW.}

50_{Spier, Hartlief, van Maanen & Vriesendorp 2006, p.274-277.} 51

Ibid. p.276-277; See e.g.: Hoge Raad (NL), Brief aan moeder, §3.6; Hoge Raad (NL), AMC/O, §2.3.1,

5.2.1-5.2.3, 5.4.1.

52_{Rechtbank Haarlem (NL) van 18 december 2001, 69566/HA ZA00-1371, §5.6.} 53_{Wessels & Verheij 2010, p.167.}

54_{Loos 2014, p.28-29.} 55

Ibid. p.29; Wet van 30 september 1893, op het faillissement en de surseance van betaling, Stb. 1895, 155. (Hereafter cited as “Fw”).

56_{Article 1(1), 68(1) Fw.}

57_{Article 3:227(1) BW; Polak 2011, p.2; Buchem-Spapens 2008, p.54.} 58

Article 3:278-282 BW.

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empty-handed most of the times. Mr. and Mrs. Rodríguez are likely to be classified, as ordinary creditors; the chance that they will actually receive any compensation, is small.

2.4 Scenario 1 Under Spanish Law

The Spanish legislator implemented the PTD in Ley 21/1995, de Viajes Combinados, (hereafter: the “LVC”).59 Article 2(1) LVC governs the notion of “package”; this notion is conforming the definition of Article 2(1) PTD, as described in §2.1.1. Article 2(1) LVC also applies to packages assembled by an organiser at the request of a consumer, which corresponds to the outcomes of the Club-Tour judgement.60 The question is whether the travel arrangements of Mr. and Mrs. Rodríguez would qualify as a “package” under the LVC. If we examine Article 2(1) LVC, we can establish that the travel arrangements of Mr. and Mrs. Rodríguez are not likely to qualify as a “package”. The travel arrangements of Mr. and Mrs. Rodríguez were neither pre-arranged nor assembled by an organiser or retailer at the request of Mr. and Mrs. Rodríguez. We therefore cannot assume that the travel arrangements of Mr. and Mrs. Rodríguez would receive protection under the LVC. However, other national provisions could be applicable to travel arrangements falling outside the scope of the LVC.

Since, the provisions of the LVC do not apply in this case, Mr. and Mrs. Rodríguez will have to rely on the general provision regarding obligations and contracts, located in the first title of Book IV of the Código Civil (hereafter: the “CC”), to seek protection for their non-material damages.61 According to Article 1101 CC, every person, guilty of negligence, default or misconduct, can be held liable for the damage caused by his or her actions.62 Article 1106 CC governs the Spanish notion of damages and recognizes claims for material and non-material damages (daño moral).63 Non-material damages include: pain, inconvenience, suffering and mental distress resulting from a non-performance.64 The CC does not contain any legal limitations to the compensation of non-material damages and consumers can, moreover, claim

59_{Ley 21/1995, de 6 de julio, de Viajes Combinados.} 60_{Espín 1999, p.93; Larossa Amante 2011, p.254-255.} 61

Real Decreto de 24 de julio de 1889 por el que se publica el Código Civil (BOE, n°. 206, de 25 de julio de 1889); Vaquer 2012, p.164. 62_{Lacruz Berdejo 2000, p.169-170.} 63_{Ibid. p.205-209; Vaquer 2012, p.164-165.} 64 Vaquer 2012, p.164-165.

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non-material damages without a legal basis.65 However, for a claim to succeed, the plaintiff will need to prove the actual damage and causal relationship between the damage and non-performance.66 In sum, Mr. Rodríguez could present a claim for non-material damages based on Article 1106 CC, on the grounds of his physical injuries and mental distress; caused by the salmonella.67 Mr. Rodríguez will, however, have to prove the causal relationship and damage.

