State to compensate clients of bankrupt travel agency

Issues

An appellate court has ruled that the state of Hungary must pay compensation to clients of a bankrupt travel agency given that EU law was not correctly transposed into national legislation, daily Népszabadság said on Friday.

EU law requires that travel agencies have sufficient collateral to refund clients and pay for their return home, even in the case of bankruptcy, a rule that was incorrectly legislated in Hungary, the paper said. The compensation the state may have to pay depends on how many clients of bankrupt travel agents decide to turn to the court after the precedent-setting ruling.

The paper named five travel agents that have gone bankrupt in the past five years, which is the statute of limitations for such cases, and noted that refunds and compensation due the clients of just one, Aeroviva, add up to HUF 1 bln.

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