Liability concerns for agents using foreign operators

CATO urges travel advisors to be wary of potential accountability

The Council of Australian Tour Operators (CATO) has raised concerns for retail travel advisors that look directly to overseas operators when packaging itineraries and creating custom tours for clients.

Managing Director of CATO, Brett Jardine, says the practice has the potential to create “unintended consequences”, including being liable if accidents occur to the travel advisor’s clients.

CATO flagged a number of examples, whereby Australian travel agents could be working directly with a local ground operator in France to develop a private cycling journey through the Champagne region, a New York shopping tour being handled by a US-based operator or even a bricks-and-mortar agency contracting airport transfers for clients directly with a local service provider.

Brett Jardine, CATO Managing Director
Brett Jardine, CATO Managing Director

“Where an agent is piecing together components from offshore suppliers – as opposed to suppliers with a commercial presence in Australia – there is the possibility for unintended consequences like the agent being deemed a tour operator and, therefore, potentially liable in the event of incidents and accidents in destination,” Jardine said.

Even if you’re working with trusted, super premium, luxury operators abroad, the possible legal ramifications remain if something goes wrong. As always, CATO recommends that agents seek out and build relationships with ATAS-accredited tour operators and wholesalers for client—and their own—peace of mind.
Brett Jardine, Managing Director, Council of Australian Tour Operators

“There is nothing to stop anyone from choosing how their business operates in this regard, but retail agents are encouraged to be well-informed from a legal perspective and also confirm their insurances provide appropriate coverage in cases like this,” Jardine added.

CATO Associate Member spokesperson Aaron Zoanetti, Head of the Travel & Events division at Melbourne based law firm Pointon Partners said, “Whilst having a robust set of Booking Conditions is an effective way to help protect your interests if something goes wrong during travel, Booking Conditions themselves can provide a false sense of security.”

Significantly, Zoanetti added that, “If you package up components from different suppliers and sell at an inclusive price on your own terms then, irrespective of what your Booking Conditions say, there is a real risk of crossing over from ‘agent’ to ‘principal’. If a customer suffers personal injury due to the negligent actions or omissions of your local supplier or operator, then you could be directly responsible.”

Zoanetti said that as soon as the retailer crosses over from ‘agent’ to ‘principal’, the services the retailer supplies to the customer are not limited to simply arranging the booking, but extend to the actual operation of the tour, including services provided by local suppliers.

“Things can go wrong. But if you have the right legal documentation in place, you should be able to mitigate the risks associated with the negligent acts of your suppliers,” he concluded.

CATO urges travel agents who may think they’re exposed this kind of risk to seek independent legal advice.

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