This post is also available in: Español
One of the main consequences of the declaration of the state of emergency to manage the COVID-19 health crisis was the restriction on people’s freedom of movement, which led to mass canceling of trips and events of all types.
This left thousands of travelers grounded without knowing when they would be able to travel to their destination or what rights they had in such extraordinary circumstances, and article 36 of Royal Decree-Law 11/2020, of March 31, adopting additional emergency measures to face the social and economic impact of COVID-19 (“RDL 11/2020”) expressly regulated consumer and user protection in this context.
Now in the de-escalation phase and at the start of the “new normal,” Royal Decree-Law 21/2020, of June 9, on urgent prevention, containment, and coordination measures to deal with the COVID-19 health crisis (“RDL 21/2020”) has been approved. Among other matters, RDL 21/2020 has amended article 36 of RDL 11/2020 to adapt it to the most current reality and, particularly, to Commission Recommendation (EU) 2020/648, of May 13, 2020, on vouchers offered to passengers and travelers as an alternative to reimbursement for cancelled package travel and transport services in the context of the COVID-19 pandemic.
Measures adopted under RDL 11/2020
Article 36 of RDL 11/2020, in its initial wording, established consumers’ right to terminate the purchase of service agreements they had entered into when their performance was prevented by the measures adopted during the state of emergency. However, this termination right, which had to be exercised within 14 days, could only be accepted when the revised proposals offered by each of the parties (vouchers offered in place of reimbursement) did not provide a solution restoring the agreement’s mutuality of interests. It was considered that a revised proposal could not be obtained after 60 days, since the performance of the agreement became impossible without the parties reaching an agreement on that proposal.
Therefore, during the state of emergency, companies (both airlines and other means of transport) that had to cancel bookings due to the pandemic were not required to automatically refund the ticket price paid by passengers. However, they did have to reimburse consumers and users when (i) the revised proposal (the offer of a voucher or alternative ticket for a subsequent date) did not remedy the interests of one of the parties, or (ii) an agreement was not reached on that proposal within that 60-day period.
Article 36 of RDL 11/2020 therefore also established that, when the performance of the agreement was impossible, the business owner was obliged to repay the amounts paid by the consumer (except incurred costs broken down and provided to the consumer) in the same form as the payment and in a maximum of 14 days, unless the consumer expressly accepted other terms.
Regarding package trips canceled as a result of COVID-19, the initial wording of RDL 11/2020 allowed the consumer to be given a voucher (for an equal sum to the relevant refund) to be used within one year of the end of the state of emergency. Only if the consumer had not used the voucher at the end of its validity period could they request a full refund from the company.
Regarding these package trips, the initial wording of article 36 also established reimbursement by the organizer (or retailer) if the consumer or user terminated the agreement under section 2 of article 160 of the consolidated text of the Spanish General Consumer and User Protection Act and other supplementary acts, as long as the service providers included in the package trip agreement had refunded the full amount of their services to the organizer (or retailer). That refund must be issued within 60 days of the agreement termination date or the date the service providers have issued the refund.
Developments under RDL 21/2020
RDL 21/2020 does not introduce many changes in article 36 of RDL 11/2020 but it does include important nuances:
- It no longer only affects agreements that cannot be performed as a result of the measures adopted during the state of emergency, but also applies to agreements affected by the measures adopted in the de-escalation and new normal phases.
- The 14 days the consumer has to terminate the agreement are calculated from the moment its performance became impossible, if the measures adopted preventing its performance continue in effect (this was not specified in the previous wording).
- Revised proposals (vouchers) must be subject to the consumer’s or user’s acceptance.
- For package trips, after the validity of the voucher has ended without the consumer or user using it, the business owner must issue a full refund on any payment made by the consumer or user within 14 days.
- The reference to reimbursement based on article 160 of the Spanish General Consumer and User Protection Act in relation to canceling package trips is removed.
We are aware that article 36 of RDL 11/2020 may be amended again due to the changing reality in current times, so we will continue to report developments in this area in this blog.
Authors: Cristina Albiol and Ana Sánchez
This post is also available in: Español