Damages and Other Remedies
| Author | Matthew Chapman/Sarah Prager/Jack Harding/Dominique Smith/Thomas Yarrow/Henk Soede |
| Pages | 289-329 |
Chapter 7
Damages and Other Remedies
7.1 This chapter is concerned with damages recoverable in travel cases and with other incidental remedies. It should be borne in mind that pursuant to the provisions of both the Package Travel Regulations 2018 and the UCTA 1977, the organiser is entitled to rely on the limiting and exclusionary provisions of various international conventions; these provisions are dealt with in greater detail in Chapter 10. Criminal sanctions are dealt with in Chapter 12.
BREACH OF TRAVEL CONTRACTS
General principles
7.2 In contract cases, the claimant is generally entitled to recover such damages as will put them in the position they would have been in had the contract been properly performed. In travel cases, damages are usually divided into two broad categories:
(a) General damages, for non-pecuniary loss such as damages for personal injuries and for loss of enjoyment.
(b) Special damage, representing such losses as can be arithmetically calculated, which usually reflect specific sums or expenses incurred by a claimant, for example the expense incurred by a tourist in arranging for alternative hotel accommodation, or the cost of telephone calls home in the aftermath of an accident.
7.3 Whether categorised as general damage or special damage, the claimant in an action for breach of contract is entitled to compensation reflecting that loss which is:
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such as may fairly and reasonably be considered either as arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it
and which:
arises out of special circumstances (outside the ordinary course of things) which was foreseeable by, or should have been in the contemplation of, the contract breaker by reason of his actual knowledge of the special circumstances pertaining to the contract at the time the contract was made
7.4 In this chapter a distinction is drawn between:
ƒ holiday cases; ƒ carriage cases; ƒ hybrid cases.
HOLIDAY CASES
7.5 In holiday cases, damages fall broadly into three categories based on the above general principles. The categories are as follows:
ƒ damages for loss of bargain or the diminution in the value of the holiday contract as a result of the breach;
ƒ damages for loss of enjoyment (which includes items such as distress, anxiety, and vexation);
ƒ special (i.e. pecuniary) damage or loss and expense specifically arising as a result of the breach of the holiday contract.
7.6 In respect of the first two categories in holiday cases – loss of bargain and loss of enjoyment – Bridge LJ noted,
7.7 There are, indeed, particular difficulties involved in assessing damages in holiday cases. It is increasingly common to find these cases reported in much the same way as personal injuries cases have been reported by the legal profession for many years.
however, produced greater consistency in the level of awards or in the manner in which the awards are sub-divided, no doubt because only those cases which appear to be anomalous are considered to be worth reporting. Furthermore, the framework of damages identified above has not, historically, been applied in all courts. Lastly, the great variation in the awards reported underlines the importance of judging each case on its own particular facts; and the importance of paying particular regard to the facts of individual cases is especially significant when attempting to value claims for loss of enjoyment. Sticking too close to a formula can be dangerous when attempting to assess the value of a claim, given that a court is likely to be concentrating on what figure when looked at in the round constitutes adequate compensation for the particular claimant or group of claimants.
Loss of bargain or diminution in value
7.8 This is a familiar concept and the starting point for any claim for damages in holiday cases. It includes:
ƒ the monetary difference between what was bought and what was supplied; and
ƒ a sum representing any physical discomfort
7.9 Although there will be many instances where damages for diminution in value can be arithmetically calculated (and it is the almost invariable practice to do so and to present this head of loss in the Schedule of Special Damage), loss of bargain is almost always approached at trial as if it were an element of non-pecuniary loss. Quantification of damages for loss of bargain, therefore, often appears haphazard and unscientific, although the haphazard appearance of some reported awards may be as much a problem of the reporting as with the decision-making itself.
7.10 Some examples will illustrate how damages for loss of bargain may be approached.
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Example 1
7.11 A traveller contracts for first class transport to a four-bedroomed villa with an Olympic-sized swimming pool and air-conditioning, for 14 nights. The cost is £2,500. In breach of contract the organiser provides standard class travel to a three-bedroomed cottage with no air-conditioning and a small kidney-shaped splash pool. The cost of this reduced package would have been £1,250.
7.12 On facts such as these it should be simple to approach loss of bargain in an arithmetical way. For example, it should be possible to discover what the cost of the package actually supplied would have been, either by reference to the organiser’s own brochure or a similar one. In the example given, the measure of damages for loss of bargain should be £1,250.
Example 2
7.13 Using the same facts as in Example 1, but this time the organiser is able to provide the appropriate four-bedroomed villa for the second week of the holiday, and provides first class travel on the journey home.
7.14 On these altered facts, the loss of bargain would be 25 per cent of the price paid – that is, one half of the value of the first week.
7.15 It is easy to tinker with the examples given to produce an almost infinite number of similar situations. Where a five-star hotel is booked, and a three-star hotel is provided, the difference in the price of the two from the organiser’s brochure or similar brochures should produce a relatively reliable figure by which the diminution in value can be assessed. Where economy class flights are provided in place of the agreed business class, the loss of bargain is the difference between the cost of the two, or the cost of any upgrade paid by the passengers, whichever is the lower figure.
7.16 The same arithmetical approach can be adapted with a little ingenuity where, say, a resort advertised as being to five-star standards fails to meet the advertised standard. If it is possible by reference to specific facilities and services to say that the accommodation provided was in reality little more than of two-star standard, then the diminution in value ought to be the difference between the prices charged to the traveller and that which would have been charged for a two-star hotel in the same area. This approach might be described as the price comparison approach.
7.17 Unfortunately, assessment of damages, even for loss of bargain, is seldom as straightforward as this in real life. It can be seen, in the context of the
comparison between the five-star resort and the two-star hotel referred to above, that a degree of subjectivity affects the outcome. While the price comparison approach gives the appearance of objectivity, fixing the price difference is itself dependent on the court’s acceptance of the comparison the claimant or defendant attempts to make. Very often it will be clear that accommodation falls below the standard advertised, but more difficult to assess, with any objectivity, the degree to which the advertised standard is not achieved. Sometimes courts adopt an alternative price-based approach. This alternative method involves attempting to place a value (at least in percentage terms) on the facilities that should have been supplied but are not supplied pursuant to the contract. So, in Example 3 below, some courts might say that the sports facilities at this particular resort appear to represent about 15 per cent of the cost of the accommodation, and award such a figure by way of the loss of these facilities. It will readily be appreciated that this method of assessment is subject to the same difficulties as that involving price comparisons between the notional standard of the accommodation provided and its advertised standard. Another court in another place at another time might value the sports facilities in Example 3 at only 10 per cent of the cost of the accommodation.
Example 3
7.18 The contract is to provide four-star accommodation in a beach-side hotel with a range of dining and sports facilities. In reality, the hotel is a mile from the beach, it...
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