Article 12 LVC obliges organisers and retailers to provide security to consumers by lodging a bond with a regional tourism office.68 These bonds need to ensure the proper performance of package travel holidays and reimburse the costs of repatriation of travellers in the event of insolvency of an organiser or retailer.69 Travellers, such as Mr. and Mrs. Rodríguez, concluding travel contracts with organisers, retailers or airlines, which are not connected to a bond, will have to resort to Spanish insolvency law.70 A Spanish insolvency procedure starts with the filing of the insolvency, either by the debtor or a creditor.71 After the insolvency declaration by the court, a trustee is appointed and the restrictions on the management of the debtor are set.72 If the survival of the business of the debtor is improbable, the trustee will fix the estate of the debtor and redistribute it amongst the creditors.73 This redistribution is done following a ranking of creditors, according to which secured and preferred creditors will be repaid first.74 Mr. and Mrs. Rodríguez are, however, likely to be classified, as ordinary creditors; the chance that they will actually receive any compensation, is small.

2.5 Evaluation

Having examined scenario 1 in the previous paragraphs; the questions, which have to be examined now are: First, would the Proposal, if it is adopted as it were drafted, conflict with the original goals of the existing PTD and second, should ATA’s be included into the Proposal and if so, in what scope?

65_{Ibid. p.165.} 66

Ibid. p.164; Sentencia del Tribunal Supremo (ES), 12 de diciembre 2003, (RJ 2003\9285); Sentencia del Tribunal Supremo (ES), 15 de julio (RJ 2010\5151).

67_{Sentencia del Tribunal Supremo (ES), 31 de mayo, (RJ 2000\5089).} 68_{European Commission Communication 1999, p.31-32; Espín 1999, p.243.}

69_{European Commission Communication 1999, p.31-32; Xiol Bardají 2010, p.18-25.} 70

Ley 22/2003, de 9 de julio, Concursal (BOE n° 164, de 10 julio 2003). 71_{Menéndez 2012, p.13.}

72_{Ibid. p.13, 17.} 73_{Ibid. p.22.} 74

Ibid. p.18, 23-27; Articles 89-92 Ley 22/2003, de 9 de julio, Concursal.

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From all the instruments examined in this chapter, the Proposal offers the highest level of protection to the travel arrangements discussed in scenario 1. Neither the PTD nor the nationally implemented provisions protect ATA’s, whereas the Proposal will (if the Proposal is adopted as it were drafted). To establish whether ATA’s actually should be included into the scope of the PTD, we first need to examine whether the Proposals’ notion of “package” conflicts with the original goals of the PTD. If the Proposal is adopted as it were drafted, it will widen the PTD’s scope to cover “customized packages” and “ATA’s”.75 This will first of all, improve consumer protection, since a higher number of travellers will receive protection when going on holidays, than under the existing PTD.76 The widening of the scope will, furthermore, improve legal certainty, since travellers will have more clarity regarding the PTD’s scope of protection.77 The widening of the scope will, moreover, strengthen the internal market. The existing legislation has led to a situation where traders covered by the existing PTD are at a competitive disadvantage compared to those traders, which are not covered by the PTD.78 The widening of the scope will restore the level playing field, since a higher number of traders will have to comply with the PTD. The restoration of the level playing field will improve competition, cross-border trade and strengthen the internal market.79 A balanced level playing field may, moreover, improve the quality of the travel market, since traders might get an incentive to act more diligently, when offering packages.80 Overall, we could say that the widening of the scope satisfies the original goals of the PTD.

From all the instruments examined in this chapter, Spanish general contract law offers the highest level of protection to scenario 1. Neither the PTD, nor the Proposal will entitle Mr. and Mrs. Rodríguez to claim non-material damages, whereas Spanish general contract law entitles consumers to claim non-material damages without any legal limitations.81 Dutch general contract law offers a slightly lower level of protection to scenario 1 than Spanish general contract law, since it requires a specific legal basis for non-material damages

75_{Manko 2013, p.3-5.}

76_{Proposal, p.7; European Commission Memo 2013, p.3-4.} 77

Proposal, p.7.

78_{European Commission Staff Working Document 2013, p.14.} 79_{Proposal, p.3, 6, 37.}

80_{Ibid. p.37; European Commission Communication 2013, p. 7.} 81

Vaquer 2012, p.165.

