X v Kuoni: What could the consequences be for travel?

In defence of the claim, Kuoni adduced evidence that all Sri Lankan procedures, as a matter of custom and practice as demonstrated by expert evidence, had been complied with, that N was a man of previous good character and that he was employed as an electrician and not a security guard as originally alleged. They also sought to rely on the defence in section 15(2)(c)(ii) of the 1992 Regulations that the assault was an event which neither Kuoni nor the hotel, as the supplier of the services, could foresee or forestall even with all due care (referred to here as “force majeure”).

In light of Kuoni’s defence, Mrs X conceded that N was an electrician, Kuoni had no control over the hotel’s employees, N’s recruitment had complied with local law, custom and practice and there was no reason for Kuoni or the hotel to have identified N as a risk. She also accepted that Kuoni had not breached its duty of care to her and was not itself vicariously liable for N. Accordingly, she pursued her claim on the basis that the assault by N while on night duty was improper performance of the contractual services that Kuoni had agreed to provide. These services included those of all employees connected with the hotel who had to discharge their duties with reasonable skill and care.

The claim was first heard in the High Court where it was dismissed. In essence, the judge found that N’s actions were not part of the contracted services and in any event, the assault was not one which Kuoni or the hotel could have foreseen or forestalled even with all due care. Mrs X appealed.

The Court of Appeal reached the same conclusion as the High Court. On a majority decision, they held that the expression ‘holiday arrangements’ in Kuoni’s booking conditions did not include a member of the hotel’s maintenance team assisting a guest to reception, which was no part of the duties for which he was employed. In addition, they found that the hotel and not N was the supplier of the services and Kuoni could accordingly rely on the force majeure defence. The absence of any proven fault on the part of Kuoni or the hotel was also noted.

Mrs X has appealed again, this time to the Supreme Court. Recognising the potential impact of this case for the travel industry generally, ABTA was given permission to intervene to enable it to make submissions on the wider context. The issues before the court are whether the sexual assault constituted improper performance of Kuoni’s contractual obligations and, if so, whether they are able to rely on the force majeure defence in the 1992 Regulations.

Interim judgment was given in July 2019. However, there is as yet no conclusion. Given the 1992 Regulations gave effect to an EU directive, the Supreme Court has referred two questions to the Court of Justice of the European Union (CJEU). These are, in summary, whether there is scope for reliance on the force majeure defence where there has been improper performance by a hotel employee, if there is, by what criteria a national court should assess if it is available on the facts and whether, for the purposes of the defence, an employee of the hotel can himself be considered a ‘supplier of services’.

The specific questions referred to the CJEU may indicate that the Supreme Court is of the view the assault by N is capable of being improper performance of Kuoni’s contractual obligations notwithstanding the fact he was an electrician and they would in all probability not have been found liable had he been their direct employee. If this is the case, the battle is over the extent to which the force majeure defence can save Kuoni from liability. Organisers and their insurers should pay close attention as the final judgment may have far reaching and expensive consequences.

Claire Ingleby is director at MB Solicitors.

This article was first written for Abta’s Travel Law Today issue number eight, which can be downloaded here.