Opinion of Mr Advocate General Tesauro delivered on 4 December 1997. - Verein für Konsumenteninformation v Österreichische Kreditversicherungs AG. - Reference for a preliminary ruling: Bezirksgericht für Handelssachen Wien - Austria. - Directive 90/314/EEC on package travel, package holidays and package tours - Extent of protection against the risk of the organiser's insolvency. - Case C-364/96.



European Court reports 1998 Page I-02949



Opinion of the Advocate-General

1 The question submitted to this Court by the Bezirksgericht für Handelssachen (District Commercial Court), Vienna, upon which a preliminary ruling is sought in the present proceedings, concerns the interpretation of Article 7 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (1) (hereinafter `the Directive').

In particular, the national court seeks to determine whether the purchaser of a `package' holiday - who has therefore paid the holiday organiser for the services relating to the stay at the holiday destination - is entitled, under Article 7 of the Directive, to the refund of hotel expenses which he has paid (a second time) directly to the hotelier where, because of the supervening insolvency of the holiday organiser, the purchaser of the holiday was compelled to make a second payment to the hotelier who would otherwise have prevented him from leaving the hotel.

Legislation applicable and the facts

2 Article 1 of the Directive states that the purpose of the Directive is `to approximate the laws, regulations and administrative provisions of the Member States relating to packages sold or offered for sale in the territory of the Community'. Article 7 of the Directive, the interpretation of which is sought in the present proceedings, provides: `The organiser and/or retailer party to the contract shall provide sufficient evidence of security for the refund of money paid over and for the repatriation of the consumer in the event of insolvency'. Article 8 goes on to provide that Member States may adopt or retain more stringent provisions in the field covered by the Directive to protect the consumer.

3 In Austria, the Directive has essentially been implemented by Paragraph 31b et seq. of the Law on Consumer Protection. Article 7 of the Directive is implemented by a special order of the Minister for Economic Affairs. (2) Paragraph 3 of that order, which is the relevant provision in this case, provides that the travel organiser must, when entering into a contract of insurance with an insurance company authorised to operate in Austria, guarantee the holidaymaker (a) the refund of money paid over, in so far as the travel services have not been provided, whether wholly or in part, as a result of the organiser$s insolvency and (b) the refund of the costs of repatriation incurred as a result of the organiser$s insolvency.

4 I now turn to the facts which gave rise to these proceedings. From 9 September to 16 September 1995, Mr Kurt Hofbauer and Mrs Hedwig Hofbauer were on holiday in Greece, staying at the `Club Fodele Beach'. They, along with another 25 holidaymakers, had purchased a package holiday for themselves and their daughter from the company Karthago-Reisen Ges.m.b.H. (hereinafter `Karthago'), whose insolvency became known on 15 September 1995, which was the day before the Hofbauers were due to return home. As a direct consequence of Karthago$s insolvency, the owner of `Club Fodele Beach' prevented the unfortunate tourists from leaving the hotel until they had paid all their hotel charges. In order to be able to catch their return flight home, which was included in the price of the holiday, the Hofbauers, along with the other holidaymakers, therefore paid their bill, which amounted to DR 157 542.

The Verein für Konsumenteninformation (hereinafter `the plaintiff'), the consumer association to which the Hofbauers applied in order to enforce their rights, then requested reimbursement of the hotel charges from Karthago$s insurers, Österreichische Kreditversicherungs AG (hereinafter `the defendant'). The defendant refused to grant any refund, whereupon the plaintiff made application to the Bezirksgericht für Handelssachen.

The question referred for a preliminary ruling

5 The national court, on the view that Paragraph 3 of the Austrian order relating to insurance is to be interpreted in conformity with the Directive, has decided to refer the case to this Court in order to ascertain which services are covered by the `security for the repatriation of the consumer'. More precisely, the question it has submitted is worded as follows:

`Is Article 7 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours to be interpreted as meaning that sums paid by a consumer to the provider of services (e.g. a hotelier) at the holiday resort because that person would have prevented him from returning home if he had not paid those sums are included within the protective scope of that provision as "security for the repatriation of the consumer"'?