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claims.82 To establish whether ATA’s should actually be included into the scope of the PTD, we first need to examine whether the proposed rules regarding non-material damages, conflict with the original goals of the PTD. The existing PTD entitles consumers to claim non-material damages, based on the Simone Leitner judgement, this right, however, has not been implemented in the national legislations of most Member States and a large number of consumers are not even aware of the existence of this right, thus leaving a large number of consumers unprotected.83 If the Proposal is adopted as it were drafted, it will explicitly recognize non-material damages and guarantee a uniform protection within the Member States (thanks to the full harmonisation character of the Proposal).84 However, Article 2(1) Proposal will establish that Article 12(2) Proposal, regarding non-material damages, will not apply to travellers, purchasing ATA’s. So, at first glance, the Proposal seems to satisfy the original goals of the PTD. By explicitly including non-material damages into the PTD, the Proposal aims to contribute to the harmonisation of European Consumer Law, improve consumer protection and increase legal certainty.85 Travellers will have a solid right to claim non-material damages, whereas traders will know their obligations, irrespective in which Member State the traveller lives or where the place of establishment of the trader is located.86 However, the restriction on the right to claim non-material damages, regarding ATA’s, will undermine the full harmonisation character of the Proposal and the outcomes of the Simone

Leitner judgment. 87 Travellers purchasing ATA’s will remain dependent on national legislations for protection regarding their non-material damages, resulting in varying levels of protection. The restriction on the right to claim non-material damages for ATA’s, moreover, works counterproductive to the creation of a clear directive and lacks in legal certainty, since travellers will have to investigate, which provisions will apply to their travel arrangements, which may result in unnecessary and costly legal proceedings.88 Overall, we could say that the explicit inclusion of non-material damages into the Proposal seems to satisfy the original goals of the PTD. However, I am also of the opinion that the restriction on the right to claim non-material damages, regarding ATA’s, conflicts with these goals.

82_{Spier, Hartlief, van Maanen & Vriesendorp 2006, p.273.}

83_{C-168/00 Simone Leitner; European Commission Staff Working Document 2013, p.81.} 84

Manko 2013, p.6. 85_{Proposal, p.36-37.} 86_{Ibid. p.9.}

87_{C-168/00 Simone Leitner; Manko 2013, p.6; European Commission Staff Working Document 2013, p.81.} 88

ECCG 2010, p.2; European Commission Staff Working Document 2013, p.81.

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From all the instruments examined in this chapter, the Proposal offers the highest level of protection to scenario 1, since it will explicitly offer insolvency protection to ATA’s. Neither the PTD nor the nationally implemented provisions provide in a suitable insolvency protection mechanism for ATA’s and the national insolvency laws under examination are also not able to compensate Mr. and Mrs. Rodríguez.89 To establish whether ATA’s should be included into the scope of the PTD, we first need to examine whether the proposed insolvency protection rules, conflict with the original goals of the PTD. If the Proposal is adopted as it were drafted, the special regime of Articles 2(1), 17(b) Proposal will introduce an insolvency protection scheme for ATA’s.90 This special regime will first of all increase consumer protection for travellers purchasing ATA’s, since it will offer an equivalent insolvency protection as the PTD. Second, it will improve legal certainty, since travellers will have more certainty regarding their protection, which may avoid unnecessary and costly legal proceedings.91 Third, it will provide travellers with more knowledge and bargaining power, which may encourage them to purchase packages in other Member States. Last, the special regime for ATA’s will encourage traders to offer their travel services in other Member States, since traders will know their rights and obligations, irrespective in which Member State the traveller lives or where the place of establishment of the trader is located.92 Overall, we could say that the proposed insolvency protection rules satisfy the original goals of the PTD.

