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X v Kuoni – The Advocate General’s Opinion


Date:



In this post, Carin Hunt details the Advocate General’s opinion in X v Kuoni (Case C-578/19), regarding an assault by a member of hotel staff,  which was handed down on 10 November 2020.

The facts

In July 2010, X and her husband were on a package holiday in Sri Lanka. The package was provided by Kuoni and included hotel accommodation.

In the early hours of the morning of 17 July 2010, X was on her way to reception when a hotel employee offered to show her a shortcut. The employee took X to an engineering room where he assaulted and raped her.

The employee who attacked X was a member of the hotel’s maintenance team. He was on night-duty at the time of the incident and was wearing a maintenance staff uniform.

X’s claim

X brought a claim against Kuoni under the Package Travel, Package Holidays and Package Tours Regulations 1992 (‘the 1992 Regulations’).

Under the 1992 Regulations, the provider of a package holiday (or, ‘the other party to the contract’, in the words of 1992 Regulations) is liable for the proper performance of its obligations under the holiday contract regardless of whether such obligations are performed by a third party supplier, such as a hotel supplying accommodation or an airline supplying transport to and from the holiday destination. Proper performance includes the exercise of reasonable care and skill (see Hone v Going Places [2001] EWCA Civ 947).

X claimed that the hotel employee who attacked her had been undertaking a service under the holiday contract by showing her to reception and the assault constituted a failure to properly perform that service, such that Kuoni were liable to her under the 1992 Regulations.

X also claimed that Kuoni had breached clause 5.10(b) of the holiday contract, which provided that:

‘we will accept responsibility if due to fault on our part, or that of our agents or suppliers, any part of your holiday arrangements booked before your departure from the UK is not as described in the brochure, or not of a reasonable standard, or if you or any member of your party is killed or injured as a result of an activity forming part of those holiday arrangements. We do not accept responsibility if and to the extent that any failure of your holiday arrangements, or death or injury is not caused by any fault of ours, or our agents or suppliers; is caused by you; … or is due to unforeseen circumstances which, even with all due care, we or our agents or suppliers could not have anticipated or avoided.’

Progress of the case

X’s case was dismissed at first instance (X v Kuoni [2016] EWHC 3090 (QB)) and on appeal to the Court of Appeal (X v Kuoni [2018] EWCA Civ 938). Although X had initially pleaded certain failures on the part of the hotel itself, such as a failure to supervise the offending employee and carelessness in selecting him, at trial it was accepted that such failure could not be made out.

The success of the claim therefore rested on the question of whether the actions of the maintenance employee could be construed as improper performance of the holiday contract.

The Court of Appeal, in a joint judgment the Master of the Rolls and Asplin LJ agreed with the first instance decision that it was the hotel, and not its employees, who were suppliers for the purposes of the 1992 Regulations. The 1992 Regulations were not designed to facilitate a claim against a tour operator for wrongful conduct by an employee of a supplier where that conduct was ‘not part of the role in which he was employed’ and where the supplier would not have been vicariously liable under either the consumer’s domestic law or the foreign law applicable to the supplier. There were no policy reasons to suggest otherwise and it was not realistic to suppose that the tour operator could protect itself via an indemnity from the employee or the hotel or by way of insurance.

The Master of the Rolls and Asplin LJ further held that on their proper interpretation, the words ‘holiday arrangements’ in clause 5.10(b) of the holiday contract (above) did not include a member of the hotel’s maintenance team conducting X to the hotel’s reception, agreeing with the first instance judge that:

‘Reasonable people in the position of Kuoni and the appellant would not have understood at the time the contract was made that Kuoni was promising that such an activity would be carried out to a particular standard’. (paragraph 34)  

X was granted permission to appeal to the Supreme Court.

Reference to the ECJ

On 24 July 2019, the Supreme Court referred two issues to the European Court of Justice (‘the ECJ’) in respect of the scope of the defence set out in the second part of the third alinea to article 5(2) to Council Directive 90/314/EEC on Package Travel, Package Holidays and Package Tours (‘Directive 90/314’) to which the 1992 Regulations give effect.

This defence operates such that liability does not arise if the improper performance of the holiday contract flows from failures due to:

‘an event which the organizer and/or retailer or the supplier of services, even with all due care, could not foresee or forestall’.

Regulation 15(2)(c)(i) of the 1992 Regulations gives effect to this defence in English law.

The Supreme Court’s reference was as follows:

  1. Where there has been a failure to perform or an improper performance of the obligations arising under the contract of an organizer or retailer with a consumer to provide a package holiday to which Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours applies, and that failure to perform or improper performance is the result of the actions of an employee of a hotel company which is a provider of services to which that contract relates:
    (a) is there scope for the application of the defence set out in the second part of the third alinea to article 5(2); and, if so,
    (b) by which criteria is the national court to assess whether that defence applies?
  2. Where an organizer or retailer enters into a contract with a consumer to provide a package holiday to which Council Directive 90/314/EEC applies, and where a hotel company provides services to which that contract relates, is an employee of that hotel company himself to be considered a “supplier of services” for the purposes of the defence under article 5(2), third alinea of the Directive?

The defence under article 5(2), third alinea of the Directive, operates such that liability does not arise if the improper performance of the holiday contract is due to failures due to ‘an event which the organizer and/or retailer or the supplier of services, even with all due care, could not foresee or forestall’. Regulation 15(2)(c)(i) of the 1992 Regulations gives effect to this defence in English law.

The ECJ was asked to assume as follows:

‘that guidance by a member of the hotel’s staff of Mrs X to the Page 14 reception was a service within the “holiday arrangements” which Kuoni had contracted to provide and that the rape and assault constituted improper performance of the contract.’

