X v Kuoni Travel Ltd [2021] UKSC 34

Mrs X was raped and assaulted by a hotel employee while on a package holiday in Sri Lanka arranged by Kuoni. The Supreme Court held that Kuoni was liable for improper performance of the package travel contract, as the employee's guidance fell within holiday arrangements and the statutory exemptions did not apply.

Facts

In July 2010, the appellant (Mrs X) and her husband booked a package holiday to Sri Lanka through Kuoni Travel Ltd, which included accommodation at the Club Bentota hotel. During the early hours of 17 July 2010, Mrs X encountered N, a hotel employee working as an electrician who was on duty and in uniform. N offered to show Mrs X a shortcut to reception, which she accepted. N then lured her to the engineering room where he raped and assaulted her.

Mrs X brought a claim against Kuoni for breach of contract and under the Package Travel, Package Holidays and Package Tours Regulations 1992, which implement Council Directive 90/314/EEC. It was accepted that there was no systemic negligence by Kuoni or the hotel in employing N, and that the assault was caused by N alone.

Issues

Issue 1

Did the rape and assault of Mrs X constitute improper performance of the obligations of Kuoni under the package travel contract?

Issue 2

If so, is any liability of Kuoni excluded by clause 5.10(b) of the contract and/or regulation 15(2)(c) of the 1992 Regulations?

Judgment

Issue 1: Scope of Holiday Arrangements

Lord Lloyd-Jones, delivering the judgment of the court, held that guidance by a member of the hotel staff was clearly a service within the holiday arrangements Kuoni contracted to provide. The court emphasised that a holiday is intended to be a pleasant and enjoyable experience, requiring a broad interpretation of holiday services:

“I accept the submission of Mr Weir QC on behalf of the appellant that the purpose of the agreement, namely to confer an enjoyable experience, encourages a broad, not a narrow, interpretation of the holiday services contracted for.”

The court agreed with Longmore LJ’s dissenting judgment in the Court of Appeal:

“For such a holiday to be a reasonable standard, hotel staff must be helpful to guests when asked for assistance; all the more must a member of staff, who actually offers assistance, assist the guest in a reasonable way. On no view did N assist Mrs X in a reasonable way when he guided her to the engineering room.”

The court rejected Kuoni’s argument that guiding was not part of N’s employment functions, holding that the relevant question concerned the scope of services Kuoni undertook to provide, not N’s employment contract.

Issue 2: Statutory Exemptions

Following a preliminary reference to the Court of Justice of the European Union (CJEU), the Supreme Court applied the CJEU’s ruling that an employee of a supplier of services cannot be regarded as a supplier of services for the purposes of article 5(2) of the Directive, and crucially, that the organiser cannot be exempted from liability where improper performance results from acts of such employees.

The CJEU held that acts of employees fall within the sphere of control of the supplier of services:

“Since… the acts or omissions of an employee of a supplier of services, in the performance of obligations arising from a package travel contract, resulting in the non-performance or improper performance of the organiser’s obligations vis-à-vis the consumer fall within that sphere of control, those acts or omissions cannot be regarded as events which cannot be foreseen or forestalled within the meaning of the third indent of article 5(2) of Directive 90/314.”

Implications

This decision significantly strengthens consumer protection in package travel arrangements. Tour operators cannot rely on statutory exemptions where failures result from acts of employees of their service suppliers. The court expressly rejected the need to consider vicarious liability principles, establishing a simpler rule whereby tour operators are directly liable for such failures. This avoids the complexity of applying different national laws on vicarious liability depending on where hotels are situated, thus furthering the harmonisation objectives of the Directive.

The judgment confirms that package holiday obligations extend beyond mere transport and accommodation to include ancillary services necessary for providing a holiday of reasonable standard, interpreted broadly in light of consumer protection objectives.

Verdict: Appeal allowed. Kuoni Travel Ltd was held liable to Mrs X both under the Package Travel, Package Holidays and Package Tours Regulations 1992 and for breach of contract for the improper performance of the package travel contract.

Source: X v Kuoni Travel Ltd [2021] UKSC 34