In a landmark case heard this week, the Supreme Court determined whether the respondent is liable to the appellant for breach of contract and/or under Reg 15 of the Package Travel, Package Holidays and Package Tours Regulations (SI 1992/3288) (“PTR”). ABTA attended as intervener.
Snapshot of decisions so far…
X was sexually assaulted while on a package holiday in Sri Lanka and claimed damages for the assault against Kuoni as being liable for the actions of the assailant who was also an employee at the hotel.
At first instance the High Court found there to be no “improper performance” of the package and took the view that the sexual assault on X was an unforeseeable event that could not have been prevented by the Hotel. The assault was unforeseeable and could not have been anticipated.
The Court of Appeal came to a majority decision and concluded that the holiday arrangements in the package did not extent to the employee’s conduct as this fell outside of the function for which he was employed by the hotel. As such he was not a supplier of services within the meaning of the PTR. The supplier of services under the contract was the hotel and not the employee.
The dissenting view of Lord Justice Longmore was that “The whole point of the [Package Travel] Directive and the regulation is that the holidaymaker should have a remedy against his contractual opposite and it should be left to the tour operator to sort out the consequences with those whom it has itself contracted.”
Implications for the travel industry
If the appeal is granted, then the implications for the travel industry are significant as tour operators will be liable for the acts of the hotel, as well as their employees and third parties (in whatever capacity), without question, leaving little room for challenge.
This raises important questions as to the ability to rely upon the defences permitted within Regulation 15(2)(c) of the 1992 Regulations as they become potentially ineffective.
There are clear concerns that this could provide a forum for wider claims to be brought, if third parties fall within the definition of “supplier” of the package, which the Tour Operator has no real control over and cannot feasibly foresee.
Interestingly, there was much discussions over the legislative history leading up to the EC Directive and the 1992 Regulations as to the meaning “supplier”. Depending on the outcome there could be a preliminary reference to the ECJ.
No doubt all interested parties will be eagerly anticipating the decision.
Click here to access comprehensive notes from this week’s Supreme Court hearing.
Authored by BLM partner Sarah Murray-Smith and associate Deborah Sayers