2.5.4 Conclusion

Based on the findings of scenario 1 we could conclude that most of the examined elements of the Proposal satisfy the original goals of the PTD. The widening of the notion of “package” will improve consumer protection, cross-border trade and strengthen the internal market, while the explicit inclusion of non-material damages and the insolvency protection scheme for ATA’s will improve consumer protection and increase legal certainty. The restriction on the right to claim non-material damages, regarding ATA’s, however, seems to conflicts with consumer protection and legal certainty. The question, which needs to be answered, is whether there is a need to extend the scope of the PTD to cover ATA’s, based on the examination of the national instruments in scenario 1. If the national legislations under examination protected consumers in case they concluded ATA’s to the same extent as the Proposal, then it would not be necessary to include such rules into the PTD.

89_{Wessels & Verheij 2010, p.167; Espín 1999, p.243.} 90_{Article 17(b) Proposal, p.8-9, 17, 28.}

91_{European Commission Staff Working Document 2013, p.20-23.} 92

Ibid. p.17-18.

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The outcomes of scenario 1 have shown that the Proposal offers the highest level of protection in the event of insolvency, regarding an ATA. The adoption of the Proposal (as it were drafted) will offer Dutch and Spanish travellers, purchasing ATA’s with a higher level of protection in the event of insolvency than the national legislations; this outcome could suggest that it would be beneficial to include ATA’s into the scope of the PTD. Although, the outcomes the scenario have also proven that Spanish general contract law offers the highest level of protection to scenario 1, regarding the right to claim non-material damages, which would suggest that it would be unnecessary to include ATA’s into the scope of the PTD. However, since the Proposal will restrict the right to claim non-material damages, regarding ATA’s; Spanish general contract law will continue to offer the highest level of protection to scenario 1, even if ATA’s were to be included into the scope of the PTD; thus supporting the inclusion of ATA’s. Nonetheless, the adoption of the current Proposal will affect consumer protection in Spain in a negative way. Spanish travellers, purchasing customised packages, will be subject to certain limitations, when presenting a claim for non-material damages, unlike under the CC. The explicit inclusion of the right to claim non-material damages will, however, entitle Dutch travellers, purchasing pre-arranged and customised packages to claim non-material damages arising from the loss of enjoyment of a holiday, unlike all those Dutch travellers that purchase travel arrangements, which fall outside the scope of the PTD.

Overall, we could say that the findings seem to support the inclusion of ATA’s into the scope of the PTD. Personally, I support the inclusion of ATA’s in the Proposal; I, however, doubt the current scope of its inclusion. If the Proposal is adopted as it were drafted, there will remain disparities in the level of protection between ATA’s and pre-arranged packages, (e.g. regarding non-material damages). The Proposal’s preamble states that travellers purchasing ATA’s are less likely to be deceived than travellers purchasing pre-arranged or customised packages, I, however, wonder whether it should mean, that these travellers should receive less protection. I am of the opinion that the same rules should apply to all travel arrangements. Uniform rules will overcome barriers, increase competitiveness, provide consumers with more options to purchase packages in other Member States and provide opportunities for traders to offer packages across-borders. If the drafters genuinely want to distinct ATA’s from other travel arrangements, I am of the opinion the drafters should broaden the scope of Article 17(a) Proposal, which introduces the sole liability of the provider of a travel service regarding information duties, to all provisions of the Proposal. This would entail that all provisions of the Proposal could apply to ATA’s, however, bearing in mind that the provider of the particular travel service would be solely liable for every aspect of that service. I believe that

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such a mechanism could result in a more consistent level of consumer protection and provide in more certainty regarding the duties and rights of organisers and retailers.

3. Scenario 2: Protection within an Independently Composed Travel Arrangement

This chapter will analyse scenario 2, in which the following elements will be discussed: the notion of “package”, the notion of “consumer” and the remedies available in the event of a non-performance. These elements will be examined under the current PTD (§3.1) and the Proposal to revise the PTD (§3.2). Paragraphs 3.3 and 3.4 will continue this analysis under Dutch and Spanish law, respectively. The findings will be evaluated in paragraph 3.5.

