Provisional text
OPINION OF ADVOCATE GENERAL
MEDINA
delivered on 7 March 2024 (1)
Joined Cases C‑771/22 and C‑45/23
Bundesarbeitskammer
v
HDI Global SE
(Request for a preliminary ruling from the Bezirksgericht für Handelssachen Wien (District Court for Commercial Matters, Vienna, Austria))
and
A,
B,
C,
D
v
MS Amlin Insurance SE
(Request for a preliminary ruling from the Nederlandstalige Ondernemingsrechtbank Brussel (Brussels Companies Court (Dutch-speaking), Belgium))
(Reference for a preliminary ruling – Consumer protection – Package travel and linked travel arrangements – Directive (EU) 2015/2302 – Unavoidable and extraordinary circumstances – COVID-19 pandemic – Insolvency of the organiser – Article 17(1) – Termination of the package travel contract before the insolvency – Security for the refund of all payments made by or on behalf of travellers – Scope of the insolvency protection)
I. Introduction
1. The travel and tourism sector was one of the sectors most affected by the COVID-19 pandemic, the impact on the entire travel industry being unprecedented. (2) The outbreak of the pandemic led to mass cancellations of package holidays, while no new bookings were made. This created serious liquidity problems for package travel organisers which were confronted with a large amount of claims for refunds. Within that context, the present case raises the issue of the scope of the protection of travellers in the event of insolvency of tour operators covered by Article 17(1) of Directive (EU) 2015/2302. (3)
II. Legal framework
European Union law
2. As set out in recitals 39 and 40 of Directive 2015/2302:
‘(39) Member States should ensure that travellers purchasing a package are fully protected against the organiser’s insolvency. Member States in which organisers are established should ensure that they provide security for the refund of all payments made by or on behalf of travellers and, in so far as a package includes the carriage of passengers, for the traveller’s repatriation in the event of the organiser’s insolvency. However, it should be possible to offer travellers the continuation of the package. While retaining discretion as to the way in which insolvency protection is to be arranged, Member States should ensure that the protection is effective. Effectiveness implies that the protection should become available as soon as, as a consequence of the organiser’s liquidity problems, travel services are not being performed, will not be or will only partially be performed, or where service providers require travellers to pay for them. Member States should be able to require that organisers provide travellers with a certificate documenting a direct entitlement against the provider of the insolvency protection.
(40) For the insolvency protection to be effective, it should cover the foreseeable amounts of payments affected by the organiser’s insolvency and, where applicable, the foreseeable cost for repatriations. This means that the protection should be sufficient to cover all foreseeable payments made by or on behalf of travellers in respect of packages in peak season, taking into account the period between receiving such payments and the completion of the trip or holiday, as well as, where applicable, the foreseeable cost for repatriations … However, effective insolvency protection should not have to take into account highly remote risks, for instance the simultaneous insolvency of several of the largest organisers, where to do so would disproportionately affect the cost of the protection, thus hampering its effectiveness. In such cases the guarantee for refunds may be limited.’
3. Article 12 of Directive 2015/2302, headed ‘Termination of the package travel contract and the right of withdrawal before the start of the package’, states:
‘1. Member States shall ensure that the traveller may terminate the package travel contract at any time before the start of the package. Where the traveller terminates the package travel contract under this paragraph, the traveller may be required to pay an appropriate and justifiable termination fee to the organiser. …
2. Notwithstanding paragraph 1, the traveller shall have the right to terminate the package travel contract before the start of the package without paying any termination fee in the event of unavoidable and extraordinary circumstances occurring at the place of destination or its immediate vicinity and significantly affecting the performance of the package, or which significantly affect the carriage of passengers to the destination. In the event of termination of the package travel contract under this paragraph, the traveller shall be entitled to a full refund of any payments made for the package, but shall not be entitled to additional compensation.
3. The organiser may terminate the package travel contract and provide the traveller with a full refund of any payments made for the package, but shall not be liable for additional compensation, if:
…
(b) the organiser is prevented from performing the contract because of unavoidable and extraordinary circumstances and notifies the traveller of the termination of the contract without undue delay before the start of the package.
4. The organiser shall provide any refunds required under paragraphs 2 and 3 or, with respect to paragraph 1, reimburse any payments made by or on behalf of the traveller for the package minus the appropriate termination fee. Such refunds or reimbursements shall be made to the traveller without undue delay and in any event not later than 14 days after the package travel contract is terminated.
…’
4. Article 17 of Directive 2015/2302, entitled ‘Effectiveness and scope of insolvency protection’, provides:
‘1. Member States shall ensure that organisers established in their territory provide security for the refund of all payments made by or on behalf of travellers in so far as the relevant services are not performed as a consequence of the organiser’s insolvency. If the carriage of passengers is included in the package travel contract, organisers shall also provide security for the travellers’ repatriation. Continuation of the package may be offered.
…
2. The security referred to in paragraph 1 shall be effective and shall cover reasonably foreseeable costs. It shall cover the amounts of payments made by or on behalf of travellers in respect of packages, taking into account the length of the period between down payments and final payments and the completion of the packages, as well as the estimated cost for repatriations in the event of the organiser’s insolvency.
…
5. For travel services that have not been performed, refunds shall be provided without undue delay after the traveller’s request.’
National law
Austrian law
5. Paragraph 3 of the Verordnung der Bundesministerin für Digitalisierung und Wirtschaftsstandort über Pauschalreisen und verbundene Reiseleistungen (Decree of the Federal Minister for Digital and Economic Affairs on package travel and related travel services), reads as follows:
‘(1) Persons entitled to organise travel services must ensure that the traveller is compensated for:
1. payments already made (advance payments and the balance) in so far as, because of the insolvency of the person entitled to organise travel services, the travel services are not provided in whole or in part or if the supplier requires the traveller to pay for those services;
…’
Belgian law
6. The first sentence of Article 54 of the Loi relative à la vente de voyages à forfait, de prestations de voyage liées et de services de voyage (Belgian Law on the sale of package travel, linked travel arrangements and travel services), of 21 November 2017 (Moniteur belge No 2017014061 of 1 December 2017, p. 106673) (‘the Law on package travel’), states:
‘The organisers and retailers established in Belgium provide security for the refund of all payments made by or on behalf of travellers in so far as the relevant services are not performed as a consequence of the organiser’s insolvency’.
