X v Kuoni – CJEU judgment adopts Advocate’s view of the nature of tour operator liability

The CJEU has this morning handed down judgment in the long running tour operator claim X v Kuoni case (full judgment here) and, as expected, has followed the opinion of AG Szpuner, delivered on 10 November 2020, which was discussed in our earlier blog post here. The case turns on interpreting the nature of the tour operator’s liability to the consumer under the relevant Directive for the performance of the holiday contract by its suppliers (such as hotels).  

CJEU ruling

On reference from the UK Supreme Court, the CJEU has ruled that an employee of the supplier cannot be regarded as a supplier of services under the holiday contract. However where such an employee fails or improperly performs obligations arising from the contract, the travel organiser may be liable to the consumer (ie Kuoni may be liable to X, but whether or not it is will be a fact-specific issue). 

The CJEU further found that the organiser cannot rely on the defence in the Directive that the failure or improper performance of the contract was 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.  ‘Event’ must be interpreted as a fact or incident which does not fall within the ‘sphere of control’ of the organiser or supplier of services. The CJEU found that acts or omissions of an employee (the underlying claim relates to X being sexually assaulted by an employee) of the supplier of services in the performance of the contractual obligations and ancillary services do fall within that sphere of control and therefore the defence does not apply.

It appears Kuoni applied for the oral part of the CJEU’s procedure to be reopened following delivery of the Advocate General’s opinion, in relation to the interpretation of the word ‘event’.  No doubt this was due to AG Szpuner determining that the assault did not constitute an ‘event’ for the purposes of the defence available in the Directive (and the UK regulations), meaning that the defence was not available to Kuoni.  However the CJEU concluded that all relevant factors had been considered and the parties had had ample opportunity to submit observations, including their views on the interpretation of ‘event’, therefore there was no need to reopen the oral part of the procedure.

Next steps

The case will be referred back to the Supreme Court and they will consider the Judgment of the CJEU and apply it to the particular facts of this claim. The Supreme Court will need to determine whether, on the facts, the employee was performing ‘an obligation arising from the package travel contract’ or an ‘ancillary service’ to the contract. 

Although the Supreme Court could  determine that the employee was no longer performing his obligations (or any ancillary services) under the package travel contract at the point he lured X into the engineering room and assaulted her, we suggest it  appears likely they would find he was performing a contractual obligation or ancillary service – from X’s perspective at least,  albeit that he used his role to carry out a dreadful assault – and if so the claim against Kuoni would succeed.

Another possible permutation is that the parties to the case are able to move forward from the CJEU’s decision today and reach a settlement without the need for another hearing. While we can see that such an outcome would hopefully bring some much needed and long awaited closure for X, predicting the ultimate conclusion of this claim is difficult and it is entirely possible that today’s decision is not the last judicial word on it.

Sandeep Aujla, Solicitor, BLM

BXB: “the latest episode in the attempts of religious organisations to escape vicarious liability in claims for damages for sexual offences”

This striking description of a defendant’s unsuccessful appeal – it was roundly dismissed by all three members of the court – comes at the end of the recent judgment in The Barry Congregation Of Jehovah’s Witnesses v BXB. The decision probably does not develop the law on vicarious liability as such (as will be seen below from what Nicola Davies LJ said) but mark its application on appeal in a matter involving sexual abuse of an adult. Relevant passages from each of the three judicial opinions are set out below.

Contained within the tailored test [of whether the relationship between the wrongdoer and the defendant company/body is sufficient to justify the imposition of vicarious liability on the latter for the acts of the former] in cases of sexual abuse is the concept of the conferral of authority upon the tortfeasor by the defendant. In my judgment, the tailored version of the test applies in cases in which adults are alleged to have been sexually abused as it does in such cases involving children because the rationale for the test is the same. The issue is the connection between the abuse and the relationship between the tortfeasor and the defendant. It is not the particular characteristics of the victim. [Nicola Davies LJ at 87.]

In principle, however, the test must be equally applicable to cases involving the sexual abuse of adult victims, although its application will need to take account of the differences between children and adults. In such a case [ie involving adults] the relationship is less likely to be a relationship in which the tortfeasor exercises power over the victim and the victim is dependent on or subservient to the tortfeasor. Whether such a relationship exists, however, will be a question of fact in each case. [Males LJ at 96.]

This appeal is the latest episode in the attempts of religious organisations to escape vicarious liability in claims for damages for sexual offences committed by those whom they have placed in positions of responsibility and moral authority … even an adult may be susceptible to relationships which involve a risk of abuse, particularly in the context of those spiritual beliefs and doctrines which promote a culture of unquestioned obedience to religious leaders. [Bean LJ at 105.]

Alistair Kinley, Director of Policy & Government Affairs

NI discount rate: new Bill passes second stage but further progress unclear for now

Although the Damages (Return on Investment) Bill passed its second stage in the Assembly at just after half past three this afternoon, the scheduling of its Committee stage remains unclear and contested. We have already written about the evident tension between the Justice Minister and the Committee that was all too clear in pre-legislative hearings and was again present in today’s debate.

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