The Finnish Consumer Ombudsman drew the attention of the organisers of the Finlandia Ski Marathon to the contractual term on the cancellation of the event, according to which participants who paid the participation fee with their own money would not receive any compensation for the cancelled ski event. The Consumer Ombudsman considered the event to be a business activity, meaning that the same consumer law principles apply to Finlandia Ski Marathon as to other events.
In February 2020, the Finlandia Ski Marathon was cancelled due to lack of snow. The cancellation of the ski event concerned thousands of participants who had registered for it. The Consumer Ombudsman drew the attention of the responsible organisers of the event to the contractual terms concerning the cancellation of the event.
According to the terms and conditions of the event, the responsible organisers, Hollolan Urheilijat -46 and Lahden hiihtoseura, held the right to the participation fees in their entirety should the event be cancelled due to lack of snow or any other force majeure. In compensation, the participants could have received a 50% discount on the next year’s participation fee only. If the registered people will be unable to participate in the event the next year, they would lose the discount offered. In other words, consumers alone bore the financial risk of the event being cancelled, possibly without access to any compensation.
The Consumer Ombudsman considered the contractual term unfair as such. The term was severe and surprising as it deviated from the key principles of contract law and consumer protection, according to which the consumer is entitled to financial compensation when an event is cancelled. The Consumer Ombudsman required that, in the future, the organisers of Finlandia Ski Marathon take into account the requirements of the Consumer Protection Act when organising the event and amend the contractual terms of the event in accordance with the Consumer Protection Act.
The principles of consumer protection apply to sports events subject to a fee arranged by associations
Mass events subject to a fee arranged by sports clubs and associations that are open to everyone are considered business activities with an intent to make profit. Such events are not part of the normal activities sports clubs or associations arrange for their members. Therefore, the same consumer law principles apply to events subject to a fee that are open to everyone as to any other events.
The Consumer Ombudsman considered that Finlandia Ski Marathon had a clear intent to make profit because participation in a sports service was sold against a participation fee. Even though the purpose of the event was not to make actual business profit, it was still organised with an intent to make financial profit. According to the case law, an activity is considered to have been arranged with an intent to make financial profit when the income received is used for covering operating expenses and any profits made are used for funding the association’s other activities.
The established nature of the event, the large number of participants and commercial partnerships were found as factors speaking in favour of the professional nature of the activities.
The Consumer Ombudsman did not express an opinion on what would be a reasonable compensation for an event cancelled due to lack of snow, as the issue is also pending a decision by the Consumer Disputes Board. The Consumer Ombudsman required that the organisers comply with the recommendations of the Consumer Disputes Board.
According to their account, the organisers of Finlandia Ski Marathon were prepared to amend the contractual terms and pay the participants a 50-per cent refund. As such, the Consumer Ombudsman considered the proposal on paying some compensation more appropriate than no compensation at all in situations where a ski event must be cancelled due to lack of snow if this is specifically referred to in the contractual terms. Certain features of the event, such its organisation only once a year with the help of volunteers and its specific dependence on the weather conditions on the event days, may in certain situations favour risk-sharing between the trader and the consumer.
The Consumer Ombudsman reminded the responsible organisers of the fact that they cannot limit the consumer’s right to compensation by making a general reference to all kinds of force majeure reasons. If deviation from paying compensation on specific grounds were possible, such a deviation would need to be clearly defined in the contractual terms, specifying, for example, lack of snow as one. When registering for the event, the deviation in the contractual terms should be highlighted in such a manner that it would not escape the participants’ attention.
Several public events organised by associations have been cancelled due to the coronavirus pandemic. The Consumer Ombudsman considers that associations cannot restrict consumers’ right to refunds if the public event has been cancelled due to the coronavirus. In such cases, consumers must receive the sum they have paid reimbursed in full.
Last spring, the Consumer Ombudsman provided clubs and associations organising mass sports events with guidelines on the requirements of the Consumer Protection Act in situation where an event is cancelled due to the coronavirus.
This article is part of the Consumer Ombudsman’s Newsletter 1/2021. The article was originally published in Finnish in the Consumer Ombudsman’s Newsletter 5–6/2020