Q: When our agency recently had a major dispute with ARC, my partner suggested that we take the matter to the travel agent arbiter. I laughed and said that there was no such thing as an arbiter and that there is no way to arbitrate disputes with ARC. Am I wrong?
A: I don't blame you for not having heard of the travel agent arbiter, as he works in relative obscurity. Although his decisions are public and searchable, they are sent only to those on a list of paid subscribers, and they garner almost no attention in the trade press or the general media.
It has been two years since any Legal Briefs column mentioned a decision of the arbiter, and it has been four-and-a-half years since any Travel Weekly news article covered an arbiter case.
The arbiter's name is William McGee, and his office on the aptly named Battle Street in Manassas, Va. He has served in the post for almost 25 years.
Any ARC agency is entitled to file a complaint against ARC if the complaint alleges that ARC breached the Agent Reporting Agreement. The arbiter can order ARC to correct the matter and can even award damages and attorneys fees if you win.
The agency's complaint needs to be specific and cannot involve matters of "general applicability" or "ARC policy matters." Also, any dispute already in court is excluded.
You cannot file a complaint against a carrier unless the carrier consents to arbitration of the dispute. Except for three rare instances, no carrier has ever consented.
Any ARC agency can also appeal ARC's determinations that the agency did not exercise reasonable care in safeguarding its assigned e-ticket numbers or ARC's decision to disapprove an application for change of ownership or location.
Over the course of decades, agencies have filed only a relatively small number of complaints and appeals. Certainly part of the reason for the paucity of cases is that agencies do not know their rights.
The vast majority of arbiter cases are complaints filed by ARC against agencies that refuse to surrender their ticket stock and airline plates after ARC has terminated the agency's appointment. These scofflaw cases invariably result in an arbiter order requiring the agency to do as ARC wishes.
As you might know, ARC has the right, without any prior notice to you, to lift your traffic documents and plates, prohibit use of ARC-assigned ticket numbers and notify the carriers and your GDS, if ARC suspects that your agency is committing fraud and presents a "clear and present danger" to the carriers because you are allegedly engaging in any one of 17 listed activities, such as reporting cash refunds against credit card sales.
If ARC takes such action against your agency, your only remedy is to file an appeal with the arbiter asking for reversal of ARC's action. You have only a short time to do so, and you must comply with several stringent prerequisites, including posting a personal guaranty.
You do not need an attorney to file an arbiter complaint or appeal or to defend against ARC's complaint, but it definitely helps to have one, especially one familiar with the arbiter program. You can find out more about the arbiter's jurisdiction and rules at www.arccorp.com/forms/pp/iah/current/iah100.pdf, or contact him directly at [email protected] or (703) 530-9002.
Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for Legal Briefs, email him at [email protected].