§ Mr. Rhodes Jamesasked the Secretary of State for Trade whether his Department has incurred any liabilities as a result of litigation arising from the collapse of tour operating companies in the Court Line group in August 1974.
§ Mr. BiffenIn August 1975, the then Secretary of State for Trade gave an indemnity to the Tour Operators Study Group Trust Fund Limited (TOSG) that for a period of seven years he would meet any liability arising from legal proceedings as a result of the implementation of arrangements whereby TOSG, as trustees of moneys held against the failure of certain tour operators, met fully all valid claims to the extent of the money available (less certain retentions for foreseeable costs). The Air Travel Reserve Agency (ATRFA), then newly created, would meet all remaining valid claims. In order to ensure that customers of the tour operators did not receive payments amounting to more than the losses they had incurred, TOSG required them, as a condition of being paid, to assign to ATRFA their rights as unsecured creditors in the liquidation of the tour operating companies.
The making of these assignments became the subject of litigation between, on the one hand, the banks who had provided the moneys on behalf of the tour operators and, on the other, the ATRFA and TOSG. The High Court hearing was concluded in November 1980 and judgment delivered on 27 February 1981. TOSG's legal costs up to the end of December 1980 amounted to £38,870 and now fall to be paid by my Department under the terms of the indemnity.
Parliamentary approval for the new service for the payment will be sought in a Supplementary Estimate for the Vote of the Department of Trade. Pending that approval, the necessary expenditure will be made by a repayable advance from the contingencies fund.