X v Kuoni Travel Ltd

Factual and Procedural Background

In April 2010, the Appellant and her spouse entered into a contract with Company A, a tour operator, for a 15-night, all-inclusive package holiday in The Country. The agreement covered return flights from The State and accommodation at The Hotel. In the early hours of 17 July 2010, while walking through the hotel grounds, the Appellant accepted an offer of assistance from “N,” an on-duty hotel electrician wearing staff uniform. N lured her into an engineering room where he raped and assaulted her.

The Appellant sued Company A for damages, alleging breach of contract and liability under the Package Travel, Package Holidays and Package Tours Regulations 1992 (“the 1992 Regulations”), which implement Council Directive 90/314/EEC. The High Court dismissed the claim. The Court of Appeal, by majority, upheld that dismissal. On further appeal, the Supreme Court made a preliminary reference to the Court of Justice of the European Union (“CJEU”). After the CJEU answered the referred questions, the Supreme Court proceeded to judgment without further oral argument.

Legal Issues Presented

1. Whether the rape and assault constituted improper performance of Company A’s contractual obligations under the package holiday contract.
2. If so, whether Company A could rely on an exclusion clause in its booking conditions and/or on regulation 15(2)(c)(ii) of the 1992 Regulations to escape liability.

Arguments of the Parties

Appellant’s Arguments

• The package holiday contract should be interpreted broadly; ancillary services—including safe guidance by hotel staff—are inherent in a four-star holiday.
• N’s act of guiding was a contracted service; the assault therefore amounted to improper performance.
• Company A cannot invoke the exclusion clause because it conflicts with the Unfair Contract Terms Act 1977 and is co-extensive with the statutory defence, which is unavailable on these facts.
• Fault under regulation 15(2) should be assessed by reference to the supplier actually providing the service; if N is considered a supplier, the defence is inapplicable because he was at fault.

Company A’s Arguments

• The contractual obligations did not encompass guiding guests; no such term can be implied as reasonable or necessary.
• N lacked actual or apparent authority to guide guests; his conduct was a criminal enterprise, not a contractual service.
• Even if guidance were a contractual service, the assault does not equate to failure to exercise reasonable care and skill in providing that service.
• Regulation 15(2)(c)(ii) and the matching contractual clause exempt Company A because neither it nor The Hotel could have foreseen or forestalled N’s criminal act.

Intervener (Company B) Arguments

• An employee of a hotel is not a “supplier of services” for regulation 15 purposes; the relevant supplier is the hotel itself.
• If the hotel was not at fault (directly or vicariously), Company A may rely on regulation 15(2)(c)(ii).
• Introducing vicarious-liability analysis would unnecessarily complicate package holiday litigation and undermine the Directive’s uniform objectives.

Table of Precedents Cited

Court’s Reasoning and Analysis

1. Scope of Contractual Obligations. The Supreme Court adopted a purposive, consumer-friendly approach: a package holiday promises an enjoyable experience, so ancillary services—such as assistance by hotel staff—fall within the contract. Guiding a guest to reception at a four-star hotel was therefore a contractual service.

2. Improper Performance. Because N was purporting to act as a guide, his sexual assault constituted a catastrophic failure to provide that service with reasonable care and skill, amounting to improper performance under both the contract and regulation 15.

3. CJEU Guidance. The CJEU held that although an employee is not a “supplier of services,” the employee’s acts are attributable to the supplier and thus to the organiser. Consequently, events caused by such employees fall within the organiser’s sphere of control and cannot trigger the article 5(2)(c)(ii) exemption.

4. Statutory and Contractual Defences. Given the CJEU ruling, Company A could not rely on regulation 15(2)(c)(ii) or its mirror exclusion clause. The Unfair Contract Terms Act 1977 also precluded excluding liability for personal injury stemming from negligence.

5. No Need for Vicarious Liability Analysis. Liability arose directly from the regulatory and contractual framework; resort to domestic principles of vicarious liability would undermine the Directive’s uniform application.

Holding and Implications

Appeal ALLOWED. Company A is liable to the Appellant for damages under both the contract and the 1992 Regulations; it cannot invoke the contractual exclusion clause or regulation 15(2)(c)(ii).

Implications: The judgment affirms that tour operators bear broad, non-delegable obligations for ancillary services provided during package holidays and that the article 5(2)(c)(ii)/regulation 15(2)(c)(ii) defence is unavailable when improper performance stems from acts of employees of service suppliers. The decision strengthens consumer protection and clarifies that contractual or statutory exclusions will be narrowly construed in this context.