7. The Arrêté Royal relatif à la protection contre l’insolvabilité lors de la vente de voyages à forfait, de prestations de voyage liées et de services de voyage (Royal Decree on protection against insolvency as regards the sale of package travel, linked travel arrangements and travel services), of 29 May 2018 (Moniteur belge No 2018012508, of 11 June 2018, p. 48438; ‘the Royal Decree’) defines the manner in which the security set out under Article 54 of the Law on package travel must be provided.
8. According to Article 12(1) of the Royal Decree:
‘In the event of insolvency of the organiser, the insurance contract provides the following security:
1 The continuation of the package, if this is possible;
2 the reimbursement of all payments made when the contract was concluded with the professional;
3 the reimbursement of the payments made for the package services that cannot be performed because of the insolvency of the professional;
4 the repatriation of the travellers, when the performance of the contract with the professional has already started …’
9. The first sentence of Article 13 of the Royal Decree, states:
‘The refund concerns all payments that the beneficiary made to the organiser for the package travel contract in so far as the contract was not performed as a result of the organiser’s insolvency or all the payments made for the travel services that were not performed as a consequence of the organiser’s insolvency’.
III. The disputes in the main proceedings and the references for a preliminary ruling
Case C‑771/22
10. An Austrian consumer concluded a package travel contract on 3 March 2020 with the travel organiser Flamenco Sprachreisen GmbH (‘Flamenco’) for a trip to Spain. The trip was scheduled to take place from 3 May 2020 to 2 June 2020. The consumer paid the total price for the trip on 9 March 2020.
11. On 16 March 2020, the consumer terminated the package travel contract due to the unavoidable and extraordinary circumstances related to the COVID-19 outbreak. The right to terminate the contract was not challenged in the main proceedings.
12. On 20 May 2020, the insolvency proceedings of Flamenco were opened before the Landesgericht Linz (Regional Court, Linz, Austria). Flamenco ceased its operations. Following the final distribution of the undertaking’s assets the insolvency was closed by order of 9 June 2022, which became final.
13. The liquidator formally terminated the package travel contract on 8 June 2020.
14. The consumer assigned his or her claim for the refund of the payments made for the package against Flamenco to the Bundesarbeitskammer (Federal Chamber of Workers, Austria) which is the applicant in the main proceedings.
15. The applicant brought an action against HDI Global SE, Flamenco’s insurer. HDI Global objected that it was not liable to reimburse the consumer as the insolvency was not the origin of the non-performance of the travel services. The applicant maintained that the existence of such causal link is not required under Article 17(1) of Directive 2015/2302.
16. The referring court states that both the wording of Article 17(1) of Directive 2015/2302 and the national transposing provision indicate that there must be a causal link between the insolvency and the failure to perform the travel services. This would mean that the insolvency protection does not cover refund claims where the package is terminated before an organiser becomes insolvent. However, the referring court notes that recital 39 of Directive 2015/2302 indicates otherwise since it requires that Member States provide security for the refund of ‘all payments made by or on behalf of travellers’. An interpretation whereby Article 17(1) covers the refund of all payments made is supported by the objective of achieving a high level of consumer protection pursuant to Article 114(3) and Article 169 TFEU, as well as pursuant to Article 38 of the Charter of Fundamental Rights of the European Union (‘the Charter’).
17. The referring court also wonders whether the fact that the organiser became insolvent when the travel was scheduled to take place or the fact that the reason for termination of the contract and, indirectly for the insolvency is the same exceptional circumstance, namely the COVID-19 pandemic, are relevant for the interpretation of Article 17(1) of Directive 2015/2302.
18. On the view that the resolution of the dispute before it depends on the interpretation of Directive 2015/2302, the Bezirksgericht für Handelssachen Wien (District Court for Commercial Matters, Vienna, Austria), decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:
‘(1) Is Article 17 of [Directive 2015/2302] to be interpreted as meaning that payments made by a traveller to the travel organiser before the start of the trip or holiday are only covered where the trip or holiday does not take place as a result of the insolvency of that travel organiser, or are also payments made to the travel organiser before the opening of insolvency proceedings covered if the traveller terminates the contract before the occurrence of insolvency due to exceptional circumstances within the meaning of Article 12 of Directive 2015/2302?
(2) Is Article 17 of [Directive 2015/2302] to be interpreted as meaning that payments made by a traveller to the travel organiser before the start of the trip or holiday are covered where, even before the occurrence of insolvency, the traveller terminates the contract due to exceptional circumstances within the meaning of Article 12 of that directive, but the insolvency occurred during the trip or holiday that had been booked?
(3) Is Article 17 of [Directive 2015/2302] to be interpreted as meaning that payments made by a traveller to the travel organiser before the start of the trip or holiday are covered where, even before the occurrence of insolvency, the traveller terminates the contract due to exceptional circumstances within the meaning of Article 12 of that directive, and the insolvency of the travel organiser occurred due to those exceptional circumstances?’
19. Written observations have been submitted by the parties in the main proceedings, the Greek Government and the European Commission. Those parties presented oral argument at the hearing which took place on 7 December 2023.
Case C‑45/23
20. The appellants are consumers, whereas the respondent, MS Amlin Insurance SE, is the insolvency insurer of Exclusive Destinations NV, the travel organiser.
21. On 13 November 2019, the first appellant concluded, through a reseller, a package travel contract with Exclusive Destinations. The package travel was scheduled for March 2020.
22. The trip was rebooked for November 2020, due to the COVID-19 pandemic, and for a higher price. The original price had already been paid to the organiser.
23. In October 2020, the reseller, at the consumers’ request, notified the organiser of the consumers’ decision to terminate the contract and receive a full refund. The organiser confirmed that it would take the necessary steps to do this.
24. By judgment of 8 December 2020, the Ondernemingsrechtbank Gent (Commercial Court, Ghent, Belgium) declared the organiser insolvent.
25. On 9 December 2020, the reseller refunded the consumers’ part of the price of the package which had not yet been paid to the organiser.
