The European Court of Justice (ECJ) has ruled that consumers can reclaim money from travel organizers after their insolvency, even if they canceled their trips due to 'unavoidable and extraordinary circumstances' such as the COVID-19 pandemic.

This landmark judgment arose from cases in Belgium and Austria, where travelers sought refunds after canceling their 2020 trips due to the pandemic, followed by the insolvency of their travel providers.

The court established that travelers whose vacations are canceled due to a tour operator's bankruptcy should be treated the same as those who cancel for extraordinary reasons, ensuring equal treatment under EU law.

Under EU law, consumers are entitled to a full refund if they do not embark on their package holiday due to unavoidable circumstances, reinforcing consumer rights in the travel sector.

Initially, insurers of travel companies, such as HDI, refused to pay refunds, arguing that cancellations related to the pandemic were not covered under their policies.

The ECJ rejected HDI's argument, asserting that EU law entitles travelers to full refunds when they cancel trips for unavoidable reasons, regardless of the provider's insolvency.

The court emphasized that under EU law, travelers can withdraw from contracts in cases of 'unavoidable and extraordinary circumstances' and claim full refunds, thereby enhancing consumer protection.

This ruling is significant not only for pandemic-related cancellations but also for future natural disasters, as travelers affected by events like wildfires or volcanic eruptions can seek refunds through insolvency insurance.

National courts in both Belgium and Austria must now make final decisions based on the ECJ's ruling, ensuring full protection for package travelers against the insolvency of tour operators.

Karolina Wojtal from the European Consumer Centre highlighted the ruling's importance for German consumers booking with foreign travel providers, ensuring they are protected under EU law.