On 6 May 2020, another law linked to the COVID-19 pandemic has entered into force: the KuKuSpoSiG, an abbreviation that translates as Federal Act to guard art, culture, and sports against further impacts of the COVID-19 pandemic. It provides regulations regarding entrance and participation fees for art-, cultural-, and sports events which were or will be cancelled between 14 March 2020 and the end of 2020 due to the COVID-19 pandemic.

Specifically, instead of returning the entrance or participation fees, organisers may temporarily issue vouchers, which may be redeemed for other events set up by the same organiser. The same applies to the obligation of operators of art- or culture facilities to return ticket fees when they are closed due to the COVID-19 pandemic in 2020. The obligation holds regardless of whether the ticket was obtained directly from the organiser or operator or through an agent. This measure is designed to guard organisers/ operators against insolvency when they are asked to suddenly make large-scale paybacks because the event was cancelled, or the facility was closed as a result of the COVID-19 pandemic.

According to the preparatory details of the Act, an art or cultural event includes concerts, opera- and theatre performances, movie screenings and other acts. Sports events encompass athletic gigs and performances attended by a paying audience. The inclusion of art- and culture facilities in the scope of the law means that the Act also extends to museums and cultural monuments.

Where the organiser/operator is a territorial authority or a legal entity which is at least majority-owned by a territorial authority or covered by a territorial authority's liability, the provisions of the KuKuSpoSiG do not apply. In such a case, the buyer is still entitled to claim (full) repayment of the fee.

Permissible amount of voucher

As a rule, vouchers may be issued only to a maximum amount of EUR 70 per event. If the ticket costs more, the buyer is entitled to a (cash) refund for the excess amount. Thus, if a ticket costs EUR 90, the organiser can issue a voucher for EUR 70 and must return the remaining EUR 20 at once.

The limit pertains to a single event. Accordingly, if a visitor booked three art-, culture- or sports events on the same contract, the organiser may issue a voucher of up to EUR 70 for each of the three events.

For tickets described as "luxury segment" in the preparatory details, where the payback may be over EUR 250 for a single event, the law considers it reasonable that buyers must accept a higher amount as a voucher: the organiser only needs to refund EUR 180, with the remainder covered by a voucher.

Payout of voucher

The voucher's holder is not obliged to redeem the voucher, however, he is not entitled to request a refund for the value of the voucher before 1 January 2023. The organiser/operator must not charge any costs for issuing, mailing, or redeeming the voucher. Vouchers may be assigned to other natural persons.

Deviating arrangements derogatory to consumers

If the visitor, participant, or holder of a voucher is a consumer, derogatory arrangements are null and void. Interestingly enough, the KuKuSpoSiG provides that "voluntary acceptance" of vouchers of a larger scope than provided by law shall be "not excluded". The preparatory details specify that an organiser/operator may initially issue to the consumer a voucher for the entire amount (i.e. beyond the legally permissible amount) which the consumer may refuse; next, the consumer must accept a voucher only for the legally stipulated amount, with the remainder to be paid back to the consumer. This suggestion is problematic in its nature, not least because it entices organisers to ignore the statutory refunding rules and attempt to get around them.

Indeed, some event organisers have already taken up the suggestion and are issuing vouchers of a higher value than the price of the original ticket in order to induce their customers to accept a voucher for the amount which should actually be paid back. Thus, organisers of cancelled events of a ticket price of EUR 90 are issuing vouchers of much higher value, using the overpay to get customers to waive the (obligatory) payback of EUR 20.

Without any doubt, this will in actual practice raise the willingness to "voluntarily" accept the obligatory refund (in our case EUR 20) by way of a voucher. After all, Section 3 (2) of the KuKuSpoSiG expressly does not exclude this "voluntary acceptance". This "voluntariness rule" is, however, highly problematic under consumer laws and does not change the fact that consumers might still insist on a refund. Moreover, it should be considered that the higher voucher values will further increase the debt burden of the business.

Obviously, consumer protection associations are not happy with this solution because it forces consumers to grant a loan to event organisers/operators while they have no security in the case that the issuer (in spite of the statutory provision) becomes insolvent. It remains to be seen whether the Act will save many organisers/ operators or will simply delay their bankruptcy.

Originally published June, 2020.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.