26. On 22 January 2021, MS Amlin Insurance was given formal notice to refund the entire amount of the travel price. That entity refused the claim as the termination of the contract was not due to the insolvency of the travel organiser, Exclusive Destinations.
27. The consumers sought recovery of the price paid before the referring court. In support of their claim, they submitted that the general conditions of the insurance contract between MS Amlin Insurance and Exclusive Destinations clearly cover the refund to the traveller(s) of the sums paid to the insured organiser at the conclusion of the contract or after that date.
28. MS Amlin Insurance contests that the situation of the applicants is covered by the insurance contract, on the ground that the insurance guarantee applies only to those refunds related to a trip that did not take place due to the organiser’s insolvency.
29. The referring court considers that the security set out in Article 17(1) of Directive 2015/2302 is compulsory only in so far as the relevant services are not performed as a consequence of the organiser’s insolvency. In its view, Directive 2015/2302 does not provide for compulsory security when the services are not performed for any reason other than the organiser’s insolvency, such as when the package travel is terminated by the traveller due to unavoidable and extraordinary circumstances, pursuant to Article 12(1) of Directive 2015/2302.
30. The referring court notes that the wording of Article 54 of the Law on package travel, which transposes Directive 2015/2302, corresponds, essentially, to that of Article 17(1) thereof, without providing for more extensive protection.
31. In view of the wording of Directive 2015/2302 and its national transposition, the referring court considers that the consumers’ claim in the main proceedings is not insured and that normally it should be rejected.
32. However, the referring court harbours doubts as to whether such a result is compatible with the objective of ensuring a high level of consumer protection and whether it might give rise to unequal treatment.
33. More particularly, the referring court points out, first, that under Council Directive 90/314/EEC, (4) the Court has ruled that the purpose of the security for the refund of money paid over by consumers is to protect them against the financial risks arising from the insolvency or bankruptcy of the travel organiser. (5)
34. Second, the referring court notes that in case of insolvency, there are broadly two categories of travellers bearing a financial risk related to the price paid. The first category comprises the travellers whose trip cannot take place as a result of the organiser becoming insolvent. Those travellers suffer a financial loss, as they lose the travel price paid. The second category comprises the travellers who are entitled to a full refund of the travel price paid due to the termination of their package travel contract on the ground of unavoidable and extraordinary circumstances. Those travellers also suffer a financial loss when the organiser becomes insolvent after the termination of the package travel contract, but before the travel price has been refunded to them.
35. The referring court emphasises that both categories of travellers bear the same financial risk. It acknowledges that the situation of those two categories of travellers are different in other respects. For example, an organiser’s insolvency renders performance of the package travel contract permanently impossible, while the unavoidable and extraordinary circumstances are generally of a temporary nature. Moreover, the first category of travellers have a package travel contract when the organiser becomes insolvent, while the second category of travellers have terminated their contract before the organiser becomes insolvent. The referring court questions, however, to what extent those factors are capable of justifying a difference in treatment.
36. On the view that resolution of the dispute before it depends on the interpretation of Directive 2015/2302, the Nederlandstalige Ondernemingsrechtbank Brussel (Brussels Companies Court (Dutch-speaking), Belgium), decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:
‘Should Article 17(1) of [Directive 2015/2302] be interpreted as meaning that the security which it requires also applies to the refund of all sums already paid by travellers or on their behalf where the traveller terminates the package travel contract by reason of unavoidable and extraordinary circumstances within the meaning of Article 12(2) of that directive and the organiser is declared insolvent after the termination of the package travel contract on that basis, but before those sums have actually been refunded to the traveller, as a result of which that traveller suffers a financial loss and consequently bears an economic risk in the event of the organiser’s liquidation?’
37. Written observations have been submitted by the parties in the main proceedings, the Belgian, Danish and Greek Governments, the Council of the European Union, the European Parliament and the Commission. With the exception of the Danish Government, those parties presented oral argument at the hearing which took place on 7 December 2023.
38. By decision of the Court of 24 October 2023, Cases C‑771/22 and C‑45/23 were joined for the purposes of the written and oral procedure and the judgment.
IV. Legal assessment
The first question referred in Case C‑771/22 and the sole question referred in Case C‑45/23
39. By their questions, which must be treated jointly, the referring courts seek to ascertain, in essence, the scope of the insolvency protection for the refund of all payments made by travellers provided for under Article 17(1) of Directive 2015/2302.
40. More specifically, by the first question in Case C‑771/22 and by the sole question in Case C‑45/23 the referring courts ask, in essence, whether the security for a refund covers only those payments made by or on behalf of travellers where the trip or holiday did not take place as a result of the organiser’s insolvency, or also those payments made by or on behalf of travellers who terminated the contract due to unavoidable and extraordinary circumstances, within the meaning of Article 12(2) of Directive 2015/2302, before the organiser’s insolvency.
41. As a preliminary point, it should be borne in mind that, in accordance with settled case-law, in order to interpret a provision of EU law it is necessary to take account not only of the wording of that provision, but also of its context and the objectives pursued by the rules of which it is part and, where appropriate, of its origins. (6)
42. It is also settled case-law that an interpretation of a provision of EU law cannot have the result of depriving the clear and precise wording of that provision of all effectiveness. Thus, where the meaning of a provision of EU law is absolutely plain from its very wording, the Court cannot depart from that interpretation. (7)
43. Finally, to the extent that the referring Court in Case C‑45/23 questions the validity of Article 17(1) of Directive 2015/2302, it should be borne in mind that, in accordance with a general principle of interpretation, an EU measure must be interpreted, as far as possible, in such a way as not to affect its validity, and in conformity with primary law as a whole and, in particular, with the provisions of the Charter. Thus, if the wording of secondary EU law is open to more than one interpretation, preference should be given to the interpretation which renders the provision consistent with primary law rather than to the interpretation which leads to its being incompatible with that law. (8)
44. It must therefore be ascertained, at the outset, whether the wording of Article 17(1) is open to more than one interpretation.
(a) Is the wording of Article 17(1) of Directive 2015/2302 open to more than one interpretation?
45. Article 17(1) of Directive 2015/2302 sets out that organisers provide security for the refund of all payments made by or on behalf of travellers ‘in so far as the relevant services are not performed as a consequence of the organiser’s insolvency’.
