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Clause 2

Volume 890: debated on Monday 14 April 1975

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Limits On The Application Of The Air Travel Reserve Fund

I beg to move Amendment No. 7, in page 3, line 1, after "commitments", insert "under or".

With this amendment it will be convenient to take Government Amendments Nos. 8 and 10.

This amendment and amendments Nos. 8 and 10 are drafting amendments. They reflect the fact that a travel organiser may be unable to meet his financial commitments to a customer either because he cannot repay to that customer money which he owes him or because he cannot provide that customer with the accommodation which the customer has booked because he cannot pay the airline or the hotel. The words "in respect of" might have been interpreted as covering only the first of these two situations. The insertion of the words "under a" removes any possible inadequacy.

Amendment agreed to.

Amendment made: No. 8, in page 3, line 37, after "commitments", insert "under or".—[ Mr. Clinton Davis.]

I beg to move Amendment No. 9, in page 4, line 1, leave out from 'Where' to 'in' in line 7 and insert:

'any money is in fact available under any such bond or security as is mentioned in subsection (6) above for the purpose of compensating customers of the air travel organiser in question in respect of losses or liabilities incurred by them in connection with overseas air travel contracts to which this section applies—
  • (a) no payment shall be made out of the Fund in any case falling within that subsection until all the money so available has been paid to or for the benefit of the customers in question or any class or description of those customers; and
  • (b)subsection (1) above shall not apply to any losses or liabilities incurred by a customer in a case falling within subsection (6) above'.
  • This amendment to Clause 2(7) is intended to do two things. First, it removes an ambiguity in paragraph (a) of the subsection which prohibits payments out of the fund until money available under the bond "has been paid". This could have been construed in two ways, as meaning either paid by the obligor under the bond to those administering the bond or as paid by those administering the bond to customers of the travel organiser concerned. The latter interpretation was what was intended. The amendment, by prohibiting payments out of the fund until money available under the bond "has been paid to or for the benefit of the customers in question", puts the matter beyond doubt.

    Secondly, Clause 2(7) as drafted requires all money available under the bond to have been disbursed before the fund is used. In practice an ABTA or TOSG bond may cover those who book, for example, surface travel or travel by scheduled airlines, which is not covered by the Bill. It is unreasonable to provide that the claims of these passengers should have to be satisfied before payments can be made out of the fund to passengers who are covered by the Bill. The amendment accordingly seeks to provide that only bond money available for compensating passengers who are covered by the Bill shall have to be disbursed before payments are made out of the fund.

    I should perhaps mention that in future the Civil Aviation Authority will require, in the case of those holding ABTA or TOSG bonds, that an amount of the bond money specified in each travel organiser's licence shall be earmarked for the purpose of compensating customers who have done business with the licence holder of a kind which is authorised by the licence.

    Could the Minister say in regard to the last point which he read from his notes under what authority that requirement would be made in respect of the Civil Aviation Authority?

    11.30 p.m.

    I think that the authority that the Civil Aviation Authority would utilise here would be regulations which would be made under the main Act. I have not inquired into this, however, and I shall write to the hon. Gentleman about it.

    Amendment agreed to.