3.1 Scenario 2 Under the Current Package Travel Directive

As in Chapter 2, we first of all need to establish whether the travel arrangements of Mr. van Leeuwen would qualify as a “package” under the PTD and the Club-Tour judgment, as described in §2.1.1.93 If we examine Article 2(1) PTD and scenario 2, we can conclude that the travel arrangements of Mr. van Leeuwen are not likely to qualify as a “package”. Mr. van Leeuwen booked his travel arrangements from different, unrelated, websites. The travel arrangements were, moreover, not pre-arranged or offered for sale at an inclusive price. It is also not possible to apply the Club-Tour judgment to the travel arrangements of Mr. van Leeuwen, since they were purchased independently, without interference from an organiser or retailer.94 The travel arrangements of Mr. van Leeuwen can be classified as independently composed travel arrangements. Independently composed travel arrangements are travel services such as a flight, a rental car or an accommodation, which are purchased as stand-alone products; therefore they cannot constitute a “package” under the PTD.95 Hence, we cannot assume that the travel arrangements of Mr. van Leeuwen will receive protection under Article 2(1) PTD or the Club-Tour judgment.

Personally, I am of the opinion that the travel arrangements of Mr. van Leeuwen should receive protection under the PTD. The travel market has shifted into a digital age, in which an on-going increasing number of consumers tend to use the Internet to independently compose

93_{Article 2(1) PTD; C-400/00 Club-Tour.} 94_{C-400/00 Club-Tour, §16-19.}

95

European Commission Memo 2013, p.3.

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their travel arrangements.96 Most of these consumers conclude contracts with different traders under different terms, which places them in a vulnerable position. Imagine, that a consumer books a flight from the website of an airline, a hotel room via the website of the hotel and a rental car via the website of a car rental company, then something goes wrong; the airline personnel goes on strike. The consumer might get a refund from the airline, but if the consumer is not able to find alternative way to reach its destination, he will remain legally responsible for the payment of the hotel and the car rental company, even if he would not make use of their services. This would not happen if the consumer had purchased a “package” as under the PTD. Therefore, I am of the opinion that these consumers are in the same need of protection as if they had concluded a package.

3.1.2 The notion of “consumer”

The PTD contains a wider concept of “consumer” than most other European Consumer Law instruments.97According to Article 4(4) PTD, a “consumer” is a person who agrees to purchase a package, the person on whose behalf a package is purchased or a person to whom a package is transferred.98 This notion also covers persons travelling for business purposes.99 The question is, whether Mr. van Leeuwen qualifies as a “consumer” under the PTD. Mr. van Leeuwen booked his travel arrangements for business purposes. If the PTD had covered his travel arrangements, he would have qualified as a “consumer” under Article 4(4) PTD and been entitled to protection. Since, the PTD will not protect the travel arrangements of Mr. van Leeuwen, he will have to resort to national laws for protection.

3.1.3 Non-performance

Article 5 PTD governs organiser and/or retailer liability in the event of a non-performance of a package travel contract. In no event shall the organiser and/or retailer of a package be liable, if the non-performance, resulted from the fault of the consumer, the fault of a third party, a force majeure situation or from an event in which the non-performance could not have been foreseen by the organiser and/or retailer, even if all due care had been exercised.100 The PTD provides little clarity regarding the remedies available to consumers. The PTD leaves it up to the Member States to determine the respective liabilities of organisers and/or retailers and the

96

European Commission Press Release 2013, p.1, 3; Manko 2013, p.1-2. 97_{Consumer Law Compendium 2008, p.220.}

98_{Article 4(4) PTD; Howells &Wilhelmsson 1997, p.234; Twigg-Flesner 2010, p.210.} 99_{Howells &Wilhelmsson 1997, p.234; Twigg-Flesner 2010, p.210.}

100

Consumer Law Compendium 2008, p.321-322; Article 5(2) PTD.