46. The referring courts in both cases consider that the wording of Article 17(1) requires a causal link between the insolvency and the non-performance of the services making the coverage of refund claims conditional on the non-performance due to insolvency. The effect of that causal link or conditionality would appear to exclude from the guarantee (uncontested) outstanding claims for a refund that arose due to the termination of the contract before the insolvency.
47. The parties in their written observations have divergent views with regard to the question whether Article 17(1) clearly excludes outstanding claims or whether it could be open to more than one interpretation. Schematically, HDI Global, MS Amlin Insurance, the Belgian and Danish Governments as well as the Commission consider that the wording of Article 17(1) requires a clear causal link between the insolvency and the non-performance of the contract (or lack of conformity with that contract). The Bundesarbeitskammer, A and the Greek Government take the opposite view. The Parliament submitted that it is possible to interpret Article 17(1) in the light of the principle of equal treatment, to the effect that it covers the claims of all travellers, so that the issue of validity does not arise in the first place. The Council did not take position on that aspect.
48. In that regard, it must be pointed out that the phrase ‘in so far as the relevant services are not performed as a consequence of the organiser’s insolvency’, and more particularly the wording ‘as a consequence of’, could be read, at first sight, as meaning that the guarantee of the refund requires a causal link between the lack of performance and the insolvency. The French version of that provision, (9) as well as other linguistic versions, (10) could also be interpreted in the same way, in that they all emphasise that the lack of performance of the contract must be a direct consequence of the insolvency.
49. The issue of interpretation of that provision could be resolved if the argument of the Bundesarbeitskammer is followed, supported also by the Greek Government at the hearing, with regard to the meaning of the term ‘relevant services’. In the submissions of the Bundesarbeitskammer and of the Greek Government, the term ‘relevant services’ should be understood broadly to include any obligation of the organiser related to the travel contract, including the refund.
50. I am not convinced that the term ‘services’ should be understood as covering the claim for a refund. First, the legal nature of the refund is a claim the traveller has against the organiser. The claim of the traveller to get a refund cannot be categorised as a ‘service’ that has to be performed.
51. Second, it clearly follows from the context of which Article 17(1) of Directive 2015/2302 forms part, that the ‘relevant services’ are to be understood as ‘travel services’. The ‘travel services’ are defined under Article 3(1) as meaning the carriage of passengers, accommodation, rental of cars and any other tourist service not intrinsically part of a travel service. Article 17(5) states that for ‘travel services’ that have not been performed, refunds are to be provided without undue delay. Recital 39 refers also to ‘travel services … not being performed …’. Article 19(1) governing insolvency protection for linked travel arrangements refers to the lack of performance of ‘a travel service’. More broadly, Article 13(1), which governs the responsibility for the performance of the package, refers to the performance of the ‘travel services’ included in the package travel contract. It follows that, within the context of Directive 2015/2302, the concept of ‘services’ is to be understood within the context of a package travel contract covering travel services.
52. That being said, even if the legal claim for a refund may not be understood as a ‘relevant service’, it must be observed that it presents an intrinsic link with the performance of the travel contract. That could indicate that the consequences for the insurance coverage of the claim for a refund cannot be differentiated depending on whether the relevant claim arose from the termination of the travel contract or from the non-performance of the travel services.
53. Furthermore, it must be pointed out that Article 17(1) of Directive 2015/2302 could be understood, as the Bundesarbeitskammer essentially submitted, simply as meaning that the price paid for travel services that have already been partially provided is not reimbursed in the event of insolvency.
54. Article 17(1) of that directive could also be understood as providing for insurance coverage in all situations in which, as a result of the organiser’s insolvency, the travellers paid the price without receiving services from the organiser.
55. Understood in that latter way, Article 17(1) is a provision which enhances the effectiveness of insolvency protection by way of encompassing all situations of non-performance of the travel services as a consequence of the organiser’s insolvency, without however meaning to exclude (uncontested) outstanding refund claims.
56. Recital 39 of the directive reinforces that latter reading of Article 17(1) thereof. According to that recital, Member States must ensure that travellers purchasing a package are ‘fully protected’ against the organiser’s insolvency and they must provide security for the refund of ‘all payments’ made by or on behalf of travellers. That recital also states that Member States must ensure that the protection is ‘effective’.
57. It is also important to note that the terms in which Article 17(1) of Directive 2015/2302 is expressed bear resemblance to the terms used in the Court’s case-law in relation to the interpretation of its predecessor, namely Article 7 of Directive 90/314. More particularly, the judgment in Verein für Konsumenteninformation (11) concerned the question whether the latter provision would have to be interpreted as covering a situation in which an hotelier forces a holidaymaker to pay for the accommodation provided, claiming that the now insolvent travel organiser will never pay that sum over to him or her. The Court held that Article 7 of Directive 90/314 covered such a situation having regard to its purpose, which is to protect consumers against the risks arising from the insolvency of the organiser. The Court found that the sums paid to the travel organiser by the traveller would have to be refunded since ‘as a result of the latter’s insolvency, the services agreed upon were not supplied to him by the travel organiser’. (12) It follows from that case-law that the situations falling within the ambit of Article 7 of Directive 90/314 were to be understood broadly.
58. The phrase ‘as a consequence of the organiser’s insolvency’ used currently in Article 17(1) of Directive 2015/2302, could be understood as reflecting the judgment in Verein für Konsumenteninformation. Instead of meaning to exclude from the security against insolvency outstanding refund claims, the wording of that Article 17(1) could be understood as meaning to include all situations of risk arising from the insolvency of the tour organiser.
59. The governments that submitted written observations to the Court expressed divergent views as to the meaning of the wording of Article 17(1). Whereas the Belgian Government considered that that provision does not cover outstanding refund claims, the Greek Government (13) took the opposite view. The Danish Government submitted that EU law is not harmonised in that aspect and that Member States (as it is the case in Denmark) should remain competent to provide for a higher level of protection. (14) Such divergent views from the national governments demonstrates, at the very least, that the wording of Article 17(1) is such that it should not be considered as unequivocally excluding outstanding refund claims. (15)
60. Irrespective of the wording related to the causal link, there is one more expression in Article 17(1) of Directive 2015/2302 which can give rise to various interpretations. That provision refers to the ‘organiser’s insolvency’. However, recital 39 thereof refers more broadly to ‘liquidity problems’. As the Bundesarbeitskammer emphasised, if the term ‘organiser’s insolvency’ were to be strictly understood as the formal opening of the insolvency procedure, that would imply that the claims for refund for services which were not provided and which arose within a short time before the date of insolvency due to liquidity problems are not covered by the guarantee.
