Regulation getaway

Terrorism has left some holiday companies facing bankruptcy.

And the in-house legal team at Thomsons tells Andrew Towler that the industry is battling another scourge - regulation

Despite the UK recently sweltering in temperatures and humidity in excess of those in Mexico City, and the ongoing threats to aeroplane security, taking a summer holiday has never stopped being an option for Britons.

The UK's largest tour operator, and biggest beneficiary of this national obsession, is Thomson Holidays, now part of German holiday giant TUI - the biggest tourism and services group in the world.

Other members of the group include Britannia Airways and travel agents Lunn Poly and Travel House - casting a web over most sectors of the industry.

Head of the in-house legal team at Thomson's main office in Camden, London, is Richard Churchill-Coleman, who operates under the title group legal counsel.

He heads a department of 11 people, immediately overlooking four senior legal advisers specialising in commerce, aviation, property and IT/IP.

While Mr Churchill-Coleman's team looks after the company's legal matters, on the floor below another legal department handles customer complaints.

Mr Churchill-Coleman attributes his fortuitous career path in equal proportion to 'luck and skill'.

He says: 'I originally qualified as an aeronautical engineer.

Then, following my CPE, I was taken on by Norton Rose to specialise in aviation law.'

From here, he says he chose to take the step in-house, moving to Virgin Atlantic as a junior legal adviser, and then to DHL in Brussels as aviation counsel.

He moved to Britannia Airways as its sole legal adviser and then finally into his current role in the summer of 2000, after a company restructuring.

'I tend to do more corporate commercial work now as head of the group, as opposed to aviation,' he says.

'The issues you deal with are of a fairly similar nature on a day-to-day basis.

As you would expect in a high-profile industry.

I deal with unfair contract terms, competition law, and some advertising, and give advice on the formulation of products and a variety of commercial contracts.'

He is also involved in the acquisition of companies, although the TUI Group 'has become a little more discerning' in this regard of late.

Inevitably, the terror attacks of 11 September had an effect on the travel industry in several ways.

'The amount of airline work increased following the need to focus on security,' says Mr Churchill-Coleman.

'The government subsequently amended the Terrorism Act 2000, so that now they have the power to ask travel companies information about passengers before planes depart,' he continues.

'As yet they haven't exercised this power, but it's something we'll have to be prepared for.

'The issue of aircraft being insured against acts of terrorism also arose after 11 September.

This remains something of a hot topic with the government, but with Britannia in our stable, we have to keep close tabs on developments.'

The first port of call when Thomson encounters commercial dilemmas is Henry Bankes, a lawyer with Thomson since 1998.

'There are really two sides I deal with - the tour operating side, Thomson, and the distribution channel, travel agents like Lunn Poly,' he says.

'I used to work a lot more on the Thomson side, but the business has become more integrated now and my client base widened as I now have far more exposure to the distribution side of the business than when I first joined.'

Examples of deals Mr Bankes has recently worked on include the securing of a shirt sponsorship deal with Tottenham Hotspur Football Club and the company's hiring of a new cruise ship for the next two summers.

'I have a really broad remit of work, you never really know what will come up day to day,' he says.

'Ironically, the quietest times are the peak holiday seasons, as all commercial deals are usually tied up by then.'

Mr Bankes trained in London with private client firm May, May & Merrimans, before moving in-house.

'I find it far more enjoyable,' he says.

'Not only are there no billing worries, but you also enjoy a much freer relationship with clients and are on a constant learning curve.'

Mr Churchill-Coleman agrees.

He says: 'I always wanted to get into business, where I felt I could offer more to a company.

When companies outsource legal work to firms, miscommunication can occur and this results in increased bills.

One of our contributions is that we take away this misunderstanding, because we know our business backwards and offer more user-friendly contact.'

Another member of the team who made the transition in-house is Nigel Vickery, senior legal adviser on commercial property.

He worked in private practice for Masons until 1990, when he searched for 'a bit more excitement' and worked as legal adviser to the Body Shop for ten years.

'It's a whole different world in-house, you work with people with different skill sets and different levels of expertise,' he says.

'We all have our specialist areas, but we work together when necessary to get the job done - it is intellectually quite challenging.'Mr Vickery deals with a 'broad spectrum of property work, although it is mostly on a landlord and tenant basis'.

He explains: 'I handle property issues on a day-to-day basis for all of Lunn Poly's 750 shops, as well as the Travel House properties, which total about 150, and our variety of other agents in the north of England and Scotland.

'In addition, we have the Thomson and Lunn Poly head offices in London and Leamington Spa, respectively, and a number of call centres dotted around the country.'

Mr Vickery concedes that owing to there being 'more than enough work to keep us busy', it is sometimes necessary to farm work out to an external firm - with Leamington Spa practice Wright Hassall the beneficiary.

'They are local to Lunn Poly so they still do some of its work, such as landlord and tenant litigation,' Mr Vickery says.

'It's basically a case of balancing what we can cope with in-house and what we have to pass on to external lawyers.'

As for the future of the travel market, Mr Churchill-Coleman says the increasing consumer regulation the government is trying to impose will be contentious.

'We as a travel company are trying to provide an economical product to the public,' he says.

'However, there is a half-political, half-legal battle to strike a balance in order to try and make a profit at the same time.'

He continues: 'The industry is now mature from a competition perspective and consumers are aware that they are reaping the rewards of low prices.

As a trade-off, for the choice and low cost we offer, we have to apply a number of standard terms and conditions to the holidaymaker.'

'However, there is ongoing pressure from the regulators, who are trying to chip away at these terms to increase the power of the consumer.

We are concerned that the increased regulation will ruin the current economic model and result in more expensive holidays for the public.'

The travel industry has been through a rough time recently, with companies cutting back staff and dropping prices to the point of bankruptcy, and it has narrowed to four main providers and their various subsidiaries: Thomas Cook, Airtours, First Choice and Thomson/TUI.

However, the demand for holidays is the same, and if the current equilibrium can be maintained there could be good times on the horizon for travel operators and their employees.

And even the legal department of a travel company deserves a holiday after all its hard work - made slightly easier by its employers.

'There are obviously perks to the job,' says Mr Churchill-Coleman.

'We get discounted holidays from Thomson and Britannia have a flying club for employees.'