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remedies available to consumers.101 Nonetheless, the PTD does oblige consumers to report a failure in the performance to the organiser and/or retailer at the earliest opportunity.102 This obligation is tied to the duty of the organiser and/or retailer to provide prompt assistance to a consumer in difficulty.103 Whether Mr. van Leeuwen will be protected against the non-performance of the hotel, will depend first on whether the protection of the PTD would apply to his travel arrangements, and second, on the efforts taken by the Member States in their national legislations to enforce Article 5 PTD. Bearing in mind that Mr. van Leeuwen is unlikely to be seen as having purchased a “package” under the PTD, it is probable that he will have to resort to national legislations to seek protection.

3.2 Scenario 2 Under the Proposal to Revise the Package Travel Directive

For the Proposal to apply, the travel arrangements of Mr. van Leeuwen will have to qualify as a “package” under Articles 2 and 3(2) Proposal. The travel arrangements of Mr. van Leeuwen can be classified as independently composed travel arrangements, since they consists of stand-alone products.104 Article 2(2)(e) Proposal establishes that stand-alone products will maintain outside the PTD scope of protection. Hence, travellers, such as Mr. van Leeuwen, purchasing independently composed travel arrangements will have to rely on national laws or other European Consumer Law instruments for protection.

The PTD’s notion of “consumer” will change considerably, if the Proposal is adopted as it were drafted. The Proposal will first of all refer to “travellers” instead of “consumers”, this to avoid misunderstandings with the concept of “consumer” in other European Consumer Law instruments.105 Moreover, the Proposal will limit the protection of business travellers travelling on the basis of a framework contract.106 These are travel arrangements, which are concluded between employers, and organisers, which are specialised in the sale of managed business travel.107 The Proposal, however, does not provide any guidelines surrounding these

101_{Consumer Law Compendium 2008, p.317-318; Howells & Wilhelmsson 1997, p.242.} 102_{Consumer Law Compendium 2008, p.328; Article 5(4) PTD.}

103

Article 5(2) PTD; Consumer Law Compendium 2008, p.331-332.

104_{European Commission Memo 2013, p.3.} 105_{Recital 7 preamble, Article 3(6) Proposal.}

106_{Recital 7 preamble, Article 2(c), 3(6) Proposal; ECTAA 2013, p.5; BEUC 2013, p.9.} 107

§4.1, Article 2(c), 3(6) Proposal.

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framework contracts, so it remains unclear how to disqualify travellers from the protections’ scope.108 If the Proposal had applied to the travel arrangements of Mr. van Leeuwen, we would need to determine the basis on which the travel arrangements were concluded, since Mr. van Leeuwen would be excluded from the protections’ scope if he would be travelling on the basis of a framework contract; this, however, is unclear. As mentioned above we cannot assume that the travel arrangements of Mr. van Leeuwen will receive protection under the Proposal, Mr. van Leeuwen will have to rely on national legislations for protection.

Articles 11-14 Proposal govern the performance of packages. If the Proposal is adopted as it were drafted, it will provide in a selection of remedies to remedy a lacking or improper performance of a package. Article 11 Proposal will first of all, oblige organisers to remedy the lack of conformity and if necessary to make suitable alternative arrangements for the continuation of the package.109 Moreover, the organiser is obliged to provide the traveller with equivalent transport back to the place of departure, in the event in which it is impossible for the organiser to offer suitable alternative arrangements or if the traveller rejects these.110 Travellers are additionally, entitled to a price reduction and compensation.111 In no event shall the organiser be liable for compensation or price reduction, if the organiser can prove that the lack of conformity is attributable to: a traveller, a third party, unavoidable and extraordinary circumstances or to an event in which the traveller fails to notify the non-performance to the organiser without undue delay.112 Additionally, organisers are under the duty to provide prompt assistance to travellers in difficulty.113 The question is how these provisions will apply to scenario 2. During Mr. van Leeuwen’s stay in Dubai there occurs an electrical problem with the air-conditioning in his hotel room, which cannot be solved within a few days. There are no other rooms vacant at the hotel and since staying in a room without air-conditioning in Dubai is not a viable option, he has to find another hotel. If the Proposal had applied to the travel arrangements of Mr. van Leeuwen, he could have relied on the remedies provided by the Proposal; he would first of all, been entitled to claim suitable alternative arrangements for the rest of his stay in Dubai. Additionally, he would have been entitled to claim a price reduction if there would have been a difference between the substitute and original services

108_{ECTAA 2013, p.5; BEUC 2013, p.9.} 109

Article 11 (2), (3) Proposal, respectively. 110_{Article 11(4) Proposal.}

111_{Article 11(7), 12(2), (3) Proposal.} 112_{Article 12 (3)(a), (b) Proposal.} 113

Article 14 Proposal.