61. In view of the above, I consider that it is not entirely clear from the actual wording of Article 17(1) that travellers’ claims for a refund, which arose before the insolvency, are excluded from the protective scope of that provision. (16)
(b) The legislative history of Article 17(1) of Directive 2015/2302: whether there was a legislative intention to lower consumer protection
62. According to settled case-law, the legislative history of a provision of EU law may also reveal elements that are relevant to its interpretation. (17)
63. In its written observations as well as in the oral pleadings, the Commission put forward arguments related to the legislative history of Article 17(1) of Directive 2015/2302, which in its view lead to the conclusion that the EU legislature intended to exclude from the guarantee refund claims that arise before the organiser becomes insolvent. In order to examine the Commission’s position properly, it is helpful briefly to trace the legislative history of Article 17(1), starting with its predecessor.
64. According to Article 7 of Directive 90/314, organisers were obliged to provide ‘sufficient evidence of security for the refund of money paid over and for the repatriation of the consumer in the event of insolvency’. According to the Court’s settled case-law since Dillenkofer, (18) that provision was ‘designed to safeguard all the consumer rights mentioned in that provision and thus to protect consumers against all the risks defined therein and resulting from the insolvency of travel organisers’. (19) Those risks are ‘inherent in the contract concluded between the purchaser and the package holiday organiser’ and they ‘stem from the payment in advance of the price of the package’. (20)
65. The Commission pointed out that the overall objective of its proposal to repeal Directive 90/314, (21) was to achieve a high level of consumer protection enshrined in Article 169 TFEU. As far as the insolvency protection is concerned, that institution explained that the proposal intended to maintain the same level protection. Thus, recital 34 and Article 15 of the Commission’s proposal were based on the existing level of protection. (22)
66. However, the Commission explained that during the legislative process there was a change of course as far as the scope of the insolvency protection is concerned.
67. In that regard, the Commission refers to the Statement of the Council’s Reasons to its position at first reading of the legislative proposal. (23) In point 15 of that document the Council stated that the text (of the directive governing insolvency protection) stipulates that ‘insolvency protection should provide for adequate coverage in all likely circumstances and reflect the level of financial risk represented by the trader’s activities, but that this liability should not be open-ended’. In the same point it is stated that ‘an insolvency protection scheme’s liability should extend only to circumstances which reflect the normal assessment of risk’ and that ‘effective insolvency protection should not have to take into account highly remote risks …’.
68. According to the Commission, the wording of Article 17(1) of Directive 2015/2302, as it was finally adopted by the legislature, ‘considerably departs’ from the wording of Article 7 of Directive 90/314 and from Article 15 of the Commission’s proposal.
69. The above factors lead the Commission to consider that Article 17(1) of that directive requires a causal link between the insolvency and the non-performance of travel services which excludes outstanding refund claims.
70. The Commission’s restrictive understanding of the scope of Article 17(1) underpins Recommendation (EU) 2020/648. (24) In the terms of the preamble to that recommendation, ‘if organisers … become insolvent, there is a risk that many travellers … would not receive any refund at all, as their claims against organisers … are not protected’. (25) In order to protect travellers from that risk the Commission recommended that vouchers should be covered by protection against insolvency. (26)
71. The presentation by the Commission of the legislative history of Article 17(1) of Directive 2015/2302 raises certain doubts as to its meaning. However, that presentation does not in itself lead to the conclusion that there was a clear legislature intention to depart from the previous level of protection and from the Court’s case-law and to exclude travellers’ claims for refunds that existed before the insolvency.
72. Contrary to the Commission’s submissions, the Parliament maintained that the wording of Directive 2015/2302 is designed to safeguard the ‘continuity’ between Article 7 of Directive 90/314 and Article 17 of Directive 2015/2302. The latter provision has the objective of continuing to ensure a high and uniform level of protection of travellers, in the sense of ‘broadening and reinforcing’ that protection.
73. More particularly, the Parliament recalls that according to the case-law of the Court on Article 7 of Directive 90/314, that provision was interpreted as imposing an ‘obligation of result, namely to guarantee package travellers the refund of money paid over and their repatriation in the event of the travel organiser’s bankruptcy’. (27) That obligation of result was already clear at the time of adoption of Directive 2015/2302, there being no ambiguities to be removed or gaps to be closed in that regard. (28)
74. The Parliament further observes that ‘no provision nor any preamble’ to that directive contains an indication that the EU legislature intended to affect that obligation of result for the protection of travellers. It states that it would be contrary to the logic and the settled case-law to consider that the protection afforded under Article 17(1) of Directive 2015/2302 does not apply if the traveller exercised his or her rights to terminate the contract enshrined in Article 12(2) thereof.
75. In its oral pleadings, the Parliament also took a position on the relevance of the Statement of the Council’s Reasons. The Parliament submitted that from that statement it can only be inferred that the adaptations to the Commission’s proposal intended to bring clarifications as to the way in which Member States had to establish the mechanisms of insolvency. Those adaptations concerned mainly the calculation of the risk on the basis of factors such as the turnover, advance payments or seasonal variations. The Parliament stated, moreover, that the legislature’s intention, reflected in the last part of recital 40 of Directive 2015/2302, to ensure that effective insolvency protection should not have to take into account highly remote risks, is not related to any provision that would limit a traveller’s protection in case of termination of the contract before the insolvency.
76. As far as the Council is concerned, in its written submissions, it did not take a position on the interpretation of Article 17(1) nor, more specifically, on the question whether the EU legislature intended to exclude certain travellers’ claims from the protection against insolvency.
