ByEd Perkins, Tribune Content Agency
The concept of force majeure, “Act of God” in some constructs, is well established in law. The basic idea is that unexpected events that seriously disrupt human activities—hurricanes, earthquakes, epidemics, floods, you name it—can be grounds to cancel or delay a contract. If you have a prepaid service like an air trip, even if your payment is nominally nonrefundable, recourse should be available and balanced: If your trip is cancelled or otherwise impractical due to a force majeure event, you should be entitled to a full and timely refund, regardless of whether you of the airline cancels first. But that’s not how it works:
- U.S. Department of Transportation rules—and similar rules in much of the world—require airlines to make full and timely refunds for cancelled flights, but only if they cancel before you do.
- No such government rules apply to other segments of the travel industry at all.
- And if you cancel first, even due to a force majeure event, you have no refund recourse from any type of travel supplier other than whatever the supplier offers.
As long as I’ve been doing this, “Cruise Passengers’ Rights” has been near the top of my list of the world’s shortest books. Typical cruise contracts give cruise lines wide latitude to change itineraries and other details without having to refund your payments. All in all, once you pay, you’re at the cruise lines’ mercy to deliver what they promised.
That’s why a new proposal by U.S. Federal Maritime Commission (FMC) for cruise line refunds to consumers is potentially important. Specifically, they say when a cruise line cancels a sailing or delays passenger boarding by at least 24 hours due to any reason other than a governmental order or declaration, it must pay full refunds within 60 days following a passenger refund request, or within 180 days for a government declaration. Yes, those refund deadlines are ludicrous: 6 or 18 days would be more appropriate. But at least it’s a start.
The new rules provide balance in cases where a cruise line cancels. Also new is that the FMC addresses the issue of force majeure impacts on consumers. It says that if a consumer cancels a sailing that may be affected by a public health emergency, the cruise line must offer a full-value credit toward a future booking. That’s pretty much what most have been doing, anyhow, but this is the first instance I’ve seen of a government agency’s recognizing the concept of special-circumstance exemptions for consumers who initiate a cancellation.
These days, problems with refunds due to Covid-19 epidemic seem to be by far the leading source of consumer irritation across all segments of the travel industry. With most suppliers, a consumer who cancels before the supplier does has no recourse other than what is the supplier offers. And that’s become a major pain point for consumers who have been justifiably reluctant to take previously booked trips during the Covid-19. Many believe that, with a force majeure event, they should get full refunds, even for nonrefundable payments, and even when they cancel before the supplier does.
So far, however, almost all suppliers are sticking to the current policies: If you cancel first, at best, all you get is credit toward a future trip—often with an inconveniently short time window. Even worse, some suppliers—most notably vacation rental owners—have been tagging renters with cancellation fees and charges that are not mentioned at all in the rental contracts.
I’m not opposed to cancellation penalties, in general, if they’re set at reasonable levels. They allow suppliers to offer lower prices than they could absent such “fences.” But the concept of force majeure should apply to consumers as well as suppliers. That’s why the new FMC proposals, weak as they may be, are at least a small step in the right direction.
(Send e-mail to Ed Perkins at email@example.com. Also, check out Ed’s rail travel website at rail-guru.com.)
(c) 2020 TRIBUNE CONTENT AGENCY, LLC.– Aug. 10, 2020