6 The national court therefore asks the Court whether hotel charges paid a second time by the purchaser of a package holiday directly to the hotelier are included, in the event of the organiser$s insolvency, within the necessary costs of repatriation referred to in Article 7 of the Directive. It should be emphasised that this question is strictly limited to the case where the holidaymaker is prevented from leaving the hotel if he does not pay for his accommodation.

It must also be made clear that since Article 7 provides that `the refund of money paid over and ... the repatriation of the consumer' must be guaranteed in the event of the insolvency of the organiser, the national court plainly assumes that sums paid directly by the consumer to the hotelier cannot be included within the `money paid over', that is to say the money already paid to the travel organiser in respect of the same services. Here I would for the moment merely stress that a reading of Article 7 as a whole is nevertheless essential for correctly determining the scope of protection which the Directive is intended to afford the consumer in the event of the insolvency of the travel organiser.

7 In this connection I would first mention that this Court has already had occasion to rule that `the result prescribed by Article 7 of the Directive entails the grant to package travellers of rights guaranteeing the refund of money that they have paid over and their repatriation in the event of the organiser$s insolvency'. (3) Secondly, the recitals to the Directive repeatedly refer to the objective of consumer protection, (4) and finally, it seems to me there can be little doubt that the purpose of Article 7 is precisely that of protecting the financial interests of consumers against the risk of the insolvency of the operator from whom the package holiday was purchased.

In other words, Article 7 of the Directive is intended to shield the consumer from the risks arising from the insolvency of the organiser and/or the seller of the package travel. It is also quite clear that Article 7 - in requiring the guarantee to cover both the refund of money paid over (only, of course, in so far as the purchaser of the package holiday has not received the services bargained for) and the costs of repatriation - is intended to afford the consumer full and complete protection. (5)

8 This is necessarily the premiss from which one must proceed in determining whether the protection offered by the Directive also includes the refund of hotel charges paid directly by the consumer to the hotelier for the specific purpose of being able to leave his holiday destination, and, therefore, as a condition for being able to return home.

When the problem is put in those terms, it seems to me that costs relating to the provision of hotel services incurred by the consumer in a case such as this must undoubtedly be considered to be included within the necessary costs of repatriation and, more generally, within the insurance cover required by the Directive. The protection which the Directive is designed to afford the consumer would indeed be impaired if the case where the consumer is compelled by the hotelier to pay for services which ought to have been paid for by the travel organiser and which have not been paid for precisely because of the organiser$s supervening insolvency were held to fall outside the scope of the Directive.

9 In the course of these proceedings, it has nevertheless been argued, in particular by the defendant, that the expression `repatriation of the consumer' appearing in Article 7 of the Directive refers only to travel expenses necessary for repatriation and not to the provision of any other services. In any event, the absence of any contractual relationship between the hotelier and the holidaymaker makes it quite clear that the holidaymaker cannot be required to pay accommodation expenses directly to the hotelier, even in the event of the insolvency of the organiser. It would follow that, if the holidaymaker does pay such expenses, no claim can be made under the insurance which, under the Directive, must only refund money paid over to the organiser - in so far, of course, as the consumer has not enjoyed the services paid for - and any transportation costs (air, train or ship and, possibly, taxi fares) necessary for repatriation. Any payment for services provided by the hotelier would even constitute negligence on the consumer$s part since there was no obligation to make such payment and the consumer therefore has no avenue for recovering the money paid to the hotelier other than bringing legal proceedings in loco.

