LOS ANGELES -- A travel attorney here is suggesting travel lawyers
and trade associations create a model state law for regulating
travel sellers to replace a patchwork of measures with "ill-defined
and poorly conceived provisions."
The attorney, J. Thomas Cairns, represents travel agencies and
is a critic of California's Seller of Travel Law, adopted in 1995
with support from the state's retail travel industry.
In a law article, Cairns unleashed a barrage of criticism
against California for warning out-of-state travel firms with Web
sites that they must register and comply with the state law if they
do business on line with California residents.
He said the move creates confusion and imposes a "substantial
burden on the travel industry which, almost by definition, involves
doing business in multiple jurisdictions."
Cairns said model laws have been drafted by the National
Conference of Commissioners on Uniform State Laws and the American
Bar Association -- and voluntarily adopted by all 50 states with
He distributed his article, "U.S. Sellers of Travel Laws: Model
Codes or Regulatory Morass?" at the e-Commerce for Travel
conference in Los Angeles.
The article was first published in 1999 in the International
Travel Law Journal. In the article, Cairns outlined several flaws
in the California law.
For example, it places the burden of processing registration and
administering the program on the attorney general's office,
bypassing the state's Department of Consumer Affairs, which
regulates other trades and professions.
This is a "serious mistake," Cairns said, because the attorney
general's office is a law enforcement agency with "neither the
experience nor the administrative resources necessary" to regulate
In addition, the law exempts those who sell only ground
transportation, airlines and cruise lines, all of which have caused
harm to consumers with their failures, he said.
Cairns also said the state's restitution fund is an ineffective
and "unwieldy apparatus" that should be replaced by a simple
"It is also terribly inefficient to set up a whole claims
administration system simply for a single industry in order to
administer a very small number of claims," he said.
The California law requires that travel sellers deposit 100%
payments received in a trust account -- and not withdraw funds
except to pay vendors -- until travel is completed.
A travel seller is permitted to post a bond in lieu of a trust
account, but the law places restrictions on that bond that make it
difficult for an agency to comply, he said.
Cairns said a dishonest seller has no qualms about operating
outside of the trust account.
The attorney general's "audits of the accounts are expensive,
infrequent and most likely to occur only after a problem arises and
it is already too late."