Travel Reference
In-Depth Information
In British Columbia, travel agencies are required
to contribute to the compensation fund for a value
of $100 or an amount equal to 0.05 out of the
gross sale, whichever is greater (regulation 17(3),
Travel Industry Regulation 2004). A travel agen-
cies may not need to make further contribution if
the topic value of the compensation fund is at least
$2,000,000 and the travel agencies has paid for suc-
cessive contribution periods totaling 3 years (regu-
lation 17(4), Travel Industry Regulation 2004). It
is most unfortunate that in Australia, every travel
agency's contribution is fixed at $7,430.00 for prin-
cipal location and $5,000.00 for branch location
irrespective of the capacity and size of the travel
agency's business scale (Fee Schedule, Travel Com-
pensation Fund). At present, TCF will no longer
be in operation in Australia commencing from 30
June 2014 with claims paid until March 2015.
to the TICF, such an amount of compensation is
by far a large amount. By comparison, the Hong
Kong Travel Industry Compensation Fund cov-
ers loss for a maximum of 90 percent out of the
outbound fare or HK$10,000, whichever is lower
(rules 4(1) and (2), Travel Industry Compensation
Fund (Amount of Ex Gratia Payments and Finan-
cial Penalty) Rules). In relation to loss sustained
by outbound travelers in respect of an accident,
the maximum amount claimable is HK$100,000
for every medical expenses incurred in the destina-
tion country, expenses incurred for funeral outside
Hong Kong or for the return of the dead body to
Hong Kong, and visitation expenses incurred by
the relatives of the outbound traveler to the des-
tination country (rule 5C, Travel Industry Com-
pensation Fund (Amount of Ex Gratia Payments
and Financial Penalty) Rules). In British Colum-
bia, the maximum amount claimable is $5,000 for
each person in respect of a claim (regulation 22(1),
Travel Industry Regulation 2004). In Australian
Capital Territory, traveler is entitled to claim the
amount of the actual financial loss suffered less
any amount that he has recovered or can recover
from a source other than the compensation fund
(section 149(2), Agents Act 2003).
Apart from the maximum limit of amount which
is claimable, the proposed TICF further requires
that the loss sustained by the traveler must be such
a loss that is not covered by his travel insurance or
that he had failed to pursue his claims through the
Tribunal for Consumer Claims or other legal proce-
dure. These two requirements merit further discus-
sion. The Tourism Industry (Tour Operating and
Travel Agency Business) Regulations 1992 neither
requires outbound traveler to purchase travel insur-
ance nor requires travel agencies to advice travelers
on the benefit of being insured (clauses 12 and 5.2,
Fourth Schedule, Tourism Industry (Tour Oper-
ating Business and Travel) Regulation 1992). The
existing travel insurance coverage that is currently
available in the market protects travelers against trip
cancellation, physical injury, medical evacuation or
repatriation, loss of baggage, loss of travel deposit
as well as against travel agency's insolvency.
It is important to note that the entitlement to
compensation under TICF is strictly circumscribed
to loss not covered by travel insurance. It is ques-
tionable as to the status of travelers who travelled
without any travel insurance coverage. Would the
travelers be able to claim under the TICF if they
do not purchase any travel insurance? If the answer
is in the affirmative, it would seem that the TICF
favourly treats imprudent travelers who travelled
without travel insurance against those who are
insured. Aside for practical and uniformity pur-
poses, the TICF needs to be reconciled with estab-
lished principles of law to do fairness to travelers
4.3
Procedures for claiming compensation
4.3.1
Type of claims
Under the proposed TICF framework, any
aggrieved 'individual' or traveller seeking for
redress may resort to the TICF. Eligibility to claim
is, however, circumscribed to cases in respect of (i)
fraud, negligence, or breach of terms and condi-
tions of package tour; and (ii) insolvency of the
travel agent company, subject to the settlement of
all claims through legal procedure or insurance
claims. It would seem to be the case that individual
other than travelers who purchase package tour
from licensed travel agencies may also claim under
the TICF. In the absence of specific interpretation,
the term 'individual' is ambiguous. The term may
refer to traveler's next of kin or where the traveler
is incapacitated or a minor, the traveler's guardian
ad litem
. In the context of claim made following
the travel agency' insolvency, it is questionable as
to whether the term 'individual' may also refer
to the travel agency's creditors. If the answer is
affirmative, it would appear that the compensa-
tion claimed may be of an excessive sum, causing
undue burden to the rest of travel agencies.
4.3.2
Conditions and amount of claim
In relation to claims made by traveler, several pre-
requisites must be complied with. Travelers, who
purchased package tour from non-contributor of
the TICF, will be barred from claiming. Such pre-
requisite penalizes imprudent travelers in that by
purchasing tour packages from unlicensed travel
agencies, the payment made by the travelers is
not protected. The maximum amount of claim
which can be made under the TICF is 80% of the
amount of loss claimed subject to the total amount
approved by the Board of Trustee or Committee.
In the light of type of claims which may be made
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