Is Malta’s method of insolvency protection, in line with directive 2015/2302, protecting travellers sufficiently? : a comparative analysis

Abstract

The study will focus on one essential aspect of the Package Travel and Linked Travel Arrangements Directive (2015/2302) – Insolvency Protection. The author will seek to determine whether Malta has successfully implemented a mechanism to protect consumers effectively against the insolvency of package travel organisers and Linked Travel Arrangements (LTAs) as stipulated by the Directive. The obligation to provide protection according to the Directive is primarily the responsibility of the organiser/retailer of packages and traders that facilitate LTAs. However, there is also substantial responsibility that Member States (MS) have. They must ensure that such protection is provided by those obliged to provide it. The author will introduce the topic with a brief insight of insolvency protection, as provided for in the Directive, highlighting some ambiguities in the Directive’s wording in this respect. The author is of the opinion that the effectiveness of implementation depends on the clarity of directions and requirements set by the Directive. A brief analysis of the transposition process of the Directive into Maltese legislation and if this was done completely in line with the Directive then follows. The study then examines in detail the fundamental element of this work, which is the actual system of insolvency protection chosen by Malta. To enable better criticism, a comparison will be drawn between aspects of the Maltese and other systems as implemented by three selected MS, including an attempt regarding insolvency protection requirements tied to LTAs. The Commission (COIN) has confirmed that the sale of travel services qualifying as LTAs is complex and MS are still encountering difficulties in determining what constitutes an LTA. Finally, a non-exhaustive list of recommendations will be tendered, which could assist the Maltese authorities in moving a step forward towards the full attainment of the Directive’s primary intention – consumer protection. The author would like to state that for a number of years, he worked with the Licencing and Enforcement departments within the Malta Tourism Authority and was also appointed as a member of the Insolvency Fund Managing Board when it was set up. Certain facts and opinions stated in this study were garnered through his personal experience.