Instead customers are being offered full refunds and 25 per cent of what they spent on their cancelled cruise off future trips. The total cost to the company is expected to be about £22 million.

Ian Skuse, a partner specialising in travel law at solicitors Piper Smith Watton says cruises are now generally accepted to fall under the Package Travel, Package Holidays and Package Tours Regulations 1992 and as a result passengers can expect compensation if their dream holiday trip is spoiled or doesn’t live up to expectations.

The relevant legislation is contained in sections 14 and 15 of the Regulations. Section 14 covers the classic spoiled holiday scenario. Skuse says: “Passengers might say to themselves: ‘I was particularly looking forward to seeing Madeira and I didn’t get the holiday at booked so P&O should compensate me.’” Such a claim might seek a refund for the “diminution of value” of the cruise, as lawyers call it, plus damages for distress and inconvenience.

Passengers might also bring a claim under section 15 of the regulations if the cruise still goes ahead but there are significant changes to the content of the cruise, for example, if several destinations are skipped. If this happens, P&O can be required to make a full refund and offer compensation.

The level of compensation in this case is often set out in the terms and conditions of the holiday brochure. Ian Skuse says many holiday companies attempt to limit compensation to twice the cost of the holiday through their terms and conditions.

P&O’s terms and conditions promise a substitute cruise or a full refund in the event of cancellation plus compensation of £40 plus a credit of 25 per cent of the fare paid, which must be used by December 31.

Compensation has been paid to Aurora passengers before. When the ship set off on its maiden voyage in May 2000, it limped back to Southampton after just 18 hours with a technical problem with its propeller. The cruise was cancelled and passengers offered a full refund plus a free cruise at a later date up to the same value.

Ian Skuse adds: “One of the big problems facing P&O is that they can’t prolong the cruise because there is a cruise that is scheduled to depart immediately following the return of thee Aurora from the current voyage. P&O will want to avoid having to compensate passengers on the next cruise. They will be trying to come up with an offer that will put a lid on the whole thing.”

The worst case scenario for P&O, says Skuse, is if groups of passengers get together and appoint one of the growing number of solicitors specialising in class actions. “There are several specialising in travel and even one that works on a no-win, no-fee basis,” says Skuse. “It’s the sort of thing that can become a lawyer’s feast.”

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