Pictured: Sarah Prager barrister at 1 Chancery Lane

Lawyers say Court of Appeal ruling is ‘obviously wrong’ and is likely to be amended by the Supreme Court. Ian Taylor reports 

A leading industry lawyer has warned that a groundbreaking Court of Appeal ruling which should drastically reduce travel organisers’ liability for personal injury is likely to be reviewed.

Sarah Prager, barrister at 1 Chancery Lane, described as “obviously wrong” the reasoning behind an Appeal Court ruling in a case where a woman on a package holiday in Sri Lanka was sexually assaulted in her hotel.

Travel Weekly reported the ruling in the case of X v Kuoni Travel last month, quoting Travlaw senior partner Stephen Mason on the significance of “the finding that only the hotel is a ‘supplier’ as defined within the Package Travel Regulations, not its employees”.

Prager said: “This is the most important case for many years for this sector. It could be the basis for a defence in 80% of [personal injury] claims.”

But she suggested the Court of Appeal “reached a conclusion on the meaning of the phrase ‘supplier’ in the PTRs so far removed from previous decisions as to be obviously wrong”.

Prager told an Abta travel law seminar last month: “The finding is really good for tour operators, [but] I don’t understand the chain of reasoning. [The finding] will cut down the vast majority of claims and provide a defence in the vast majority of cases. It is a really big deal, but it is very confusing.”

She noted the claimant intends to appeal to the Supreme Court and suggested: “Further clarification is likely to restrict the judgment of the Court of Appeal.”

Prager said: “The purpose underlying the [Package Travel] regulations is to protect the consumer by providing a remedy against a UK-domiciled operator for acts and omissions of its foreign suppliers.

“Those suppliers act through their employees or contractors in performing the services the operator has promised to the consumer. This has been the basic principle underlying the regulations since their inception.”

Prager suggested: “The potential implications are very significant. The vast majority of ‘routine’ accident claims would now appear to fall outside the statutory regime.” She described the decision as “a very powerful weapon in the operator’s arsenal”.

At-a-glance guide to key decisions in the X v Kuoni Travel case

• The High Court found there was no “improper performance” of the package in the case of X v Kuoni Travel, that the sexual assault on X was an event the hotel (and Kuoni) could not “with all due care foresee or forestall”.

• The Appeal Court found the employee was not a supplier within the meaning of the Package Travel Regulations, and that the hotel was the supplier of services that the employee performed.

• But in dissenting from that view, Lord Justice Longmore argued: “The whole point of the [Package Travel] Directive and the regulation is that the holidaymaker should have a remedy against his contractual opposite and it should be left to the tour operator to sort out the consequences with those whom it has itself contracted.”

Appeal Court’s dissenting judge ‘opens a Pandora’s box’

Mrs X was sexually assaulted while on a package holiday in Sri Lanka and claimed damages for the assault against Kuoni.

Lawyer Sarah Prager said: “The claimant had been making her way to the hotel reception. One of the hotel’s employees [an electrician] indicated she could take a shortcut and led her into a room where he assaulted her.

“She sued Kuoni as liable for the actions of the hotel employee. The judge [at the High Court hearing] did not believe parts of her evidence and found she had embellished her case, although the sex offence he did believe. He found against her and for Kuoni. The Court of Appeal backed the judge.”

Unusually, the Appeal Court judges came to a majority decision, rather than a unanimous one, with Lord Justice Longmore dissenting.

The majority decision was that the term ‘holiday arrangements’ in the Package Travel Regulations did not extend to the employee’s conduct in purporting to escort X to the hotel reception since “it was no part of the functions for which (he) was employed”.

In addition, the claim could not succeed “because it was the hotel itself, and not its employee, which was the ‘supplier of services’ for all purposes” under the regulations.

But it was the opinion of Lord Justice Longmore, in dissenting from the ruling, that “guiding guests to the reception was clearly part of the holiday arrangements from Mrs X’s perspective . . . [and that] hotel staff must be helpful to guests when asked for assistance.”

Prager suggested: “They have opened a Pandora’s box in this area of the law.”