X v Kuoni: Success for X in the Supreme Court

On 30 July 2021, the Supreme Court unanimously allowed X’s appeal in the long-running case of X v Kuoni. This is a key decision in respect of the scope of the liability of package tour operators. Carin Hunt provides a casenote on the judgment.

The facts

The facts giving rise to this case occurred over a decade ago now, when Mrs X and her husband were on a package holiday in Sri Lanka. Early on the morning of 17 July 2010, a hotel maintenance employee on night duty offered to show Mrs X a shortcut to reception. The employee then took Mrs X to an engineering room where he assaulted and raped her.

The issues

Having been dismissed both at first instance and by the Court of Appeal, Mrs X’s claim against Kuoni, the tour operator, eventually reached the Supreme Court.

The issue in dispute was whether the actions of the maintenance employee could be construed as improper performance of the holiday contract, which was regulated by the Package Travel, Package Holidays and Package Tours Regulations 1992 (‘the 1992 Regulations’). Kuoni argued that it could not. Kuoni also relied in the alternative on section 15(2)(c)(i) of the 1992 Regulations which provides 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.’ (‘the unforeseeability defence’)

Reference to the CJEU

In 2019, the Supreme Court referred two questions to the CJEU in respect of the scope of the unforeseeability defence as it appears in Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (‘the Directive’) to which the 1992 Regulations give effect.

For the purposes of the reference, the CJEU was asked to assume that the maintenance employee’s guidance of Mrs X to reception was a service which Kuoni had contracted to provide and that the rape and assault constituted improper performance of the contract (which gave us an indication of the way the Supreme Court would be approaching this issue).

As I wrote about here,  the CJEU confirmed, in robust terms, that the unforeseeability defence does not arise in respect of the deliberate acts of hotel employees.

The CJEU found that the liability provisions of the Directive should not be interpreted restrictively given that the objective of the Directive is to ensure a high level of consumer protection.

Having established that an employee of a supplier of services is not himself a supplier, the CJEU was clear that an employee’s acts and omissions giving rise to performance or non-performance of a supplier’s obligations under the holiday contract are acts and omissions for which the supplier is liable and do not constitute events which a supplier can properly be described as being unable to foresee or forestall.

It should be noted that the unforeseeability defence as set out in the 1992 Regulations is largely replicated in the Package Travel and Linked Travel Arrangements Regulations 2018 (‘the 2018 Regulations’), which applies to package holidays booked on or after 1 July 2018. The CJEU’s interpretation of the defence in the 1992 Regulations is likely to be persuasive in interpreting the defence in the 2018 Regulations, and certainly suggests it will have to be interpreted narrowly.

The Supreme Court’s Judgment

Following the CJEU’s ruling, the key issue for the Supreme Court’s determination was whether the employee who purported to show Mrs X a shortcut to reception was providing services under the holiday contract, such that the assault and rape constituted improper performance of those services for which Kuoni would be liable.

In its judgment, the Supreme Court takes a “broad view” of the obligations owed by a package holiday provider (paragraph 47) and considers that there are a range of “ancillary services” necessary for the provision of a holiday of a reasonable standard which would include staff guiding guests to different areas of the hotel (paragraphs 30-32).

The Supreme Court rejected Kuoni’s proposition (which had found favour with the majority of the Court of Appeal) that guiding hotel guests was not a function for which the employee who assaulted Mrs X was employed (given that he worked in maintenance), noting that all hotel employees were instructed that:

 “each one of you should take on the responsibility of being a Salesman of our Hotel. Learn all details of the various facilities available at the Hotel so that you may guide the Guests.” (paragraph 33)

Similarly, the Supreme Court found that Kuoni’s submission that the assault and rape could not be considered a service within the package holiday contract, being a criminal enterprise, was misfocused, as the relevant service was the guiding a guest to reception. This was because the employee “was able to assault Mrs X only as a result of purporting to act as her guide” and further, “the assault was a failure to provide that guiding service with due care” (paragraph 34).

As such, the assault and rape that the hotel employee committed against Mrs X when purporting to guide her to reception was a failure to provide such an ancillary service of the holiday contract with proper care and Kuoni were liable for the same. Kuoni could not rely on the unforeseeability defence, as the CJEU had made clear that it would not cover the acts or omissions of hotel staff carrying out obligations under the holiday contract.

Significance

This judgment is significant in setting a wide scope of duty for package holiday providers under the 1992 Regulations, and the rationale for this likely to be applicable in respect of 2018 Regulations as well.

There are, however, some areas where Defendants may look to distinguish the facts of this case from those that follow it. For example, the Supreme Court seems to rely on the four-star rating of the hotel when determining the kind of “ancillary services” included in the holiday contract, such that hotels with lower ratings or less promising descriptions could be seen to offer more limited ancillary services. There was also a key factual finding in respect of the particular instructions given to hotel staff in relation to assisting guests, which may not arise in every case.

Find out more

Carin Hunt practices in the areas of clinical negligence, personal injury, international injury and public law. To instruct Carin or find out more about her practice, contact Paul Barton or Mark Gardner on +44 (0)20 7353 6381 for a confidential discussion.

Legal Blogs 3 Aug, 2021