The facts of the matter will be very familiar to all those practicing within the travel industry. In brief, X and her husband entered into a contract with Kuoni for an all-inclusive package holiday to Sri Lanka between 8 and 23 July 2010. On 17 July, whilst making her way to reception, X came into contact with N, a uniformed electrician who was employed by the hotel. N offered to escort X to reception via a short cut and in doing so, escorted X to an engineering room where he sexually assaulted X.
X issued proceedings against Kuoni for damages as a result of the hotel’s failure to properly perform its obligations under the contract; Kuoni being liable for the acts and omissions of its suppliers pursuant to Regulation 15 (1) of The Package Travel, Package Holidays and Package Tours Regulations 1992 (‘PTR’).
The matter was dismissed at first instance on the basis that the act of escorting a guest to reception did not fall within the holiday arrangements. Even if it did, Kuoni had the protection of PTR 15 (2) (c) (ii) in that there is no liability if the improper performance was due to an event which neither Kuoni nor the hotel, even with all due care, could foresee or forestall.
N had no criminal record or history which ought to have alerted the hotel to the possibility that such an action may take place following N’s employ. It seemed therefore that the hotel had been unable to foresee or forestall this event taking place.
X appealed and the case was also dismissed by the Court of Appeal who agreed that the act of an electrician escorting a guest to reception did not form part of the obligations under the holiday contract. The main consideration appears to be that this was not part of the role for which N was employed. The Court of Appeal went further and made obiter comments that an employee was not a supplier of services and therefore Kuoni could not be held liable for improper performance under PTR 15 as the event was not an act of Kuoni’s supplier.
X appealed to the Supreme Court who stayed the proceedings in order to refer 2 questions to the ECJ for guidance:
- When a failure to perform the obligations under the contract are due to the actions of an employee of the supplier, can the Tour Operator rely upon the defence set out in PTR 15 (2) (c) (ii)? If so, by which criteria is the court to assess whether that defence applies?
- Is an employee of a supplier to be considered himself as a supplier for the purposes of the above defence?
Dealing with the questions together, the ECJ has held that an employee of a supplier is not himself a supplier of services as the employee has not concluded any agreement with the Tour Operator, but merely performs work on behalf of the supplier. The employee’s work, in most cases, is intended to contribute to the performance of the obligations which the supplier has agreed to perform.
It follows therefore that a Tour Operator can be held liable if the acts or omissions of an employee of the supplier results in the improper performance of the obligations under the holiday contract. I would say that this reiterates the understanding which was held by the industry prior to the Supreme Court’s referral to the ECJ.
As to the availability of any defences, the ECJ distinguished between the defence set out in PTR 15 (2) (c) (i) and PTR 15 (2) (c) (ii); the former being the definition for force majeure and is therefore to be treated differently to the latter which is an event which cannot be foreseen or forestalled.
An event which cannot be foreseen or forestalled must be interpreted as being an event which does not fall within the control of the supplier. The acts of an employee do fall within the control of the supplier and therefore cannot be events which could not have been foreseen or forestalled by the supplier.
The ECJ concluded therefore that the defence set out in PTR 15 (2) (c) (ii) cannot be relied upon by the Tour Operator when there has been a failure to perform the obligations under the holiday contract following an act or omission of the supplier’s employee.
It is prudent to point out that the ECJ was asked to assume that an electrician escorting a guest to reception and the subsequent assault of that guest by the electrician would amount to an improper performance of obligations under the holiday contract.
It begs the question whether Kuoni ought to have pleaded the force majeure defence under PTR 15 (2) (c) (i) instead of the defence under (ii) and whether this would provide a more favourable outcome for Kuoni. It seems unlikely, as the force majeure defence also refers to events beyond the control of the party by whom the exception is pleaded suggesting the same interpretation will be applied, that is, the employee’s actions are not beyond the supplier’s control. However, the ECJ did see fit to make the distinction between the two defences and so perhaps consideration of consequences which could not have been avoided (i) would provide an alternative outcome to consequences which simply could not be foreseen or forestalled (ii).
The matter now goes back to the Supreme Court to provide their judgment as to whether the electrician was performing an obligation under the contract.
It seems that it will be a question of the facts in each individual case as to whether a specific act or omission is within the scope of the holiday arrangements. If they are, then whatever action the employee has taken to bring about the damage, the Tour Operator will be liable and will be unable to rely upon the PTR 15 (2) (c) (ii) defence.
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Claire Scargill, Associate Partner
T: 020 7220 5930 | E: email@example.com
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