Liability for Lack of Conformity

AuthorMatthew Chapman/Sarah Prager/Jack Harding/Dominique Smith/Thomas Yarrow/Henk Soede
Pages139-231

Chapter 5


Liability for Lack of Conformity

5.1 This chapter considers the liability of ‘the organiser’ which arises under regulations 15 and 16 of the Package Travel Regulations 2018. Such liability is owed to ‘the traveller’ and it flows from the obligations contained in the package travel contract.1At or about the time that the previous (1992) Regulations came into force, it was widely believed that the liability regime introduced by regulation 15 of the Package Travel Regulations 1992 was one of qualified strict liability. Indeed, this is how such liability was described in the first edition of this work. However, as this chapter reveals, liability of this kind is now regarded as firmly rooted in notions of fault.

5.2 In this context, ‘qualified strict liability’ meant that the other party to the contract was strictly liable to the consumer under the Package Travel Regulations 1992 (now, regulation 16(4)(a), (b) and (c) of the Package Travel Regulations 2018) for incidents which arose in the provision of package holiday services unless the defendant was able to invoke one of the statutory defences contained in regulation 15(2)(a), (b) or (c) of the Package Travel Regulations 1992 (now, regulation 16(4)(a), (b) and (c) of the Package Travel Regulations 2018). However, the strict liability approach to regulation 15 did not find favour with the English judiciary who, in the cases decided by reference to this regulation, clearly felt that the strict liability approach overstated the level of consumer protection that was offered by the Regulations. As shown below, case law decided at an authoritative level aligned regulation 15 of the Package Travel Regulations 1992 with the obligations accepted by the parties to the package holiday contract. The English courts have encouraged the parties to any dispute to look back at the package holiday contract, and have made it clear that an approach which (reductively) regards what was contained in regulation 15 of the Package Travel Regulations 1992 as a catch-all strict liability provision is wrong.

1There is a definition of ‘package travel contract’ in Package Travel Regulations 2018, regulation 2(1).

140 Saggerson on Travel Law and Litigation

5.3 The proper approach to such liability required (and, it is submitted, still requires – under the Package Travel Regulations 2018) careful consideration of the underlying contractual obligations, therefore their nature and extent, in order to determine whether there has been a ‘failure to perform or improper performance’ of the contract (or, as the Package Travel Regulations 2018 put it, a ‘lack of conformity’ with the contract). The existence of a breach of contract of this kind provides the gateway for the extended liabilities that regulation 15 of the Package Travel Regulations 1992 imposed on the ‘other party to the contract’ (or, as the Package Travel Regulations 2018 put it, the ‘organiser’) and it is these extended liabilities which provide the ‘consumer’ (or, as the Package Travel Regulations 2018 put it, the ‘traveller’) with opportunities and advantages. Regulations 15 and 16 of the Package Travel Regulations 2018 are expressed by reference to a ‘lack of conformity’ with the obligations contained in the ‘package travel contract’ (or, as the Package Travel Regulations 1992 put it, the ‘package holiday contract’). It is expected that these provisions will, in broad terms, be construed in a manner similar to the approach taken to regulation 15 liability under the Package Travel Regulations 1992.

5.4 The following preliminary matters should be borne in mind:

ƒ Liability under regulations 15 and 16 is, as seen above, imposed on ‘the organiser’.2

ƒ Liability is imposed by the Regulations in favour of the traveller – and the expression ‘traveller’ includes the principal contractor, as well as any person entitled to travel (on the package travel contract).3

ƒ Liability is in respect of the the lack of conformity with the obligations under the contract. That is to say, not everything that goes wrong during the course of a package holiday gives rise to liability for ‘the organiser’.

ƒ Liability under regulations 15 and 16 applies irrespective of whether ‘the organiser’ itself or other travel service providers actually provides or carries out the service or facility about which complaint is made. By contrast with the equivalent provision (regulation 15) in the Package Travel Regulations 1992, regulation 15(5) of the Package Travel Regulations 2018 might be thought to provide weaker protection to the traveller (or consumer) in that it appears to impose conditions (regulation 15(4)(a) and
(b)) before the rights to compensation found in regulation 16 of the Package Travel Regulations 2018 become available. While there is, as yet, little authoritative case law on the proper construction of the Package Travel Regulations 2018, it is suggested that it was not the intention of the EU or domestic legislators to reduce the level of consumer protection afforded by the Package Travel Regulations 2018.