77. At the hearing, there was a question from the bench to the Commission and the Council to explore the possible reason behind the change of wording of Article 17(1) of Directive 2015/2302 in the course of the legislative process. In that regard, the Commission noted that Article 12(2) thereof introduced a new right for a traveller to terminate the contract in case of unavoidable and extraordinary circumstances, whereas the corresponding right to a refund was not included within the protective scope of Article 17(2) of that directive. In the Commission’s view, the level of consumer protection was not lowered compared to the level of protection afforded by the previous directive, the reason for this being that the exclusion from the insolvency protection concerns the claim arising from the exercise of a right that did not previously exist.
78. In response to the same question, the Council stated that if the Court were to consider that Article 17(1) of Directive 2015/2302 should be interpreted as excluding from the protection against insolvency travellers’ refund claims that arise before the organiser becomes insolvent, the legislature could be deemed to have taken a political decision to establish a specific protection scheme. However, the Council did not explicitly confirm that there was a legislative intention to exclude certain categories of claims.
79. The way I understand the position defended by the Commission, there is a sort of ‘counterweight’ logic explaining why, in its view, Article 17(1) excludes outstanding refund claims. The counterweight to the new right recognised for travellers to terminate the contract is the limitation of the insolvency protection of that right. As the right to terminate the contract is new, so the Commission’s argument goes, there is no lowering compared to the established level of consumer protection under EU law.
80. The problem with that position is that it relies on assumptions. The Commission stated at the hearing that this is what it ‘thinks’ is the reason for a different wording between its proposal and the text of the directive as it was finally adopted.
81. What is more, the idea that the legislature intended to create a kind of ‘half-right’, namely the right to a refund after terminating the contract under Article 12(2) of Directive 2015/2302 but without any corresponding protection against insolvency, is nowhere reflected in the recitals or in the documents on which the Commission relied. As the Parliament in essence observed, the Statement of the Council’s Reasons to which the Commission referred concerns the issue of limitation of the guarantee in case of highly remote risks which is the subject matter of another provision, namely Article 17(2).
82. There is also, in my view, inconsistency with regard to the argument related to the level of consumer protection. It is true that the right of a traveller to terminate the contract in the event of unavoidable and extraordinary circumstances did not exist under the Directive 90/314. However, if Article 17(1) of Directive 2015/2302 were to be interpreted as excluding travellers’ claims that arose before the insolvency, that exclusion should not only relate to claims arising from the exercise of the right to terminate the contract in the event of unavoidable and extraordinary circumstances, but it should also relate to refund claims arising from the exercise of the right to terminate the contract by the organiser or the traveller in other circumstances set out in Directive 2015/2302. For instance, the traveller has the right to a refund in the event of termination of the contract by the organiser under Article 12(3) of Directive 2015/2302 or in the event of termination of the contract under Article 11(5) thereof. That right to a refund already existed under Directive 90/314. (29) In such situations, consumer protection would be lowered compared to the previous scheme if it were to be considered that the relevant claims to a refund would no longer be covered by the insolvency protection.
83. In any event, taking into account that one of the co-legislators, namely the Parliament, has taken a firm position that the legislature had no intention to limit the scope of the insolvency protection under Article 17(1), it is not possible to discern a clear legislative intention to the contrary. (30)
84. In view of the above, it is necessary to consider, next, the context in which that provision occurs and the objectives pursued by the rules of which it forms part before proceeding with an interpretation which complies with primary EU law as a whole.
(c) The context and objectives of the rules of which Article 17(1) of Directive 2015/2302 forms part
85. With regard to the context of which Article 17(1) of Directive 2015/2302 forms part, it must be pointed out that the first part of the first sentence states that the security concerns the refund of ‘all payments made by or on behalf of travellers’. Article 17(5) states that ‘for travel services that have not been performed, refunds shall be provided without undue delay after the traveller’s request’. Recital 39, explaining the reasons leading to the adoption of that provision, states that travellers are ‘fully protected against the organiser’s insolvency’ and that organisers have to ensure that they provide security for the refund of ‘all payments made’. Pursuant to the same recital ‘effectiveness implies that the protection should become available as soon as, as a consequence of the organiser’s liquidity problems, travel services are not being performed …’.
86. As has been pointed out above, (31) the ‘activation’ of the insolvency protection in so far as the relevant services are not performed as a consequence of the organiser’s insolvency is to be associated with the effectiveness of the insolvency protection. Article 17(1) of Directive 2015/2302 cannot, therefore, be interpreted in a way that excludes certain categories of refund claims from the scope of insolvency protection.
87. It must also be pointed out that Article 17(2) of Directive 2015/2302 has a different scope to Article 17(1) thereof, governing the limitation to the guarantee of refunds. The relevant limitation relates to the coverage of ‘reasonably foreseeable costs’. Recital 40 explains that ‘effective insolvency protection should not have to take into account highly remote risks, for instance the simultaneous insolvency of several of the largest organisers, where to do so would disproportionately affect the cost of the protection, thus hampering its effectiveness’.
88. However, the exercise by travellers of solely their right to terminate the contract provided under Article 12(2) of Directive 2015/2302 and the associated obligation of the organiser to provide for a full refund under Article 12(4) cannot be considered to be a ‘highly remote risk’ that would exclude advance payments from the security.
89. In that regard, it must be recalled that Article 12(2) recognises the right to terminate the contract in case of unavoidable and extraordinary circumstances. The travellers have the corresponding right to a full refund. That right, as it follows from Article 23(2) and (3) of Directive 2015/2302, is imperative. (32) Article 17(1) must be interpreted in such way as to ensure the full effectiveness of the right to terminate the contract and get a full refund under Article 12(2) and not in a way that limits the effectiveness of that right. If a traveller were to lose the benefit of the insolvency protection merely because he or she terminated the contract before the insolvency, that could dissuade travellers from exercising their rights in the first place. As the Parliament in essence observed, Article 12(2) would be deprived of its effet utile if it were to be accepted that the protection against insolvency is not applicable for those travellers who exercised a right conferred by the directive.
90. More broadly, a different interpretation would put the travellers who decide to terminate the contract before the start of the package, on the basis of Article 12(1) of Directive 2015/2302, as soon as they perceive the existence of liquidity problems, in a less favourable position than travellers who decide not to do so. Indeed, in such a situation there may be travellers who will prefer to pay a termination fee and receive reimbursement of the remaining amount, pursuant to Article 12(4), instead of taking the risk of a possible repatriation because of an insolvency occurring during their travels.
