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
CEDR 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. CEDR is an independent provider of dispute resolution services.
This scheme is available to consumers worldwide as long as the booking was made with a UK-based ABTA member.
ABTA 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 eight weeks
- 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
- You must complete the company's internal complaints procedure first, which can cause delay
- You can only access the scheme through ABTA
- You risk having to pay twice the cost of registration if you lose or get an award lower than any offer made before arbitration
- A case cannot go to court once arbitration has been started
- You have to provide all the evidence for the arbitrator - they will not investigate or ask questions
- You may not feel you've had a chance to have your say if no hearing is held
You need to think about whether to use this arbitration scheme, or go to court. You can't do both. Arbitration awards may well be lower than the compensation a court could award. On the other hand, the arbitration scheme is likely to be quicker than waiting for a court hearing date, and if you are claiming more than £5,000 you cannot use the simpler small claims court process. You may prefer a decision made on the basis of papers, to having a face-to-face hearing - or you may prefer to have the chance to tell your story in person to a judge.
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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. You can't use the scheme to claim for significant compensation as a result of personal injury or illness, though you can make minor illness and personal injury claims as part of a breach of contract claim.
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 £108 for total claims of up to £3,000, to £264 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 their view 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. CEDR 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
You must make your complaint within 18 months of returning from the holiday you are complaining about. The arbitration procedure takes around 8-12 weeks from the date of application. The holiday company then has a further three weeks to pay any award which the arbitrator makes.
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Procedure
If you want to complain about a holiday, you must first try to resolve the dispute with the holiday company. There should be an internal complaints procedure. For details see the ABTA website.
If you can't resolve the problem with the company directly, you should take your complaint to ABTA itself. If they can't sort things out to your satisfaction, they will give you a reference number. You need this number to make a complaint to CEDR for arbitration. You can either send in a written application, or you can complete the on-line application form at ABTA Arbitration. The registration fee must be paid at this time.
Note: Once an application form has been signed, you can't take your 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.
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 £1500 can be dealt with through the ABTA arbitration scheme.
The arbitrator will make a decision based on the papers you submit. The evidence you put together is therefore crucial. You must explain what the problem was, why it was a breach of contract, what steps you took to minimise your losses, and you must provide evidence of all your claims - witness statements, photos or videos. Once you have put in your claim, the holiday company is asked to respond, and you can then comment on their response. You can't put in any new claims or make any new points once the process has started. The arbitrator will be given all of this information, and will make a decision based on this.
For guidance on submitting a claim, see the Guidance Notes at ABTA Arbitration.
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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 even if you are not happy with the arbitrator's decision, you can't take your case 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, so any compensation would not reflect the cost of the flights.
If the arbitrator decides in favour of the holiday company, or if the arbitrator's award is less than any compensation which has already been offered, then you may have to pay the holiday company some compensation yourself - this will be based on the amount of the registration fee you have already paid.
You can't appeal against the arbitrator's decision just because you don't agree with it - there are limited grounds for an appeal against an arbitration award.
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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 than going to court. The fee for the arbitration scheme is about the same as the fee for a court application, and for higher-value claims it can be lower. However, there are other expenses involved in going to court, including other court fees. If your claim is for less than £5,000 you can use the small claims process, which doesn't usually need legal representation, but if it is for a higher amount you will need to pay for a solicitor; if you lose, you will not get your costs back, and you may have to pay the other side's legal costs as well. Even if you win, you may have to pay further fees to the court to enforce payment. With the ABTA arbitration scheme, you don't take the risk of paying for the other side's legal costs, and enforcement is assured through ABTA. You also won't have to take time off work for a hearing.
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January 2012
