Riccardo Nardi, head of legal at the Association of British Travel Agents (ABTA), is glowing.

But it is not because he has been basking in the sun on an exotic holiday.

Mr Nardi is flushed with success following his victory against a line-up of some of the most powerful European airlines.Before the verdict, Mr Nardi and his team stood outside the Court of Appeal to pose for two publicity shots.

In the first, they are pictured in high spirits, brandishing a dummy judgment in jubilation.

But they also took a more sombre back-up shot - just in case the result went the wrong way.

They should not have worried.

British Airways, Virgin Atlantic and Lufthansa's appeal against a November High Court decision that the trio had attempted to mislead their customers collapsed, leaving the airlines open to what could amount to as much as a £50 million bill to reimburse travel agents.

The ABTA team: (left to right) Ellen Potts (monitoring officer), Riccardo Nardi (head of legal), Susan Peer (executive officer), Simon Bunce (solicitor), Michelle Arahamson (secretary), and Stephen Balonwu (barrister)The dispute arose over a passenger service charge (PSC), which is marked as a tax on air tickets.

David stood up to Goliath and sued the three airlines in what was effectively a representative action on behalf of travel agents, and ultimately consumers.

In May, the court held that describing the charge as a tax was misleading to customers, and ordered the airlines to return the cash to travel agents.

In his judgment, Lord Justice Sedley said: 'The defendants sought to use their controlling position in order to require travel agents to mislead the public.' For the action, ABTA's in-house team had little back-up in the way of law firm clout.

Mr Nardi explains: 'We saw no added value.

All we saw was a doubling of fees.' Instead, he opted for a lean operation and instructed counsel direct, Philip Shepherd and Bajul Shah of 24 Old Buildings.'They provided the sort of admin support you usually get from solicitors, including a number of days within ABTA's offices working with my team, at a fraction of the cost.

If the Bar only knew how to position itself and market itsel f effectively, its junior counsel could be sitting on a gold mine,' he says.

'There is no real difference between solicitors and counsel,' says Mr Nardi, who is a barrister by training.

'We will go for a firm of solicitors on the basis that we can do it with a quote in advance.'With a budget of up to £200,000 for outside advice, Mr Nardi likes to play it safe with his outside lawyers.

He jokes: 'If any law firm sent me a general bill, I would kick them in the mouth.' Mr Nardi says his approach is to use the best lawyer for the job at the best price.

He is happy to instruct counsel direct and will cut out the solicitor as middleman if there is no obvious value added by instructing a firm.

But for the next stage - the recovery of between £20 million and £50 million on behalf of around 1,000 businesses - ABTA has instructed City firm Nicholson Graham & Jones and forensic accountant Deloitte & Touche.

Mr Nardi is chairing the management committee, which will be run as a recovery fund.Mr Nardi says that Nicholsons' fee quotes were 'competitive and impressive'.

Plus, ABTA paid an 'incentive bonus', so what the firms are paid depends on what they recover.

As he explains: 'If it is a project, we will go for a fixed fee whenever we can.

The bottom line is that the legal department doesn't exist for the sake of existing.' He says that in-house lawyers want their advisers to be keen to win their business: 'They have got to be hungry for your business.

As a client, you notice these things.

On the management side, I am always concerned about external spending.

You have to make sure you are being wise with that.' Mr Nardi is not only head of legal, but also ABTA's company secretary.

He joined the legal department in 1990 for a mini-pupillage and became counsel and company secretary in 1996.

Three years later, he re-wrote ABTA's articles of association and took it through a restructuring which removed all traces of the old 1970s trade association model and radically streamlined the association's decision-making process.

The newly unified structure took effect just as Mr Nardi turned 33 last month.

Mr Nardi is also company secretary and counsel to ABTA subsidiary the Travel Training Company, which is the travel industry's largest training provider.

He is in charge of its corporate and commercial work and is currently taking it through a rebranding following recent acquisitions in other sectors.