91. Next, it must be observed that according to Article 17(2) of Directive 2015/2302, the security covers ‘the amounts of payments made by or on behalf of travellers in respect of packages’. The parameters for the calculation of the coverage includes, ‘the length of the period between down payments and final payments and the completion of the packages’. Recital 40 clarifies that ‘the protection should be sufficient to cover all foreseeable payments made by or on behalf of travellers in respect of packages in peak season’. (33) This, according to the same recital, will generally mean that the security has to cover ‘a sufficiently high percentage of the organiser’s turnover in respect of packages’. It follows from Article 17(2) and recital 40 that all payments made with regard to packages are included in the calculation of the insolvency protection that is based on the turnover data. (34) By contrast, the legal ground of the claim to a refund of those payments does not appear to be of any relevance for the calculation of the necessary cover.
92. Finally, the exclusion from the insolvency protection of outstanding claims would create serious inconsistency between Article 17(1) and the pre-contractual information that must be given to travellers by means of the relevant forms set out in Part A or Part B of Annex I. The content of that standard information states that ‘if the organiser or, in some Member States, the retailer becomes insolvent, payments will be refunded’. (35) It should be noted that there is no qualification whatsoever in the content of the information communicated to the traveller that protection against insolvency is excluded. It cannot be accepted, as the Bundesarbeitskammer in essence observed, that the legislature would have induced the traveller to misunderstand the documentation by giving the wrong impression in the standard information form that all travellers are protected against insolvency, if, in fact, only some travellers are protected.
93. With regard to the specific objective of Article 17(1) of Directive 2015/2302, the purpose of that provision is to protect travellers against the risks arising from the insolvency of the organiser. Under the previous Directive 90/314, the Court held in the judgment in Verein für Konsumenteninformation, that the risks arising from insolvency, inherent in the contract concluded between the traveller and the organiser, stem from the payment in advance of the price of the package. (36) Consequently, the Court has ruled that the result prescribed by Article 7 of that directive entails the grant to package travellers of rights guaranteeing the refund of money that they have paid over. The risk arising from insolvency has not changed under the current directive. Therefore, the result of Article 17(1) of Directive 2015/2302 must also be to grant to package travellers rights guaranteeing the refund of money that they have paid over including those claims that existed before the insolvency.
94. The interpretation according to which all travellers must be fully protected against insolvency, including those who terminated the contract before the insolvency of the organiser, is also borne out by the objective of Directive 2015/2302 which is, as it is set out in Article 1, to achieve a high level of consumer protection. The objective of ensuring a high level of consumer protection is also enshrined in primary law (Article 169 TFEU and Article 38 of the Charter). A different interpretation, as the Greek Government pointed out, would mean that a traveller would bear the economic risk associated with the subsequent insolvency of the travel organiser.
95. In view of the above, the context in which Article 17(1) of Directive 2015/2302 occurs and the objectives pursued by the rules of which it is part support the conclusion that the protection against insolvency also covers the refund claims of travellers which arose before the organiser became insolvent.
(d) Interpretation of Article 17(1) of Directive 2015/2302 in the light of the principle of equal treatment
96. As has already been pointed out above, (37) according to a general principle of interpretation, an EU act must be interpreted, as far as possible, in such way as not to affect its validity. Likewise, where a provision of EU law is open to several interpretations, preference must be given to that interpretation which ensures that the provision retains its effectiveness. (38)
97. In that regard, all EU acts must be interpreted in accordance with primary law as a whole, including the principle of equal treatment, which requires that comparable situations must not be treated differently and that different situations must not be treated in the same way unless such treatment is objectively justified. (39)
98. In view of the objective of ensuring a high level of consumer protection – enshrined in primary law (40) – and the more specific objective of Article 17 of Directive 2015/2302, which is to protect travellers against the risk arising from insolvency, (41) the situations covered by that provision must be compared in particular by reference to the economic risk borne by travellers.
99. In this instance, the situation of travellers who make a refund claim after terminating their travel contract (due to unavoidable and extraordinary circumstances) should be compared with that of travellers who make a refund claim because the travel services are not performed due to the organiser’s insolvency. As the Greek Government emphasised at the hearing, both categories of travellers are exposed to the same financial risk related to the advance payments they made to the organiser which subsequently becomes insolvent.
100. The Commission, the Council and the Belgian Government, as well as the Parliament in the alternative, maintained that there is no inequality of treatment between the different categories of travellers because their situation is not comparable. On the one hand, travellers who terminated their contract before insolvency have no contractual claim for the performance of the travel services; they only have a pecuniary claim for refund. On the other hand, travellers who have not terminated their contract at the time of insolvency have a claim for performance of the travel services.
101. However, the difference described by the Commission, the Council, the Parliament and the Belgian Government, in the legal relationship of the contractual parties at the time of the insolvency is not the appropriate measure of comparison. Despite the difference in the contractual relationship, the travellers in both categories have the same refund claim to all payments made. As I have already pointed out, and as noted by the Greek Government, the reference point for the comparison is the financial risk borne by the travellers. Given that the risk in actually obtaining the refund of all payments made by travellers who have terminated their contract and those who have not yet terminated at the moment of insolvency is the same, these risks cannot be treated differently without the principle of equal treatment being infringed. This is a fortiori the case in view of the objective sought by Directive 2015/2302 which is to ensure a high level of consumer protection for all travellers. (42)
102. In view of the foregoing, I consider that Article 17(1) of Directive 2015/2302, read in the light of the principle of equal treatment, must be interpreted as meaning that the security for the refund includes the claim for a refund of all payments made by or on behalf of travellers, including those travellers who terminate the contract before the organiser becomes insolvent.
(e) The principle of legal certainty
103. In its oral submissions, HDI Global maintained that in order to calculate the extent of the risk assumed in fixing the insurance conditions (43) and the premiums to be paid by organisers, it relied on the relevant legal texts. Given that the text of Article 17(1) of Directive 2015/2302, in HDI Global’s view, clearly requires a causal link between the insolvency and the non-performance of travel services, a departure from that interpretation would run counter to the principle of legal certainty, which is a fundamental principle of EU law.
