X v Kuoni: new ruling has significant implications for holidaymakers injured on a package holiday

Posted: 15/09/2021

The Supreme Court has recently handed down its judgment in the long-running case of X v Kuoni and has unanimously allowed the claimant’s appeal.

The key issues centred on whether a tour operator was liable for the improper performance of a package contract, following the sexual assault and rape of a customer by a hotel employee, whilst on the hotel premises.

The claimant, with her husband, purchased a holiday contract with the defendant tour operator for an all-inclusive package holiday to Sri Lanka. During the course of the holiday, the claimant found herself in the hotel grounds when she encountered the hotel’s electrician, who offered to show her a shortcut to the reception area of the hotel. Unfortunately, he then led her to a room in the hotel, where he assaulted and raped her.

The claimant submitted that the sexual assault amounted to an improper performance of the contract and that she should therefore be awarded damages. In its defence, the tour operator stated that the assault did not fall within the hotel’s contracted services and that the electrician did not satisfy the definition of a ‘supplier’ within the Package Travel Regulations 1992 (PTR). It also pleaded that the supplier hotel could not have reasonably foreseen this incident taking place and that the tour operator was consequently not liable to the claimant.

The High Court initially dismissed the claim, prompting the claimant to refer it to the Court of Appeal, which upheld the decision of the High Court. The claimant then resorted to a further appeal to the Supreme Court.

The following questions of interpretation regarding the PTR Regulation 15 defences were referred to the European Court of Justice (CJEU), to assist the Supreme Court in its deliberations::

• is the defence under Regulation 15(2)(c)(ii) of the PTR available to a tour operator in principle and, if so, how does the defence operate?
• is an employee of the hotel himself a ‘supplier of services’ for the purposes of Regulation 15(2)(c)(ii)?

In its response, the CJEU determined that:

• an employee is not a ‘supplier of services’ as he has not concluded an agreement with the package travel organiser and only performs work on behalf of a supplier of services;
• an organiser may still be liable for the acts or omissions of an employee of a supplier of services, if they constitute improper performance of an obligation under the contract.

At the appeal hearing, the Supreme Court unanimously allowed the claimant’s appeal and followed the interpretation given by the CJEU. Although it concluded the electrician was himself not a ‘provider of services’, he was an employee of the hotel and his actions fell within the employer’s sphere of control.

It was also noted that the hotel had a four star rating and that holidaymakers could reasonably expect to receive assistance, given the overall standard of the hotel. Indeed, the tour operator’s own terms and conditions stipulated that supplier staff should offer assistance to guests.

The Supreme Court concluded that this assistance should extend to giving directions and guiding a guest around the hotel. The assault/deliberate act of the hotel’s employee did therefore amount to a failure to provide services with proper care.

It is perhaps unsurprising that the Supreme Court found in favour of the claimant, following the guidance given by the CJEU and taking into account one of the primary objectives of the PTR: consumer protection. This important decision means  tour operators can no longer hide behind the pleaded Rule 15 defences in circumstances where the individual who causes  injury is not a supplier of services under the contract.   

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