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and lastly, he would have been entitled to claim compensation. As mentioned above we cannot assume that the travel arrangements of Mr. van Leeuwen will receive protection under the Proposal. Mr. van Leeuwen will have to resort to national laws to seek protection.

3.3 Scenario 2 Under Dutch Law

Currently, for a traveller to receive protection under title 7.7A BW, he must have purchased a “travel contract”, as under Article 7:500(1)(b) BW or the SGR v. ANVR judgment, as described in §2.3.1.114 The question is whether the travel arrangements of Mr. van Leeuwen would qualify as a “travel contract”. If we examine scenario 2, we can establish that the travel arrangements of Mr. van Leeuwen do not qualify as a “travel contract”, since they were not pre-arranged, neither were they sold for an inclusive price nor did an organiser or intermediary arrange the travel arrangements at the request of Mr. van Leeuwen. We therefore cannot assume that Mr. van Leeuwen would be entitled to protection under title 7.7A BW or the SGR v. ANVR judgment. Nonetheless, other national provisions could be applicable to travel arrangements falling outside the scope of title 7.7A BW.

The Dutch legislator transposed the notion of “consumer” into the neutral concept of “traveller”.115According to Article 7:500(1)(c) BW, a “traveller” is the person who has purchased a travel contract; the person on whose behalf a travel contract has been concluded or the person to whom a travel contract is transferred.116 Since, the travel arrangements of Mr. van Leeuwen fall outside the scope of title 7.7A BW, he will have to resort to other national provisions. Dutch law, however, does not provide a clear concept of “consumer”. General Dutch contract law usually defines “consumers” as natural persons, who when entering into a contract, do not act in the course of their business, trade, craft or profession.117 Legal persons are, moreover, excluded from this notion.118 Key in establishing whether a consumer acts in the course of his business, trade, craft or profession, is the “purpose” of the contract.119 Whether Mr. van Leeuwen will qualify as a “consumer” under general Dutch contract law,

114_{Loos 2013, p.23; Hartkamp, Keus & Sieburgh 2007, p.117-118; Hoge Raad (NL), SGR v. ANVR, §3.5-3.6,} §4.1; Wessels & Verheij 2010, p.158.

115

Article 7:500(1)(c) BW; Loos 2013, p.22.

116_{Loos 2013, p.22; Hartkamp, Keus & Sieburgh 2007, p.124; Wessels & Verheij 2010, p.158.} 117_{Hondius 2013, p.15; Article 7:5(1) BW; Wessels & Verheij 2010, p.49; Hijma 2007, p.270.} 118_{Consumer Law Compendium 2008, p.721-722.}

119

Hardy 2009, p.20-21.

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depends on the “purpose” behind the concluded contracts. Mr. van Leeuwen booked his travel arrangements for business purposes; therefore, it is unlikely that Mr. van Leeuwen will qualify as a “consumer” under general Dutch contract law.

Since, title 7.7A BW will not apply to scenario 2, Mr. van Leeuwen will have to resort to other national provisions to seek protection for the non-performance of the hotel. This bearing in mind that general contract law will not qualify Mr. van Leeuwen as a consumer. Title 6.1.9 BW governs the consequences of a non-performance in general contract law, regardless of whether the wronged party is a consumer.120 Article 6:74 BW establishes that, each debtor can be held liable for the damage resulting from a non-performance.121 First, it would need to be established whether it would be permanently impossible for the debtor to perform the indebted obligation. If the debtor is permanently unable to perform the obligation, the creditor is entitled to claim (non-) material damages and authorized to annul the contract.122 If there is a possibility that the debtor can perform the obligation, the debtor needs to be notified that he is in default (via a letter of formal notice).123 The creditor is entitled to compensation for the damage resulting from the delay in the performance.124 The question is how these remedies will apply to scenario 2. Mr. van Leeuwen notified the hotel of the electrical problem. This problem could, however, not be solved within a few days, Mr. van Leeuwen consequently had to find another hotel. Since, the hotel was permanently unable to perform the service, Mr. van Leeuwen would be entitled to annul the contract and claim damages for the non-performance.

