Change of status of monies held by tour operators’ agents
The ATOL scheme repatriates and refunds customers affected by the financial failure of tour operators and travel agents who hold ATOL licences. In April last year, significant changes to the scheme were introduced – some of which will impact on how monies are handled following company failures.
Prior to last April’s changes to the Civil Aviation (Air Travel Organisers' Licensing) Regulations 2012 (ATOL Regulations), the CAA required ATOL holders to confirm to their customers that monies taken by an authorised agent for bookings protected under the ATOL scheme were held on their behalf. Once the new ATOL Regulations were implemented, this changed to a new requirement for ATOL holders to confirm to their agents and to their customers that, subject to the agents’ obligation to pay it to the ATOL holder, any monies paid by the customer to the ATOL holder’s authorised agent are held for the benefit of the Trustees of the Air Travel Trust (ATT) at all times.
This change allows the ATT to manage the funds held by a failed ATOL holder’s authorised agent for the benefit of affected customers; this could be by requiring agents to simply return monies direct to customers, or in some circumstances the ATT may require all funds to be passed to it in order to fund consumer claims. The specific enabling conditions ATOL holders must follow (Agency Term 5 and Standard Term 1.13) are available to read on the CAA’s website at: ORS3: Air Travel Organisers' Licensing October 2013 | Publications | About the CAA
These changes apply upon the failure of any relevant ATOL holder. Consequently, unlike before these changes were put into place, there is no basis on which an administrator or liquidator should collect such monies from an authorised agent of an ATOL holder that has failed.
By David Clover, Consumer Protection Group, ATOL
Gerry Weiss Award
Following Gerry’s death in 2012 (see Insolvency Practitioner August 2012 edition) Council and the Member Services Committee have been considering how best to honour Gerry and his considerable contribution to the IPA and the development of UK and European insolvency law. The IPA, in conjunction with INSOL Europe (of which Gerry was President) and R3, have approved a new annual award in Gerry’s memory, which will commence in 2014. Applicants will be invited to submit a “big picture” paper which identifies what is, in her/his opinion, the single most desirable change to law or best practice that would improve the UK and/or the international insolvency regime; the primary aim of the proposed change should be to enhance the reputation of the insolvency profession. The three sponsoring organisations will advertise for papers to be submitted by 31 March to a panel comprising representatives of the IPA, INSOL Europe and R3 for assessment by 31 May. The award will include a cash prize of £250 and a trophy to be presented at the IPA Annual Dinner in September, together with overnight accommodation in London; there will also be the opportunity to attend meetings at the IPA and R3 to understand how the profession works.