10 In this connection, I would observe first of all that the concept of `repatriation of the consumer' cannot be interpreted so narrowly that only transport costs are covered; it must also include, more generally, any expenses necessary for the repatriation of the consumer, including, in the instant case, hotel costs, at least in so far as their payment is a condition for being able to leave the hotel and return home. Nor do I see that the circumstance that the holidaymaker has made a payment which he was not legally obliged to make has any bearing on the issue, given the objectives of the Directive. In particular, I do not think that it can reasonably be argued that the purchaser of a package holiday who pays for hotel accommodation when compelled to do so by the hotelier can be deemed to have acted negligently in such a way as to forfeit the full and complete protection afforded him by the Directive.

Clearly, as the Court stated in Dillenkofer, `neither the objective of the Directive nor its specific provisions require the Member States to adopt specific provisions in relation to Article 7 to protect package travellers from their own negligence'. (6) Indeed, Article 8 of the Directive allows the Member States to enact more stringent provisions in the interests of consumers. It should be remembered, however, that in that judgment the Court also affirmed that `in determining the loss or damage for which reparation may be granted, the national court may always inquire whether the injured person showed reasonable care so as to avoid the loss or damage or to mitigate it'. (7)

11 It seems to me indisputable that missing the arranged flight, the price of which was included in the package, would have considerably increased the costs of repatriation, owing to the purchase of a new and more expensive air ticket on a scheduled flight and to possible additional accommodation costs at the holiday destination, and would therefore have entailed higher costs for the insurer.

In conclusion, I am of the view that money paid by the purchaser of a package holiday directly to a hotelier in settlement of services provided by the hotelier must be considered as necessary repatriation expenses, at least where, as in the case before the referring court, the hotelier, in the absence of payment for the services in question, prevents the consumer from leaving the hotel because of the supervening insolvency of the travel organiser. (8) Money paid by consumers in such circumstances must therefore be refunded by the insurance cover, as required by Article 7 of the Directive.

12 I do not think that this solution is weakened by the argument put forward in these proceedings that persons not party to the contract, and in particular hoteliers, would thereby be encouraged to act in an ungentlemanly manner towards their guests in order to obtain money not paid by the travel organiser in the event of the travel organiser$s insolvency. Likewise, I find unconvincing the point made by both the defendant and the French Government that consumers would thereby be penalised because the risks the insurer is required to underwrite, and consequently the total price of the package holiday, would be increased.

As to the first aspect of the argument, I would merely observe that the possibility, or rather the risk, of a propagation of situations in which holidaymakers are held hostage by hoteliers not wanting to be deprived of payment for the services they render certainly has no bearing on the question and certainly cannot affect the type of protection the Directive is intended to afford consumers. Moreover, I am sure that the vast majority of hoteliers would be quite averse to behaviour of that kind.

As to the second aspect of the argument, I would observe first that, since it is precisely hotel and transport services which are normally included in a package holiday, it would be difficult to imagine how the costs of insurance would increase if the insurer were required to refund hotel expenses incurred in a case such as that now before this Court. For example, one could imagine that, in the situation where the insolvency of the organiser is announced and known to the hotelier even before the unfortunate holidaymakers arrive, they would not even be allowed to set foot inside the hotel. It is undisputed and indisputable that in such a case the insurer would be required to ensure both the repatriation of the holidaymaker and the refund of the money paid over. This proves, if indeed proof were necessary, that the refund of hotel expenses in the case under consideration here does not entail any additional risk for the insurer, as indeed was confirmed at the hearing by the defendant itself in answer to a specific question on this point.

13 Finally, it seems hardly necessary to say that the solution I propose certainly does not mean that the consumer might be reimbursed twice over. This observation, at first glance seemingly superfluous, is needed, however, because, as became apparent at the hearing, the French Government - which considers that money paid directly to the hotelier by the consumer is not a necessary cost of repatriation - maintains that the protection afforded to the consumer by the Directive would not be impaired, even in the present case, since the consumer would nevertheless receive a refund of money previously paid over to the organiser in relation to the hotel costs.