104. In that regard, as has been pointed out above, (44) if it were absolutely clear from the very wording of Article 17(1) that it requires such a causal link, the Court would be unable to depart from that interpretation. However, as it was demonstrated above (subsection (a)), the wording of Article 17(1) does not unequivocally exclude the claims of travellers who terminated their contract due to unavoidable and extraordinary circumstances. It is therefore open to interpretation. According to the approach taken in this Opinion that interpretation should lead to the conclusion that all payments made have to be protected in the event of insolvency.
105. Furthermore, it should be recalled that, according to the settled case-law of the Court, the interpretation which, in the exercise of the jurisdiction conferred on it by Article 267 TFEU, the Court gives to a rule of EU law clarifies and defines the meaning and scope of that rule as it must be or ought to have been understood and applied from the time of its entry into force. It follows that the rule, as thus interpreted, may, and must, be applied by national courts even to legal relationships which arose and were established before the judgment ruling on the request for interpretation, provided that in other respects the conditions for bringing a dispute relating to the application of that rule before those courts having jurisdiction are satisfied. (45)
106. It is only very exceptionally that the Court may, in application of the general principle of legal certainty inherent in the EU legal order, be moved to restrict for any person concerned the opportunity to rely on a provision which it has interpreted with a view to calling into question legal relationships established in good faith. Two essential criteria must be fulfilled before such a limitation can be imposed, namely that those concerned should have acted in good faith and that there should be a risk of serious difficulties. (46)
107. However, in the present case, neither the insurance companies which are parties in the main proceedings, nor the Belgian Government asked the Court to impose temporal limits on the effects of the judgment to be delivered on the grounds of legal certainty. Even if such a request had been submitted, those parties have not invoked any serious economic repercussions of such a kind that would justify placing a temporal limitation on the effects of the future judgment if the Court were to follow the interpretation proposed in the present Opinion. (47)
108. It is also relevant to note that the contracts concerned in the case in the main proceedings predate Commission Recommendation 2020/648 which could suggest that the travellers’ claims that arose before the insolvency are not protected. The insurance companies which are parties in the main proceedings could not have designed their insurance policy on the basis of the interpretation followed in that recommendation. Moreover, as has already been pointed out above, (48) the basis for the calculation of the guarantee is the amount of all payments made by or on behalf of travellers in respect of packages in accordance with Article 17(2) of Directive 2015/2302. That provision gives a clear indication to the insurance companies as to the basis for the calculation of the necessary cover.
109. Incidentally, it can be noted that at the outbreak of the COVID-19 pandemic, specific measures were put in place by EU law to enable Member States to use the full flexibility foreseen under State aid rules to support travel organisers and insurers as well as to protect travellers from the consequences of insolvency of the travel organisers. (49)
110. In view of the above, the principle of legal certainty does not preclude an interpretation according to which the guarantee for the insurance under Article 17(1) of Directive 2015/2302 covers all payments made by travellers before the insolvency.
111. In view of all of the foregoing, Article 17(1) of Directive 2015/2302, in view of its wording, context and purpose and in the light of the principle of equal treatment, must be interpreted as meaning that the security for the refund covers not only those payments made by or on behalf of travellers where the trip or holiday did not take place as a result of the organiser’s insolvency, but also those payments made by or on behalf of travellers who terminated the contract due to unavoidable and extraordinary circumstances, within the meaning of Article 12(2) of Directive 2015/2302, before the organiser’s insolvency.
The second and third questions referred in Case C‑771/22
112. The second and third questions in Case C‑771/22 are asked by the referring court in the event that its first question is answered in the negative. By those questions, which can be answered together, the referring court asks, in essence, whether Article 17(1) of Directive 2015/2302 must be interpreted as covering those travellers who terminated the contract before the insolvency of the travel organiser due to unavoidable and extraordinary circumstances at least in the following two cases: first, when the insolvency proceedings were opened during the period when the travel was scheduled to take place, and second, when the termination of the contract and the insolvency have their origin in the same exceptional circumstance.
113. Should the Court decide to follow the interpretative approach outlined in this Opinion, there will be no need to answer those questions. If that were not the case, my response to those questions is in the negative. If the scope of the guarantee under Article 17(1) does not cover the claims for a refund that arose before insolvency, the scope of that guarantee may not be different depending on the circumstances described by the referring court. As the Commission pointed out, the breadth of application of that legal provision may not vary depending on the dates on which the travel was supposed to take place or depending on whether the circumstances alleged to justify the termination of the contract led to the insolvency of the organiser.
114. In view of the above, I take the view that for the purposes of the interpretation of the scope of Article 17(1) of Directive 2015/2302, it is not decisive whether the trip was scheduled to take place during or after the insolvency or whether the insolvency is due to the same unavoidable and extraordinary circumstances that were invoked by the traveller to terminate the contract pursuant to Article 12(2) of that directive.
V. Conclusion
115. In the light of the foregoing, I propose that the Court answer the questions referred by the Bezirksgericht für Handelssachen Wien (District Court for Commercial Matters, Vienna, Austria) and the Nederlandstalige Ondernemingsrechtbank Brussel (Brussels Companies Court (Dutch-speaking), Belgium) as follows:
Article 17(1) of Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015 on package travel and linked travel arrangements, amending Regulation (EC) No 2006/2004 and Directive 2011/83/EU of the European Parliament and of the Council and repealing Council Directive 90/314/EEC, in view of its wording, context and purpose and in the light of the principle of equal treatment,
must be interpreted as meaning that the security for the refund covers not only those payments made by or on behalf of travellers where the trip or holiday did not take place as a result of the organiser’s insolvency but also those payments made by or on behalf of travellers who terminated the contract due to unavoidable and extraordinary circumstances, within the meaning of Article 12(2) of Directive 2015/2302, before the organiser’s insolvency.
In the alternative, for the interpretation of the scope of Article 17(1) of Directive 2015/2302, it is not decisive whether the trip was scheduled to take place during or after the insolvency or whether the insolvency is due to the same unavoidable and extraordinary circumstances that were invoked by the traveller to terminate the contract pursuant to Article 12(2) of that directive.