3.4 Scenario 2 Under Spanish Law

For a traveller to receive protection under the LVC, he must have purchased a “package” as under Article 2(1) LVC, as described in §2.4.1. The question is whether the travel arrangements of Mr. van Leeuwen would qualify as a “package”.125 If we apply Article 2(1) LVC, to Mr. van Leeuwen’s travel arrangements and recall that his travel arrangements can be classified as independently composed travel arrangements, we cannot assume that Mr. van Leeuwen will receive protection under the LVC. The travel arrangements of Mr. van

120_{Brunner & De Jong 2004, p.98.} 121 Ibid. p.144. 122_{6:74-88, 6:265 BW.} 123_{6:81-82 BW.} 124_{6:85 BW.} 125 Espín 1999, p.93.

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Leeuwen were not pre-arranged, nor were they sold for an inclusive price and neither did an organiser or retailer arrange them at his request. However, other national provisions could be applicable to travel arrangements falling outside the scope of the LVC.

According to Article 2(7) LVC a “consumer or user” is the natural or legal person who has purchased a package; the natural person on whose behalf a package was concluded or the natural person to whom a package is transferred.126 Since, the travel arrangements of Mr. van Leeuwen fall outside the scope of the LVC, he will have to resort to other national provisions. However, the Spanish legal system does not provide a clear concept of “consumer”. General Spanish contract law usually defines “consumers” as natural and legal persons, acting for purposes outside their profession, trade or business.127 The question is, whether Mr. van Leeuwen will qualify as a “consumer” under this notion. Since, Mr. van Leeuwen booked his travel arrangements for business purposes it is unlikely that he will qualify as a “consumer” under general Spanish contract law.

Since, the LVC will not apply to the travel arrangements of Mr. van Leeuwen, he will have to resort to other national provisions to seek protection for the non-performance of the hotel. This bearing in mind that Spanish contract law will not qualify Mr. van Leeuwen as a consumer. Article 1101 CC governs the performance of obligations in general Spanish contract law, regardless of whether the wronged party is a consumer.128 Article 1101 CC stipulates three grounds for non-performance. First of all, debtor’s delay secondly, definitive non-performance and lastly, defective performance.129 According to Article 1100(1) CC, debtor’s delay occurs when there is a delay in the performance of the obligation by the debtor. If the delay is imputable to the debtor, it entitles the creditor to claim performance and compensation for the damage caused by the delay, even for fortuitous cases.130 In the event of a definitive non-performance, it has become permanently impossible for the debtor to perform his obligation; a creditor is consequently entitled to terminate the contract, claim performance and damages (if the non-performance is imputable to the debtor).131 In the event of a defective

126_{Consumer Law Compendium 2008, p.220-225; Larossa Amante 2011, p.220-221; Espín 1999, p.100}

127_{Article 3 Real Decreto 1/2007, which will be substituted by Article 3 de la Ley 3/2017, de 27 de marzo (BOE,} n° 76, de 28 de marzo de 2014); Consumer Law Compendium 2008, p.721-725; Larossa Amante 2011, p.40. 128_{Article 1098 CC; Vaquer 2012, p.132; Lacruz Berdejo 2000, p.166.}

129_{Article 1186 CC; Vaquer 2012, p.132; Lacruz Berdejo 2000, p.188-193.} 130_{Article 1100 CC; Vaquer 2012, p.132-134.}

131

Article 1156(2), 1182-1184, 1186 CC; Vaquer 2012, p.132, 135.