As has already been explained, (9) the consumer in the present case was clearly obliged to pay the hotelier for services the provision of which should have been guaranteed by the travel organiser but which was not, precisely because of the organiser$s supervening insolvency. It follows that the consumer who has made such a payment is at least entitled to a refund of money paid to the travel organiser for such services. However, no such refund has been made and there is no evidence in the file that it will be made. As became abundantly clear at the hearing, the argument put forward by the French Government is based upon an abstract assumption which does not hold good in the instant case. (10) This is further confirmed by the observations made during the course of the proceedings by the plaintiff, which sought to demonstrate that, should the Court find that the payment of hotel expenses made (a second time) by the Hofbauers was not necessary for their repatriation, the sums in question could be refunded as money paid over.

14 Refunding money paid over would certainly be one possible avenue. What is important, however, is that, in accordance with the purpose of Article 7 of the Directive, the financial interests of the consumer are fully protected against the risks of the insolvency of the organiser and/or seller of the holiday. What matters, therefore, is that the consumer must not have to pay for the same service twice, unless he has been manifestly negligent, which was not the case here.

Approached from this angle, the question for a preliminary ruling may be answered in the terms in which it is put. In my view, the reply should therefore be that a payment made at the holiday resort by the consumer to the hotelier in order that he can leave the hotel following the insolvency of the travel organiser must be included in the costs necessary for ensuring the repatriation of the consumer and, on any view, in the costs refundable under the Directive.

Conclusion

15. In view of the foregoing considerations, I propose that the Court answer the question submitted by the Bezirksgericht für Handelssachen, Vienna as follows:

Article 7 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours is to be interpreted as meaning that sums paid to the hotelier by the consumer at the holiday resort fall within the scope of that article, in particular for the purposes of repatriation, if the hotelier would have prevented the consumer from leaving the hotel if those sums had not been paid.

(1) - OJ 1990 L 158, p. 59.

(2) - Reisebüro-Sicherungsverordnung - RSV (Order concerning insurance bonds held by travel agents) in BGBl. No 881 of 15 November 1994, p. 6501.

(3) - Joined Cases C-178/94, C-179/94, C-188/94, C-189/94 and C-190/94 Dillenkofer and Others [1996] ECR I-4845, paragraph 42 (judgment was delivered on 8 October 1996).

(4) - See, in particular, the eighth to eleventh recitals in which it is stated, inter alia, that `disparities in the rules protecting consumers in different Member States are a disincentive to consumers in one Member State from buying packages in another Member State' and that `the consumer should have the benefit of the protection introduced by this Directive'. In addition, the last two recitals specifically deal with consumer protection in the event of the insolvency of the organizer.

(5) - Dillenkofer (cited at footnote 3) once again provides guidance here in stating: `The protection which Article 7 guarantees to consumers could be impaired if they were made to enforce credit vouchers against third parties who are not, in any event, required to honour them and who are likewise themselves exposed to the risks consequent upon insolvency' (paragraph 64).

(6) - Judgment referred to at footnote 3, paragraph 71.

(7) - Idem, paragraph 72.

(8) - In the present case, the plaintiff maintains that physical violence would have been used to prevent the Hofbauers from leaving the hotel. Given that this is a question of fact for the national court to determine I would say that the `prevention' need not be characterised by physical violence and that hostility of a lesser degree which nevertheless exerts an irresistible pressure upon the holidaymaker at the relevant time, such as cancelling or sending away a taxi called to take him to the airport, or refusing to hand over his luggage, would be sufficient. In the instant case, suffice it to say once again that the question put to this Court by the referring court is founded upon the assumption that, if he had not been paid, the hotelier would have prevented the unfortunate holidaymakers from leaving the hotel by any means at all.

(9) - See paragraph 8 above.

(10) - It seems hardly necessary to add here that, had the holidaymaker been provided with a refund of the money paid to the travel organiser in respect of the hotel accommodation, the proceedings now before the referring court and this Court would not have been brought.