Happy campers

Soaking up the sun on a beach is not part of the brief for travel specialist law firms.

Instead, they could be dealing with the fall-out from the package tour rules, reports stephen ward

As most lawyers contemplate their summer holidays, some - for whom the idea is more associated with business than pleasure - will be getting down to work.

There is an upside and downside to representing clients in the travel trade, as described by Sarah Lacy of Leeds firm Mason Bond, the nearest thing the country has to a niche travel law firm.

'There is quite an informal atmosphere.

You find a lot of people high up in travel companies have come up from being representatives abroad.

'That tends to encourage people with a happy-go-lucky attitude,' says Miss Lacy, who becomes the firm's sixth partner, and the fourth in the travel department next month.

Around 80% of Mason Bond's work is travel-related.

She says she has never worked in any other area of law, 'and I can't imagine I would want to'.

But the nature of the industry means that it is on duty around the clock and so are its lawyers.

'At any time I could be called to deal with an emergency,' she says.

'You have to be able to advise them immediately.' It is not unknown to have to fly out to advise on the spot, which is less attractive than it sounds - dealing with a crisis when all around are sunning themselves.

The travel industry is still small compared to many other sectors, and the 20 or so firms doing significant amounts of work reflect that.

They have tended to expand their travel law expertise as the industry has grown over the past 20 years.

'We try to provide a one-stop legal service for companies in the travel industry,' says Cynthia Barbor, partner with mid-sized City firm Nicholson Graham & Jones, and head of the firm's travel and leisure law unit.

'As companies they have all the usual legal requirements, such as employment, property, corporate, and tax.' But those requirements have a specialist side to them; employment will often be partly overseas, and pricing and advertising will have a multi-national element too.

'It is a very regulated industry,' she says.

Nicholsons' clients include 200 tour operators, among them Kuoni Travel and Thomson, as well as travel agents, hotels and car hire firms.

Miss Lacy says the size and atmosphere of the travel industry makes it different from the retail sector, where many of the big players expect exclusivity from their lawyers.

In travel, clients are happy for a firm to act both for them and for a rival.

'That way they get the expert industry knowledge,' she says.

'It is just the way the industry has always been.

We co-operate quite a lot.' In the same way, many clients also use different firms for different work, rather than a single one-stop shop.

The almost family nature of the industry, and the fact that it has grown up with its lawyers, has made it hard for new entrants to break in, although as with another fast-growing area, sports law, many firms are trying.

Established clients seem to stick with firms they know, while aspiring entrants to the industry tend to choose a lawyer with a safe pair of hands.

For this reason, many new travel businesses trying to exploit the Internet went to the established firms for advice.

Ms Barbor says that sector of the industry has probably levelled off now, after generating a lot of work up to last year.

She says some have gone out of business, though none she was advising.'There are several which are selling flights, but people are still more wary about buying holidays on the Internet.

They want something more than a Web site, somebody they can ask about it in person,' she says.The same handful of firms often acts for trade associations.

Nicholsons advises the Federation of Tour Operators, and fellow mid-sized City firm Field Fisher Waterhouse, commonly held up as another of the top firms in the field, acts for the Association of International Tour Operators.

Peter Stewart, one of two partners at the head of Field Fisher's aviation, travel and tourism department, says for trade associations the advice tends to be more general.

For example, the firm runs advice hotlines for members facing litigation.

The volume and value of work for these associations may not be great, but it is all part of being part a network of clients and expertise.

'It is clearly a case of great oaks from little acorns will grow,' he explains.

The firm's existing great oaks include the Thomas Cook group, which it advised in a recent joint venture with British Airways.

The industry is sufficiently cohesive and scattered around the UK, and the number of specialists sufficiently small, that geographical location is not a critical factor in gaining work.

Miss Lacy of Mason Bond says: 'We spend a lot of time in London anyway, but relationships with clients are not affected by being not in London.' Length of time in the industry is more important, she says.

'We've been in the industry 15 years, building up expertise over time.

We have experience with small operators, specialist operators and mainstream operators, so they all know we've knowledge of a broad spectrum of matters.' Mason Bond's clients include Thomson, JMC, Cosmos, and BA Holidays.

The existing firms are helped by the distinctive nature of the travel trade, which means the contacts with the clients tend to stay within the industry, and new clients are set up by the same people, and tend to stick with their legal contacts.

'We find that personnel from one operator move from company to company and will take their lawyers with them.

Even though it's a new company they will have knowledge of the existing services out there and tend to use the same well-known firms.'Mason Bond, as a specialist travel firm, with only small family and criminal law departments making up the rest of the firm, divides its travel law department into dedicated specialist areas: a litigation department, a commercial department dealing with drafting contracts, other commercial advice, and an employment department for travel law employment issues.

Miss Lacy says there are different employment regulations for each country and even quite small travel companies will operate in several countries.

Medium-sized firms such as Nicholsons and Field Fisher organise their business by having a specialist department working full-time on travel, plus a network of travel industry experts spread through the firm, doing work such as employment and tax with non-travel clients as well.The only area which divides law firms is the fast-growing field of consumer litigation, where firms act for claimant or defendant, but never both.

Miss Lacy says: 'We only act for defendants.

That's what our clients want.' Mr Stewart at Field Fisher Waterhouse has been defending holiday companies and insurance companies for 20 years, and does no claimant work.He picks out two factors behind the growth of claims.

'There has been an increase in group claims.

And there has been an increasing tendency for people to look for compensation generally.

I think particularly with accidents there is an attitude on behalf of some claimants to look for a sort of cathartic exculpation.' Holiday litigation has been transformed by the Package Travel, Package Holidays and Package Tour Regulations (which apply equally to business travel), a statutory instrument which came into force at the end of 1992.

These made the tour operator in Britain liable for any part of a package holiday - the flight, the hotel, and anything included in the package, effectively a one-stop defendant for customers' claims.

This in turn has led to a growth in business for solicitors recovering those damages on behalf of English tour operators at the expense of overseas hotels and so on.Solicitors also point to the extension of cheap packages in less developed countries where basic hygiene is lacking, and an increase in holidays where all food is included in the price, so that every person on the tour eats the same lukewarm buffet and goes down with the same stomach bug.A major catalyst for a growth in claims was a massively publicised case which began six years ago, involving victims of eight notifiable illnesses on the Colombian island of San Andres.

The potential implications for the holiday company were so great that it instructed a top ten City litigator in its defence.The defendants eventually settled, although the details of the payout are cloaked by a strict confidentiality clause.All these changes have shifted the economics of holiday litigation.

Until recently, for a case to be viable, clients needed to be backed by holiday insurers, or be legally aided, or the claim had to be big enough for conditional fee agreements.But Sheffield-based Irwin Mitchell, which represented the holidaymakers in the San Andres case, and is the biggest travel litigation claimant firm - built on the back of its personal injury expertise - maintains that by using economies of scale it has opened a market even where none of these avenues of funding applies.

Clive Garner, the partner who heads the firm's international travel litigation group, which now has 22 full-time fee-earners in its Birmingham office, says that as well as suing British operators under the package tour regulations, they claim damages overseas as well, typically where there is a road accident which is not part of the package holiday.

In those cases the defendant will usually be an insurance company.

His cases have included victims of criminal assaults, hijackings and kidnaps.

Does all this not put him off going on holiday himself? 'Only a very small percentage of holidays end in accidents,' he says.

'But I am always quite careful.' Stephen Ward is a freelance journalist