European Court of Justice: insolvency protection also applies in case of a package organiser’s fraudulent conduct

The Landgericht Hamburg (Regional Court, Hamburg, Germany) had asked the ECJ whether the protection of consumers pursuant to article 7 of the Package Travel Directive (PTD) also applied where the insolvency was attributable to fraudulent conduct on the part of the travel organiser. The Landgericht Hamburg must rule on the action brought by Mr Blödel-Pawlik against HanseMerkur Reiseversicherung AG, a German insurance company, concerning its refusal to refund the cost of package travel which did not take place because of the insolvency of the travel organiser, Rhein Reisen GmbH. The travel organiser – which, in the view of the Landgericht, had never really intended to organise the trip which Mr Blödel-Pawlik had booked for himself and his wife – became insolvent because it had embezzled the money paid by prospective travellers. It had taken out insurance against insolvency with HanseMerkur Reiseversicherung AG and had provided Mr Blödel-Pawlik with two notices of guarantee confirming that the cost of the trip would be refunded if the trip did not take place owing to the organiser’s insolvency. According to the insurance company, however, the Package Travel Directive is not intended to protect travellers against fraudulent conduct on the part of a package travel organiser.In judgment of Feb. 16, 2012, the ECJ held that the protection conferred on travellers under the PTD in the event of insolvency on the part of the package travel organiser applies even where the insolvency is attributable to the organiser’s own fraudulent conduct. The directive is specifically aimed at arming consumers against the consequences of insolvency, whatever its causes. Accordingly, the fact that the insolvency of the travel organiser is attributable to its own fraudulent conduct cannot constitute an obstacle to the refund of money paid over or to the repatriation of travellers.Source: ECJ press release 13/12 of Feb. 16, 2012Find full text of judgment in Case C-134/11 – Jürgen Blödel-Pawlik v HanseMerkur Reiseversicherung AG here>>.

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