It is well known that tour operators carry responsibility for default by their service providers under the EU Package Travel Directives. The full extent of that liability is a matter of debate, as is apparent from the differing judgments in the Kuoni litigation following a sexual assault on a holidaymaker by a hotel staff member. The UK Supreme Court has now decided in favour of the holidaymaker after a reference to the European Court of Justice. Tour operators should consider their contractual recourse against service providers for exceptional events of this nature.
In January 2019 we reported [1] on the decision [2] of the English Court of Appeal in this difficult claim under the Package Travel Directive. A holidaymaker was raped by a hotel maintenance employee when she asked for directions in the hotel. She brought a claim against the tour operator under the Package Travel Regulations 1992[3], which implemented the EU’s first Package Travel Directive[4].
The first instance judge and, by a majority, the Court of Appeal found that Kuoni was not liable. Largely this was because the “holiday arrangements” which the tour operator contracted to deliver did not include a maintenance employee offering the holidaymaker guidance to the hotel reception. Those courts also considered that the express exclusion of liability within the 1992 Regulations was applicable in circumstances where, it was accepted throughout, neither the hotel nor the tour operator were at fault, in that the assault could not have been prevented even with the exercise of all due care.
After the Court of Appeal decision, the Supreme Court made a preliminary reference[5] to the European Court of Justice (CJEU) on questions of construction of the Package Travel Directive: whether the statutory defence is available when a failure to perform the tour operator’s obligations is attributable to the conduct of a service provider’s employee, and whether that employee is himself considered to be a “supplier of services”.
In determining whether there had been a breach of contract the Supreme Court was clearly influenced by the subject matter of the contract. “A holiday is intended to be a pleasant and enjoyable experience.” This required a broad interpretation: providing a holiday of the required standard involves much more than just accommodation, transport and meals. Guiding a guest around the hotel was part of that service. On that basis the Supreme Court disagreed with the Court of Appeal that the fact that the conduct that was not part ‘of the role in which [the staff member] was employed’ took it outside the scope of the holiday arrangements for which the traveller had contracted.
There was also extensive argument about whether the employee in question was himself a ‘supplier of services’. The original Package Travel Directive and the 1992 Regulations contain an exemption from liability in the case of an unforeseeable event which could not have been avoided by the supplier of services even when exercising all due care. If the employee was himself a supplier, that defence simply could not apply.
However, while the CJEU and the Supreme Court concluded that the employee could not himself be a supplier of services, for want of a contractual relationship with the tour operator, both went on to address the liability of the tour operator for the acts of an employee of a supplier of services. Since an employee acts under a contractual obligation, his conduct falls within the sphere of control of the organiser and/or the supplier of services. For that reason the tour operator cannot rely on the exemption to avoid liability to travellers for damage suffered as a result of improper performance of services as a result of acts or omissions of employees of their service providers.
Both the CJEU and the Supreme Court were clearly influenced by the objective of the Directive in securing a high standard of consumer protection and from that perspective the CJEU decision may be seen as ‘result orientated’. Although the underlying litigation arose in England, the CJEU’s decision is applicable across the EU and so organisers throughout the EU should consider its implications. Travel businesses will wish to consider a number of observations in the light of these decisions.
[1] Is a travel company liable for rape? (twobirds.com)
[2] X -v- Kuoni Travel Ltd, [2018] EWCA Civ 938
[3] SI 1992/3288
[4] Council Directive 90/314/EEC of 13 June 1990
[5] Case C-578/19 Kuoni Travel: CJEU judgment, 18 March 2021
[6] Directive (EU) 2015/2302 of the European Parliament and of the Council of 25 November 2015
[7] SI 2018/0634