The legal department is small, with only three lawyers including Mr Nardi, and its turnover is low - the last lawyer who left was a former Slaughter and May assistant who joined Airtours' legal department in 1998.

The three lawyers handle consumer claims, policy, lobbying at national and EU level and regulation of trading practices through ABTA's code of conduct.

The code of conduct has recently been extended with cutting edge on-line trading provisions.Brandishing his new purchase, a WAP phone, Mr Nardi is no technophobe.

He says that the travel industry has already been a victim to cyber squatters, with ABTA.net itself being squatted on by a hotel group.But that is not all.

The airlines have been at it again.

He says: 'Airlines have been bashing agents on the Internet by restricting access to data.

We have some serious competition concerns about that.' True to form, Mr Nardi is hoping to redress the balance between airlines and travel agents.

But he is doing it with one eye on his pocket, and is planning to instruct Danish lawyer Jan-Erik Svennsson of top Copenhagen firm Gorrissewn Federspiel Kierkegaard to take care of the competiti on issues.

He says: 'We find we can achieve better value outside London for legal advice in certain areas of law.

Also, we are presently working on several EU competition issues and will probably instruct a Danish lawyer.

UK knowledge is less relevant to the issues in question, the lawyer is outstanding, Danish legal fees are cheaper and it costs less to go to Copenhagen than Manchester.' Mr Nardi explains: 'We have two halves.

There's the Mr Nice side for members, and the regulatory side, which is more unusual.' The 'Mr Nice Guy' side involves providing advice and assistance to ABTA members, ranging from company law, employment, travel and aviation, consumer contracts and intellectual property issues.

The department also monitors public liability insurance, which Mr Nardi predicts will be an expanding area.

He explains: 'The General Insurance Standards Council is due to take on the role of regulator of all forms of insurance, including travel insurance sold by ABTA members.

Its proposals could cost the travel industry over £2 million a year in extra fees.' One would have thought that with all this action, the three-lawyer department would have no time for fun, but a lean-looking Mr Nardi insists: 'We are a very irreverent department.

I'm a mad, cake-fetish, fatty person.

We've got cake and chocolate.

We are the fat piggy department.' Mr Nardi is obliged to return from EU lobbying laden with Belgian chocolates.

With all these perks, its no surprise that he is swamped with CVs from City lawyers looking for change of scene.WHAT IS ABTA?The Association of British Travel Agents looks after 2,300 UK travel agents and tour operators, with 7,000 branch offices.

ABTA members account for the sale of over 95% of travel arrangements in the UK.

Members range from vertically integrated multinational corporations to small high street family businesses.

There are 80 staff members at ABTA, most of which are involved in analysing member accounts for bonding (under the ABTA scheme of financial protection) and financial fitness purposes.ABTA's LAW FIRMSAnnual budget for outside legal advice: £150,000 to £200,000 No established panel; uses 'horses for courses' approach to instructing outside counsel.

Recently instructed firms include: -- City firm Nicholson Graham & Jones (property/construction, litigation, including passenger service charge recovery process post-Court of Appeal);-- City firm Rowe & Maw (company/ commercial);-- Manches in London and Oxford (commercial/insolvency);-- City firm Denton Wilde Sapte (insolvency);-- Eversheds' Middlesbrough office (standard form employment contract sent to all the association's 2,300 members);-- City firm Herbert Smith (European Union competition law);Instructs counsel direct, for example in the recent passenger service charge litigation (see above).-- Philip Shepherd and Bajul Shah of 24 Old Buildings - PSC case; and-- James Flynn of Brick Court (European Union/UK competition).RECOMMENDED FIRMS-- Hill Dickinson in Liverpool;-- Hampshire-based Piper Smith & Basham;-- City firm Hobson Audley; and-- Mason Bond in Leeds (Stephen Mason acts for many members in trading consumer litigation matters).