Recent developments in the case of X v Kuoni case indicate the tide maybe turning in favour of the Claimant.
As outlined in a previous blog, found here, readers will recall the Supreme Court referred aspects of this case to the Court of Justice of the European Union (CJEU) in July last year.
Whilst the CJEU is yet to provide its judgment in respect of the reference, Advocate General Szpunar has published his opinion (full opinion here), and whilst not binding, it gives an indication of what the CJEU is likely to determine.
Advocate General’s Opinion
In considering the reference by the Supreme Court, the Advocate General dealt first with the concept of ‘supplier of services’. He determined that an employee of a supplier of services is not themselves a supplier of services, as the concept is only used in reference to the liability of an organiser for the failure to perform or improper performance of the package travel contract. He arrived at this view because whilst legislation allows an organiser to pursue remedies against a supplier of services, there is no similar provision for the organiser to pursue employees of the suppliers of services. This appears to support the position adopted by Kuoni.
However the Advocate General went on to consider the circumstances in which the acts or omissions of an employee could be attributed to the employer/supplier of services, which in his view include the acts or omissions committed by an employee in the performance of the contractual obligations specified in the contract and those obligations which are regarded as being ancillary.
By way of example, the accommodation, which is one of the components of the package contract, is provided by a hotel (the supplier of services) and the services performed by employees of the hotel i.e. porter services, room service etc. are ancillary to the contracted accommodation services. The hotel employee may be regarded as performing the contractual obligations arising from the contract where he is on duty and wearing a hotel uniform and thus appears to consumers to be a trustworthy person; in those circumstances if the employee does improperly perform the contract, his actions must be attributed to the supplier of services and therefore the organiser would be liable. The organiser will not be liable where damage is caused by an employee outside working hours, or whilst they are on leave, however in any other circumstance it is difficult to see how an organiser can avoid liability.
The Advocate General then considered whether Kuoni could rely on the defences available under Article 5(2) of the directive (transposed into regulation 15(c)(ii) of the 1992 Regulations). He considered the facts of the case made it clear the force majeure defence was not applicable. As to the second limb defence, that the event could not have been foreseen or forestalled by taking all necessary steps to prevent it; the Advocate General opined that the rape and assault committed by the hotel employee on X was not an ‘event’ within the meaning of the provision. To be considered an event, to which the defence would apply, it would need to be something that fell outside the organisational structure of the supplier, or an objective factor i.e. not related to a component of the package contract or matters ancillary to it.
Therefore the acts or omissions of an employee of a supplier of services, in the performance of the obligations arising from the package travel contract, including wrongful acts committed intentionally, would not constitute an event to which the defence could apply. The Advocate General also opined it would be illogical to examine whether the intentional acts of a supplier of services can be foreseen or forestalled, including where those acts are committed by its employees.
The Advocate General’s view is that whilst it is not possible to regard an employee as being the supplier of the services, the actions of that employee must be attributed to his employer/supplier of services and in turn to the organiser, provided that they occur in the performance of the obligations arising from the package travel contract. In this regard any act or omission of the employee which results in improper performance of the contract must be treated as a fault on the part of the supplier. In applying his view to the present case, Kuoni could not avoid liability for the rape and assault committed by the hotel employee.
Whilst this opinion is not binding it will undoubtedly be unwelcome news for Package Tour Operators as it indicates an intention of the CJEU to maintain the primary objective of the directive and regulations, which is to ensure a high level of protection for consumers.
The full judgment of the CJEU is awaited, however it is anticipated (although not guaranteed) they will follow the Advocate General’s Opinion.
Package Travel and Linked Travel Arrangement Regulations 2018
The regulations which applied in X v Kuoni were of course the 1992 regulations. These continue to apply to any package holiday contract entered into up to and including 30 June 2018, meaning they remain relevant to a number of cases still in the system. However for any contracts entered into on or after 1 July 2018 the Package Travel and Linked Travel Arrangements Regulations 2018 will apply.
So the question arises whether the arguments raised in this case are relevant under the new regulations? The answer is probably no, because the defence available to the organiser has been reworded.
The ‘old’ defence, examined in this case, was that the failure in contractual performance had to be due to “an event which the other party to the contract or the supplier of services, even with all due care, could not foresee or forestall.” That has been replaced in the 2018 regulations, which now stipulate that the defence is made out only where the lack of contractual conformity is “attributable to a third party unconnected with the provision of the travel services included in the package travel contract and is unforeseeable or unavoidable”.
In our view, the new wording makes the extent of, and limits to, the organiser’s liability a lot clearer. It appears more or less self-evident that acts or omissions – even assaults – of a hotel employee in uniform on the premises during working hours can hardly be said to be “unconnected with the provision of the travel services”. On this basis, it is difficult to see that future claims in circumstances similar to X v Kuoni would require the long and involved judicial scrutiny brought to bear on this very unfortunate case.