Following the CJEU’s judgment in the long-running case of X v Kuoni in March 2021, discussed in our previous blog post here, on Friday 30 July the Supreme Court handed down (what appears to be) its final word in this claim which stems from a sexual assault during a package holiday in Sri Lanka in 2010.
Unanimous decision for the claimant
The Supreme Court determined that in guiding (or purporting to guide) the claimant from one area of the hotel to another the employee, who then assaulted her, was performing an obligation or ancillary service arising from the holiday contract The assault constituted improper performance of the claimant’s package contract with the tour operator and amounted to a failure to provide a service with proper care. The judgment states that “It is an integral part of the services to be provided on a holiday of such a standard that hotel staff provide guests with assistance with ordinary matters affecting them at the hotel as part of their holiday experience. In my view, guidance by a member of the hotel’s staff of Mrs X from one part of the hotel to another was clearly a service within the ‘holiday arrangements’ which Kuoni had contracted to provide.”
In respect of the possible defence available to the operator, the Supreme Court followed the CJEU and confirmed that the tour operator cannot rely on the defence at article 5(2) of the 1990 Package Travel Directive, implemented in the UK by regulation 15(2)(c)(ii) of the 1992 Regulations, as the ‘service’ was provided by an employee of the supplier of services to the contract and, therefore, within the sphere of control of the supplier.
The appeal by X has therefore succeeded and the operator is liable for its breach of contract and under the 1992 Regulations. This judgment should finally bring some, no doubt much needed, closure for X.
What does it mean for tour operators?
Due to the unusually long-running nature of this claim, the 1992 Regulations applied although they have since been replaced by updated Regulations made in 2018 and implementing the EU Package Travel Directive of 2015. For those few claims which still fall within the 1992 Regulations – i.e. in which the booking was made before July 2018 – the judgment will limit the defences available to tour operators in assault claims or claims where an employee of a supplier has caused injury or damage to a customer.
Although each case will be fact specific, the CJEU, as confirmed by the Supreme Court, has stated that the defence at article 5(2) of the Directive and regulation 15(2)(c)(ii) of the1992 Regulations is not available to the tour operator where the acts or omissions of an employee fall within the sphere of control of a supplier of services. Therefore, the defence that the tour operator “could not foresee or forestall” the harmful “event” does not apply; this appears to be the case even if the act or omission of the employee of the supplier amounted to a criminal enterprise and – being outside the scope of his apparent authority – could not be attributable to his employer.
In respect of bookings from 1 July 2018, the 2018 Regulations apply. The defences available to tour operators can now be found at new regulation 16(4). The first two strands of defence remain broadly similar (that the failure to fulfil the contract was attributable to the traveller or to an unconnected third party) but the historic 15(2)(c)(ii) defence above has been replaced by the phrase “due to unavoidable and extraordinary circumstances.” The words “could not foresee or forestall” have been removed and there is no longer reference to an “event”. It appears unlikely that the 2018 regulations would provide a tour operator with a successful defence against a claim arising from for an assault by a supplier’s employee, but each case will be fact-specific and there may be scope to argue the act or omission amounted to “unavoidable and extraordinary circumstances”.
The Supreme Court’s latest decision and the outcome of the reference to the CJEU reference in this show clearly that the scope of tour operators’ duties under the Directive & Regulations will be interpreted broadly. The main focus of the legislation remains consumer protection and defences are to be interpreted narrowly.
It seems clear now that tour operators will very likely be liable to customers for the acts and omissions – deliberate or otherwise – of suppliers’ employees. To mitigate these risks, tour operators should ensure that contractual indemnities are explicit, effective, and agreed in advance by all suppliers.