The Advocate General’s opinion

In his opinion, Advocate General Szpunar (‘the AG’), considers the two questions referred to the ECJ together, on the basis that the question of the applicability of the defence under Article 5(2) turns on the scope of the term ‘supplier’ in the Regulations as a whole.

(a) An employee is not a supplier

The AG considers that an employee is not a supplier under the Regulations. He distinguishes an employee from a supplier on the basis that an employee does not provide services for remuneration, as a supplier does, but as part of a subordinate relationship with his or her employer (paragraph 53). Further, as a matter of construction Directive 90/314 does not make any reference to employees of the suppliers of services. He also states, at paragraph 55, that:

I would observe that although the EU legislature intended to enable the organiser to pursue remedies against a supplier of services, there is no similar possibility for the organiser to pursue the employees of the suppliers of services.’

(b) The scope of the Directive

The AG then considers in what circumstances an employee’s acts or omissions can be attributed to the supplier that employs him in light of the system of liability created by Directive 90/314 (to which the 1992 Regulations give effect).

The AG considers that the package holiday provider is liable for the acts and omissions of employees who are performing the contractual obligations specified in the contract but also those who are performing obligations which can be considered as ancillary to those services. A hotel provides the service of accommodation – however, the AG explains that ancillary to that service may be ‘porter services, catering, valet parking, concierge services, table service, room service, bicycle hire and cleaning or maintenance services’.

The AG then goes on to state, at paragraphs 65 and 66, that:

‘In those circumstances, it is clear to me that an employee of a hotel may, in principle, be regarded as performing the contractual obligations arising from a package travel contract where he is on duty, wearing the uniform of a member of hotel staff and thus appears to guests/consumers to be a trustworthy person, whether the obligations are performed in the hotel premises or outside its facilities, provided that the obligations in question arise from the package holiday contract or are obligations regarded as being ancillary to the services sold or offered for sale by the organiser under that contract.

Thus, if the porter services, the maintenance of facilities or the conducting of guests to reception are either services ancillary to the accommodation service or services directly stipulated in the contract, the organiser must be liable where the hotel porter damages or loses luggage, assaults a guest whilst performing the obligation of conducting him to his room or to reception, burns a guest by spilling soup or assaults a guest whilst providing table service.’

Further, at paragraph 68, the AG considers that the provider of the holiday will not be liable ‘if the employee of a hotel assaults a hotel guest outside his working hours or on a day on which that employee is on leave’, thus relying on a distinct line between acts done ‘at work’ compared with those committed when an employee is technically off duty.

It does appear that in the reasoning set out above, the AG has gone somewhat beyond the scope of the reference, given that the ECJ was asked to assume that the employee’s conduct in guiding X around the hotel constituted improper performance of the obligations under the contract and not to take a view on whether that assumption was in fact correct.

(c) The scope of the defence

At paragraph 78, the AG turns to the defence set out second part of the third indent of Article 5(2) of Directive 90/314 and finds that it cannot apply where the improper performance of the contract is the result of the acts of an employee of a supplier.

The AG explains, at paragraph 80, that for an act or omission to constitute a relevant event for the purposes of the defence:

there would have to be an event outside the organisational structure of the supplier of services or an objective factor. That concept of an ‘event’ cannot under any circumstances include wrongful acts committed intentionally which, in themselves, constitute the failure to perform or the improper performance of the contractual obligation.’

He states that ‘it would even be illogical to examine whether the intentional acts of a supplier of services can be foreseen or forestalled’, although it is not entirely clear why he considers this to be so.

The AG, placing considerable emphasis on the fact that the purpose of the Directive 90/314 is consumer protection, finds, at paragraph 83, that:

this interpretation is the only one capable of ensuring a high level of protection for consumers and of preventing that level of protection from being significantly reduced in cases of serious misconduct on the part of the employees of suppliers of services’.

However, perhaps again testing the limits of the scope of the Supreme Court’s reference, the AG suggest that if an alternative interpretation were to be accepted:

‘such serious misconduct could then be regarded as being an ‘unforeseeable or unavoidable’ event within the meaning of the second part of the third indent of Article 5(2) of Directive 90/314.’

In light of this conclusion, the AG does not go on to set out what criteria for assessment should be applied by national courts in respect of this defence.

What next?

The ECJ is not bound to adopt the AG’s opinion, although it is influential. A study undertaken in 2016 suggests that the ECJ is approximately 67 percent more likely to annul an act (or part of it) if the Advocate General advises the Court to annul than if it advises the Court to dismiss the case or declare it inadmissible.[1]

Once the ECJ has made its decision, the matter will be referred back to the Supreme Court.

[1] Arrebola, Mauricio and Portilla, An Econometric Analysis of the Influence of the Advocate General on the Court of Justice of the European Union, Cambridge Journal of Comparative and International Law, Vol. 5, No. 1. The article is available here. I am grateful to Asela Wijeyaratne, who spoke about X v Kuoni at the APIL Accidents Abroad conference on 3 December 2020 and cited this study.

About the Author

Carin is keenly developing a cross-border element to her personal injury practice, and has drafted pleadings and appeared in court in respect of package travel claims, Odenbreit claims, and claims involving consumer contracts which the Brussels Recast Regulations apply.

She also receives instructions in flight delay, Montreal Convention, and Athens Convention claims. Carin’s clinical negligence practice compliments her international injury work and she has recently advised in two cases involving medical treatment abroad.

Find Out More

If you would like to discuss any of the issues covered in this article please contact Carin Hunt directly or via her practice management team; Paul Barton or Mark Gardner on +44 (0)20 7353 6381 who would be happy to have a discussion in the strictest of confidence.


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