Liability under the Package Travel, Package Holidays and Package Tours Regulations 1992 for Deliberate Acts: the Decision in X v Kuoni Travel Ltd [2021] UKSC 34

Articles | Wed 18th Aug, 2021

The long-awaited decision in X v Kuoni Travel Ltd [2021] UKSC 34 has now been handed down by the Supreme Court. The court held that the Defendant tour operator was liable for a rape carried out by an employee of a hotelier supplier, notwithstanding that neither the Defendant nor the hotelier was at fault or could have foreseen or forestalled the acts of the employee. The decision has far-reaching consequences for all practitioners in the travel law field, and will make it easier for Claimants to succeed in claims under the Package Travel and Linked Travel Arrangements Regulations 2018 (the successor to the 1992 Regulations).

Written by Sarah Prager, barrister at 1 Chancery Lane.

X (Appellant) v Kuoni Travel Ltd (Respondent) (judgment handed down 30^th July 2021)

What are the practical implications of this case?

Practitioners in this field have been waiting for this decision for some time; the case had travelled from the High Court to the Court of Appeal, where the Claimant lost in both instances, and then to the Supreme Court, which referred two questions of interpretation to the Court of Justice of the European Union, and now, finally, back down to the Supreme Court. During this period, for some years practitioners were left in legal limbo; the decision of the majority of the Court of Appeal had been heavily criticised by commentators, but it had not been overturned. The practical effect of this was that although the decision of the Court of Appeal, which held that the tour operator was not liable for the deliberate acts of suppliers’ employees, seemed favourable to package holiday providers, in practice the case was rarely cited.

It is now clear that claims founded on the acts of employees, rather than suppliers, can be brought under Regulation 15 the Package Travel Regulations (both the 1992 and the 2018 iterations), and that holiday organisers cannot defend them on the basis of the defences to be found at Regulation 16 of the 2018 Regulations (formerly Regulation 15(2)(c) of the 1992 Regulations). The result is that many more deliberate act cases are likely to be brought, and to succeed, under the Regulations.

What was the background?

Mrs X and her husband entered into a package holiday contract with Kuoni for return flights to Sri Lanka and two weeks’ all-inclusive accommodation at a hotel in July 2010. In the early hours of 17^th July 2010, whilst making her way through the grounds of the hotel to the reception, X came upon N, an electrician and hotel employee, who was on duty and wearing the uniform of a member of the hotel staff. After offering to show X a shortcut to reception, N lured her into an engineering room where he raped and assaulted her. Mrs X attempted to bring a claim founded on Regulation 15(1) of the 1992 Regulations, which reads:

“The other party to the contract is liable to the consumer for the proper performance of the obligations under the contract, irrespective of whether such obligations are to be performed by that other party or by other suppliers of services but this shall not affect any remedy or right of action which that other party may have against those other suppliers of services.”

The Defendant defended the claim on the facts and on the basis that the rape did not constitute improper performance of the package contract, but occurred outside the ambit of the facilities and services contracted for; alternatively, on the grounds that the defence contained within Regulation 15(2)(c)(ii) was engaged:

“The other party to the contract is liable to the consumer for any damage caused to him by the failure to perform the contract or the improper performance of the contract unless the failure or the improper performance is due neither to any fault of that other party nor to that of another supplier of services, because…

(c)such failures are due to…

(ii) an event which the other party to the contract or the supplier of services, even with all due care, could not foresee or forestall.”

The claim failed at first instance and in the Court of Appeal, but eventually succeeded on appeal to the Supreme Court (via the Court of Justice of the European Union).

What did the court decide?

The Supreme Court, in an admirably clear and cogent judgment handed down by Lloyd Jones LJ on 30^th July 2021, unanimously allowed Mrs X’s appeal from the decision of the Court of Appeal, finding that:

• The deliberate acts of the hotel employee constituted an improper performance of the tour operator’s obligations under the package contract within the meaning of Regulation 15;
• A ‘broad view’ should be taken of the obligations owed by tour operators, to include obligations in relation to a range of ancillary services necessary for the provision of a holiday of a reasonable standard;
• It is an integral part of a holiday that a hotelier’s employees should provide guests with assistance with ‘a range of ordinary matters affecting them during their stay’, including assistance guiding them around the hotel;
• (Perhaps unsurprisingly) the actions of the hotel’s employee constituted a failure to provide this service with proper care;
• There was no defence under Regulation 15(2)(c). Following the binding judgment of the CJEU, a narrow view of the defence relied on (and presumably the other defences under that provision) must be taken. It does not apply where the acts or omissions forming the basis of the claim are those of employees of the supplier.

This decision clarifies the law on deliberate acts in the package travel context: the Regulations will apply in such cases, and the organiser will not be able to utilise the defences under Regulation 15(2)(c) (now Regulation 16(4)) to escape liability.

Case details

• Court: Supreme Court
• Judges: Kerr, Hodge, Lloyd-Jones, Arden, Kitchin LLJ
• Date of judgment: 30/7/2021

This article was first published by Lexis Nexis, August 2021