ECOVIS Miškinis, Kvainauskas ir partneriai advokatų kontora
The law of tourism of the Republic of Lithuania determines that from September 1, 2011, all travel agencies are obligated to have insurance. The amount of this insurance should be 5 percent of the income of the last year (but not less than 50,000 litas). This insurance should defend the rights of tourists in the case of bankruptcy and insolvency of the travel agency. The Lithuanian State Department of Tourism would be able to suspend the license of such an agency. But there are many problems on the travel market due to this law.
First, the new regulation of this law is not fulfilled because the insurance companies do not provide such services as travel company insurance. So the travel agencies are not able to get the insurance, and by formal attitude they violate the law.
Moreover, there is the possibility that the new regulation violates the civil code of Lithuania. The civil code of Lithuania also regulates the case of insolvency of travel agencies. There is a point in the civil code that the parties of the tourism service agreement are the tourist and the travel organizer, not the travel agency. Travel agencies are only brokers and are not able to ensure the service. So the requirement for insurance is not proportional.
There is another problem – no post-legislation for the new regulation was adopted, so the law of tourism is only formal and no sanctions for the violation of the law can be applied.