When a Client Threatens Litigation

It's every travel professionals nightmare—when a client chooses to bring litigation into the mix.

Whether it's for a simple issue or a situation that's much more complex, we connected with Jeff Ment, Managing Partner of Ment Law Group, who has decades of experience in counseling travel companies, from operators to vendors and trade associations.

Reasons why clients might go the litigation route can include everything from matters related to COVID insurance and miscommunications over travel dates and accommodations to displeasure with a supplier or experience. Often, Ment explains, tour companies can get embroiled in situations where they're not actually at fault.

"There are so many components that go into a trip, that if any one of them goes wrong, or causes a problem, tour companies can get sucked into a lawsuit or be blamed," Ment said. "Being that you're the company or planner who arranged the trip and picked 'Company X' or the travel insurance provider, when something goes wrong—and somebody's mad—they'll blame the supplier or provider, but they're going to blame you, too."

"Obviously, claims can come out of mishaps that happen on trips, those at least are understandable," Ment continued. "But it's the ones that come out of the blue that surprise companies—the ones they really didn't think had a problem until there was a problem."

If you begin to feel that something is going in the wrong direction in a relationship with a customer, Ment stressed the importance of being attuned to that change and acting accordingly, including being cautious in your communications and assuming everything is being recorded.

"If you're a tour company that records telephone calls as part of your normal business operations, you might have to turn those recordings over in a court case," he said. "Sometimes it's good to have one person designated as the point-of-contact problem-solving person—someone who perhaps has a heightened awareness of the issue."

Ment also advises against responding to said client while upset or in the heat of the moment, and to avoid communication through apps like Snapchat, WhatsApp or text (written via email is best).

So, what's the first thing you should do if a client threatens or actually brings on litigation?

"Contact your E&O carrier immediately, without a doubt, and call your lawyer," Ment said. "Make a claim when you believe someone is asserting a claim against you. Don't wait. The insurance company can offer you guidance and help handle the problem."

Next, Ment says to gather all the materials and communication you can related to that client's trip and organize it; this step makes it simple for your legal advisors to gain context of the situation and best assist you.

Of course, mistakes happen and we're all human.

"If you think something happened and it was your fault, get out in front of it and try to make it right. Some of the best companies avoid litigation because they fix the problem before it becomes a problem," Ment said, suggesting working with any suppliers if the issue falls with them. "If you feel that it's a supplier that's created the problem, get them involved, tell them to contact their insurance company, and let them participate in the conversation."

And while you can't prevent every misstep or mishap, there are actions you can take to protect yourself.

"Avoiding problems often starts with picking good suppliers and vendors," Ment said, noting that a good vendor isn't always the cheapest, and that group travel professionals should require vendors and suppliers to share proof of insurance as part of that vendor selection process.

Documenting who's responsible for what in a contract is also vital.

"It's obviously important to have indemnification provisions in contracts with your suppliers, because if something goes wrong, rather than hoping they step in, they'll be legally obligated to," Ment explained. "Building your electronic file for each supplier—with a contract with indemnity, with insurance—is really what I believe is the best practice of a group tour planner. You're just getting ready if there's a problem later on."

Written by Sarah Suydam, Managing Editor for Groups Today.

This article originally appeared in the May/Jun '24 issue of Groups Today.