Associate Arbitrator Andrew Davis takes a look at the growing importance of arbitration to resolve disputes in the travel industry.
Disputes are an everyday occurrence. They can range from family to multi-national commercial disagreements, even to the result of a Presidential election. It may be easier to get involved in a dispute than resolving it but ADR methods have helped smooth the way to finding solutions acceptable to the parties.
So too with travel disputes. For the consumer, disappointment about key aspects of the holiday saved up for and keenly looked forward to can give rise to much anger. Thankfully, most issues can be dealt with at local level and at the time to the consumer’s satisfaction but this is not always the case. So, Travel Arbitration for Holidaymakers run by Hunt ADR in association with ABTA has helped resolve consumer claims which cannot be dealt with by agreement, by means of arbitration. It provides binding decisions on the issues which both parties can feel confident have been fully considered by the arbitrator, and at a low cost and within a reasonable timeframe.
Arbitration can take many forms. There can be no arbitration unless both parties agree to its use, and the rules that then have to be adhered to. These govern the way the arbitration is run. By the same token, larger commercial disputes often have arbitration agreements governed by the Arbitration Act 1996, which in itself allows for the parties to agree how they want the arbitration to run, from timings to witness evidence.
There is of course cost associated with arbitration, with the arbitrator charging a fee as opposed to a judge who is seemingly free. The reality is of course that a judge is not free. Whilst the issue fee for issuing proceedings used to be miniscule, today the cost of doing so for a claim of between £10,000 – £100,000 is 5% of the claim (4.5% if done on line), plus fees for even a Consent Order made by the court. Therefore, for a claim of £100,000, the issue fee alone is £5,000. And whilst the substantial costs in conducting litigation can be mimicked by an arbitration largely following the litigation process leading to a full hearing, for example by the appointment of expensive solicitors, barristers and experts, it does not need to be so. The parties can agree a more slimline procedure if appropriate.
In addition, the arbitration process is confidential. This can be especially important in commercial disputes, where bad publicity can cripple a commercial organisation, and a bad precedent can cause longer lasting damage to other such cases.
All this applies equally to commercial travel disputes. This pandemic has unfortunately shown how challenging it can be for this sector to survive. The pressures start with the holidaymaker cancelling their holidays because travelling to a particular country is not allowed. They want their money back, holiday companies want airlines to reimburse them, and so it goes on.
The propensity for disputes between travel providers is wide. Which is why a reasonably simplified arbitration procedure can be so advantageous for travel providers keen to resolve their commercial disputes. Costs can be kept to a minimum, as arbitrator fees are fixed, the procedure allows for proper consideration of the issues but is reasonably quick, and it is confidential. Travel Arbitration Commercial Service (TACS) run by Hunt ADR provides all this. In these difficult times especially, the last thing a travel business needs is a commercial dispute. If agreement cannot be reached, having this arbitration scheme provides an economic and efficient method of resolving it in a way the industry can have confidence in.
Hopefully the pandemic will be over in due course but as set out at the outset, disputes will always happen even in the best of times. This arbitration process at least provides the way out for the parties which does not involve litigation, high costs and the courts.
See more about Travel Arbitration.