2Package Travel Regulations 2018, regulations 15(1) and 16(3).

3Package Travel Regulations 2018, regulation 2(1).

ƒ Liability is for damage caused by any lack of conformity with the package travel contract.4

ƒ Such damage will often be injuries, loss of bargain and loss of enjoyment of the holiday, together with any incidental or consequential loss and expense incurred as a result of the failure in the proper performance of the contract.

5.5 In short, the organiser (usually, a tour operator) is liable for the damage caused by the lack of conformity with the contract not only of its own staff, but also of carriers and hoteliers, as well as other travel service providers.5This liability does not necessarily involve proving that the tour operator is itself at fault for what has gone wrong. Provided that the lack of conformity is in respect of an obligation under the contract, the tour operator is the primary target for the traveller’s recovery of damages. The intention of the regulators was clearly to provide the traveller with the most accessible target for complaints. Once the validity of the complaint is established and the operation of the statutory defences excluded, it is then up to the tour operator to seek an indemnity from the other service provider. Usually, of course, the other travel service provider will be based abroad. Clearly, the regulators’ intention was that the practical and other difficulties associated with suing a party based overseas would lie with the organiser, rather than with the traveller.

5.6 It is noted above that it is wrong to describe the impact of regulations 15 and 16 as imposing a regime of qualified strict liability (at least, wrong in the manner in which this provision has been interpreted by the English courts). The consumer-friendly focus of the Regulations does not lie in appeals to strict liability. Instead, it is the extended liability focus of the Regulations that provides travellers with certain important advantages. Regulation 15 extends the liabilities of the organiser to cover the shortcomings of other travel service providers for whom it may not have been liable under ordinary principles of the English law of contract. It might be said, therefore, that regulation 15 imposes a framework of extended ‘vicarious’ liability. In other words, the organiser is liable for damage caused by the failures of a wider class of persons than its employees. Issues concerning the extent or reach of a tour operator’s extended liability in the context of the Package Travel Regulations 1992 have recently been considered at the highest level of EU and domestic authority in the X v Kuoni Travel Limited6

litigation, which is discussed in more detail below.

4Package Travel Regulations 2018, regulation 16(3).

5Such as transfer coach companies or the providers of pre-arranged inclusive excursions.

6Case C-578/19 X v Kuoni Travel Limited ECLI:EU:C:2021:213, [2021] 1 WLR 3879, CJEU; X v

Kuoni Travel Limited [2021] UKSC 34, [2021] 1 WLR 3910.

142 Saggerson on Travel Law and Litigation

FRAMEWORK

5.7 It is possible to characterise the process by which the liability of the organiser is established as an algorithm or flow chart in which several connected questions need to be considered. These questions are considered in more detail below. However, the process can be summarised as follows:

ƒ Was the organiser under any contractual duty to the traveller7

ƒ What was the scope of the duty, i.e. what services, facilities or activities did the contractual duty cover8Allied to this issue is whether the party responsible for the provision of the service, facility or activity in question is an agent, supplier or subcontractor for whom the organiser is deemed to be liable9

ƒ What was the content of the duty, i.e. in respect of matters within the scope of the duty, what was required to be done10

ƒ By what standard are the actions of the organiser to be assessed11

ƒ Given scope, content and applicable standard, has there been a breach of the duty?

ƒ If a breach of duty is identified, do the statutory defences exonerate the organiser12

ƒ If not, has the breach caused any recoverable loss? Much of the case law discussed below was decided by reference to the Package Travel Regulations 1992, but is likely to be of continuing relevance to the Package Travel Regulations 2018.

OBLIGATIONS UNDER THE CONTRACT

5.8 The liability of the organiser is wide, but it is restricted to liability for the obligations under the contract. The contract referred to in regulations 15 and 16 can only be the package travel contract and will not extend to off-package services, facilities or activities.13This important qualification is often overlooked.

7The answer will invariably be ‘yes’ if there is a travel contract of any sort, but this is only the starting point.

8The scope of the duty is limited to matters within the travel contract, not, e.g. locally booked...

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