ABTA arbitration

2.Main Content

ABTA arbitration

This page contains information on ABTA arbitration, including:
What it is
Advantages and disadvantages
Which complaints are eligible and which are not?
Cost
Timescale
Procedure
Outcomes
Small claims versus arbitration for holiday disputes

What it is
IDRS Ltd provides an independent consumer arbitration scheme for disputes about holidays which have been provided by ABTA member companies. ABTA members include the majority of tour operators and travel companies in the UK. IDRS is an independent provider of dispute resolution services, which is owned by the Chartered Institute of Arbitrators.

This scheme is available to consumers worldwide as long as the booking was made with a UK based ABTA member.

IDRS also offers a mediation scheme for personal injury claims arising from holidays. The travel company does not have to be a member of ABTA to use this service.
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Advantages

It is relatively low cost
It is relatively quick - usually concluded within three months
Claims can be submitted online
There is no need to attend a hearing
Evidence can be submitted on videotape, DVD or electronically (such as digital photographs)
Companies are legally obliged to comply with any decision - no ABTA company has failed to pay an award
The losing party will not have to pay the other side's legal costs

Disadvantages

Complainants must complete the company's internal complaints procedure first, which can cause delay
Complainants can only access the scheme through ABTA
Complainants risk having to pay twice the cost of registration if they lose or get an award lower than any offer made before arbitration
A case cannot go to court once arbitration has been agreed
Complainants may not feel they've had a chance to have their say if no hearing is held

Be aware that arbitration awards might be lower than awards made in court. As with all ADR options, however, the level of compensation is not the only way to judge the scheme's effectiveness. There are trade-offs to be made in terms of time invested in the process, stress, and risk of the expense of court fees if one loses.
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Which complaints are eligible and which are not?
The dispute must be about a breach of the contract between the consumer and the tour operator/holiday company or about negligence, but the consumer must first have used the ABTA complaints procedure.

A number of complaints are not eligible, usually because they are for claims higher than the scheme's claim limits. You can claim for a maximum of £5,000 per person, and a total of £25,000 per holiday. See the scheme rules for more details at ABTA arbitration.
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Cost
The registration fee for claimants depends on the claim level. The fees range from £72.85 for total claims of up to £3,000, to £164.50 for total claims up to £25,000. Claimants pay the registration fee and their own expenses, such as photocopying and video production. These costs cannot be claimed back by the winning party.

Legal costs are not refunded either. In England and Wales Legal Help is available to eligible clients for help preparing for arbitration and arbitration fees. In Scotland, advice and assistance may be available for legal work in preparing a claim.

Need for advice: Holiday Which (Autumn 2003) highlights that the Schedule of Claim for arbitration is more difficult to complete than the Claim Form for court. It requires very detailed information and valuations of each aspect of the holiday for which compensation is claimed. IDRS staff will not give you advice on what to claim, so you should consider getting some independent advice. Around 25% of complainants using the scheme do this.
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Timescale
The arbitration procedure takes approximately twelve weeks from the date of application.
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Procedure
Complainants must first have tried to resolve the dispute directly with the ABTA member through its internal complaints procedure. For details see the ABTA website.

If the dispute remains unresolved, the complainant must obtain a reference number from ABTA and can then submit an application to IDRS, either in hard copy or online at ABTA arbitration. The registration fee must be paid at this time. The application form must be sent within nine months of the date the problem arose, or of the date of the return from holiday, whichever is the later.

Note: Once an application form has been signed, the complainant will be unable to take the claim to court. So it is important to consider the pros and cons before submitting an application form. One thing to consider is whether any settlement offers have been made. The arbitrator has the power to 'penalise' winning complainants if the amount eventually awarded is less than any settlement offer made before arbitration. IDRS advises that any money received as an offer should be returned to the holiday company before arbitration. Also, any settlement made after arbitration is initiated should take into account the registration fee, which is not refundable.

IDRS also makes it clear in its guidance notes that some matters are not suited to a format which does not involve a hearing. For example, serious illness or injury claims need expert medical evidence. However, claims for personal injury or illness for up to £1000 can be dealt with through the ABTA arbitration scheme. IDRS also runs a scheme for more serious personal injury or illness claims.

Because the arbitration is decided on the basis of the papers submitted by the parties, the claim submission is crucial and must include all the relevant details and supporting evidence. Complainants will not be allowed to raise any new matters or new points of claim once the claim has been submitted. For guidance on submitting a claim, see the Guidance Notes' at ABTA arbitration. IDRS also gives details of what information should be included in the claim submission.

It is important that the claim shows a breach of some term of the contract and that the complainant took steps to reduce the loss suffered. Where video or photographic evidence is submitted, and there are two parties to the dispute, two sets are required. If there are witnesses, the complainant must obtain and submit witness statements.

The claim is then sent to the holiday company for comment and then back to the complainant to comment on the defence. The arbitrator is sent the claim and all responses and supporting evidence, after which he or she makes a decision.
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Outcomes
In making a decision the arbitrator will look at what the law says, as well as the ABTA code of conduct. The award, stating reasons for the decision, is sent to the parties and is binding on both parties. This does mean that if the complainant remains dissatisfied, he or she cannot take the claim to court.

The arbitrator can only order compensation. He or she cannot order one party to apologise to another. Also, although arbitrators can award for loss of enjoyment, they will look at only the affected part of the claim. For example, the arbitrator might consider that because the complainant's flights were trouble-free, he or she did not suffer loss of enjoyment for that part of the holiday, and thus any compensation would not reflect the cost of the flights.

If the award is in favour of the company, the arbitrator can order the complainant to pay the company the same amount as the registration fee in compensation. Note that winning complainants can also be at risk of having to pay this if they refused to accept a pre-arbitration settlement offer that was equal to or more than the award.

IDRS has introduced a review option that allows a party to appeal the arbitration award for any reason (not just the limited grounds for appeal of arbitration awards that generally apply). But the fee is substantial and is non-refundable, even if the appeal succeeds.
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Small claims versus arbitration for holiday disputes
The Consumers' Association compared ABTA arbitration awards with orders made by district judges in a Holiday Which investigation published in August 2003. It found that often the arbitration award was lower than what a district judge would have ordered, but because they were not able to compare awards in identical cases the conclusions were somewhat speculative. Without more information on outcomes it is impossible to say which is 'fairer' or better for the consumer. In addition, arbitration awards are not precedent-setting, so advisers would be misleading clients if they were to suggest that because one complainant received a certain outcome, the same outcome will result from a similar arbitration.

On the plus side, schemes like ABTA's are based on a low fixed cost, so there might be less risk to the claimant than going to court. The fees for both are roughly equivalent (for undefended claims), but for court claims there are additional fees to pay for enforcing an award, and a party will have other expenses - lost wages, legal representation if used at the hearing - that are not recoverable. ABTA can help with enforcement of awards, at no cost, if an operator or agent refuses to comply. Because there are no hearings, expenses are also likely to be lower.
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Revised July 2007