Package holiday provider liable for acts of hotel employee

United Kingdom

Recent clarification from the Court of Justice of the European Union has brought closure to the UK Supreme Court decision in X v Kuoni Travel Limited.

The UKSC found that the provider of a package holiday was liable to a guest who was assaulted and raped by a hotel employee. The decision follows clarification from the CJEU on the application of the Package Travel Directive (European Council Directive 90/314/EEC) to claims against package holiday operators for the actions of staff employed by their suppliers.

Background

In 2010, X arranged a package holiday to a resort in Sri Lanka through tour operator, Kuoni. During her holiday, X was walking through the hotel grounds in the early hours when a uniformed hotel maintenance employee suggested an alternative “short cut” route to the reception area. The hotel employee subsequently assaulted and raped X. X claimed against Kuoni for breach of contact alleging that Kuoni failed to comply with their obligations under the package holiday contract and that X’s suffering from the actions of a rogue hotel employee was improper performance of Kuoni’s contractual obligations. The Court of Appeal had found in favour of Kuoni. The matter was appealed to the UK Supreme Court, on the issues:

  1. Did the actions of the hotel employee against X constitute improper performance of the Kuoni’s obligations under the package travel contract?

  2. Did Kuoni have any liability in respect of the conduct of the hotel employee or any valid defence under article 5(2) of the Directive?

In July 2019, the UKSC referred the case to the CJEU for clarification on the following assumptions:

  • that the actions of the hotel employee, namely providing X with directions to reception, would be a service within the term “holiday arrangements” to which Kuoni was contracted to perform; and

  • the subsequent rape and assault by the hotel employee constituted improper performance.

CJEU response and UKSC judgment

In March 2021, the CJEU provided their response to the UKSC in the affirmative and the UKSC’s judgment has now been handed down.

The UKSC has held that a hotel employee providing assistance to a guest was clearly a service under the contractual term “holiday arrangements”. Kuoni had argued that in this instance the hotel employee was acting in a lone criminal enterprise. However, the UKSC ruled that the provision of a service of providing assistance to guests provided the employee with the opportunity to commit the rape and assault and was thus a deemed failure to provide the service with due care and was a breach of the package travel arrangements between X and Kuoni.

The UKSC ruled that Kuoni could not seek exemption from liability for improper performance under the provisions of Article 5(2) of the Directive nor 15(2)(c)(ii) of the Package Travel, Package Holidays and Package Tours Regulations 1992 (which implemented the Directive in the UK) as the acts were caused by an employee of the hotel who were suppliers of services performing the contractual obligations owed by Kuoni to X. It followed that Kuoni was liable under terms of Regulation 15 of the 1992 Regulations. In determining the breach of contract, the UKSC held that Kuoni was liable for the failures by the hotel employee to undertake services with appropriate care and skill as they were deemed a supplier of the contracted services.

Comment

This judgment has raised a hurdle for defendants to defend claims against them based on the foreseeability of unknown acts or force majeure under Article 5(2)(iii) of the European Council Directive and Section 15 of the Package Travel, Package Holidays and Package Tours Regulations 1992. 

The UKSC’s ruling emphasises the wide scope and extent of actions that can be pursued by claimants under the Package Tour Regulations. Companies and insurers should be mindful that claims utilising the Directive have simpler rules for finding of liability when a non-performance or improper performance has occurred.

Further reading: X v Kuoni Travel Limited [2021] UKSC 34