1 CILA Conference 2014 Holidays from Hell: Handling Incidents Abroad
2 Presented by Alex Padfield Managing Partner Hextalls Ltd
3 Types of claims Applicable law The tests for liability Jurisdiction Subrogation and tactics
4 Incident Serious accident in swimming pool at hotel; claimant 22 year old man went down water slide backwards, hit bottom of pool. Has broken his back. Hotel is a well known international hotel chain. Claimant was on holiday booked through English holiday company. Hotel and tour operator have insurers: client could be either (we will look at both).
5 Personal injury cases where accident or alleged breach of duty occurred outside England and Wales are not subject to the portal (paragraph 4.3(7) of the pre-action protocol for low value personal injury claims). There is a 6 month pre-action protocol period not 3 months (paragraph 3.8 of the pre-action protocol for personal injury claims).
6 Key First Question Is this a contractual or non-contractual claim? For example: Is it a package holiday claim? Is it a claim against the hotel directly? Is it a subrogated claim against the hotel? Is it a claim against a travel agent?
7 Why does this matter? Basis of claim will determine applicable law: this will determine liability, damages and tactics. Contractual claim Rome I regulation Non-contractual claim Rome II regulation
8 Contractual claim Applicable law is that chosen by the parties: so need to check the contract. In the case of a package holiday will often be English law. If there is no law provided for, e.g. in the case of an agreement between a hotel and a tour operator then the following applies: Provision of services contract is governed by law of country where service provider has his habitual residence Contracts for sale of goods are governed by law of country where seller has his habitual residence Otherwise generally speaking, governed by law of country where person performing contract has his residence.
9 Non-contractual claim E.g. A claim by an English tourist directly against a foreign hotel; skiing accidents; motor accidents. Rome II Regulation Applicable law is law where event giving rise to the damage occurred. Unless both parties have habitual residence elsewhere; e.g. 2 English holidaymakers in a skiing accident. Or unless all the circumstances are manifestly more closely connected with another country; e.g. a pre-existing contractual relationship which provides for governing law.
10 Package Holidays
11 Regulation 2(1), Package Travel etc Regulations the pre-arranged combination of at least two of the following components when sold or offered for sale at an inclusive price and when the service covers a period of more than twenty-four hours or includes overnight accommodation: (a) transport; (b) accommodation; (c) other tourist services not ancillary to transport or accommodation and accounting for a significant proportion of the package, and (i) the submission of separate accounts for different components shall not cause the arrangements to be other than a package; (ii) the fact that a combination is arranged at the request of the consumer and in accordance with his specific instructions (whether modified or not) shall not of itself cause it to be treated as other than pre-arranged
12 Pre-arranged Transport Accommodation Other tourist services Inclusive price Not simply arithmetic total Must be a dependence and connection between the constituent elements R(ABTA) v Civil Aviation Authority  EWHC 13
13 Additional items bought in resort are not part of a package: Derbyshire v- First Choice Holidays & Flights Ltd  C.L.Y Leftley v- First Choice Holidays & Flights Ltd  CLCC
14 Why is this important? Regulation 15, Package Travel Regulations (1) The [tour operator] is liable to the consumer for the proper performance of the obligations under the contract, irrespective of whether such obligations are to be performed by [the tour operator] or by other suppliers of services... (2) The [tour operator] is liable to the consumer for any damage caused to him by the failure to perform the contract or the improper performance of the contract
15 Regulation 15 Contractual responsibility for proper performance. Tour operator is liable for improper performance including failures of its suppliers. Standard required is reasonable care and skill to keep a customer reasonably safe. Specific defences available: (a) customer s own fault; (b) fault of an independent third party; (c) force majeure. How is the standard determined?
16 Wilson v Best Travel Ltd  1 All ER 353 Tour operator has to exercise reasonable care and skill when selecting accommodation. Must exclude accommodation the characteristics of which are such that a guest cannot spend a holiday there in reasonable safety. Reasonable safety = compliance with the local standard unless the absence of a safety feature might lead the reasonable holidaymaker to decline to take a holiday at the hotel in question.
17 Wilson v Best Travel Ltd  1 All ER 353 The logic of the judgment in Wilson: Save where uniform international regulations apply, there are bound to be differences in the safety standards applied between one country and another The duty of care of a tour operator is likely to extend to checking that local safety regulations are complied with
18 Even in Wilson, local standards were not the end of the matter. There could still be instances where the absence of a safety feature would lead the reasonable holidaymaker to decline. Could this objective test have varied over time as safety standards have improved? Would non-safety glass now be such a feature?
19 Gouldbourn v Balkan Holidays Ltd  EWCA Civ 372 Question as to whether ski instructor had exercised reasonable care and skill in his assessment, instruction and supervision of the claimant. System that the instructor used was common in Western Europe from the 1950 s to 1970 s but had been altered since. Accident happened in Bulgaria. No evidence that what was done was contrary to local practice. FIS rules were also considered.
20 Gouldbourn v Balkan Holidays Ltd  EWCA Civ 372 Court of Appeal agreed with the first instance judge s reasoning: This is not a case of a simple breach of local and international regulations but whether an instructor exercised reasonable care and skill. That has to be judged against the prevailing local standards.
23 Japp v Virgin Holidays  EWCA Civ 1371 Mrs Japp walked into another glass door Court held that local standards are still the test judged against the prevailing standards at the time of construction. But this can include accepted local practice or custom.
24 El Ksar Hotel, Tunisia
25 First Choice Holidays & Flights Ltd v Patricia Holden  EWHC 3775 The duty of care owed is that set out in Wilson v Best Travel It is for the Claimant to prove that the Defendant fell short of the standards applicable in Tunisia The judge could not infer breach of the local standard based upon the evidence before him. The claimant has to prove breach of the local standard.
26 Practically Evidence gathering needs to focus on local standard (certificates of compliance, regulatory approval etc ). Witness statements are preferable in witnesses own language (if possible). Don t fall into trap of occupiers liability or comparing to English law generally. Remember claimant must ultimately prove breach (but beware of resting on your laurels here).
27 Susan Parker v TUI UK Ltd (2009) Thomson internet brochure stated that tobogganing was available in the resort and rep took claimant s money in advance. Event locally organised. Reps assisted with safety briefings and saw excursion as their responsibility. Court considered that reps had assumed a duty of care.
28 Non-package claim Direct booking with hotel. Or booked through travel agent. Or sold through tour operator as principal. Subrogated claim/contribution act.
29 If liability is likely to be non-contractual then local law is most likely to apply. Jurisdiction will also be a factor. Case can only be brought in England if: Defendant is domiciled in England and Wales; or Defendant submits to the jurisdiction voluntarily; or Harmful event occurred in England; or Defendant is one of a number of defendants and another is domiciled in England. Consider from a negotiation point of view whether jurisdiction is a point worth taking early on.
30 If local law: Establish what this is - if possible. Note that local damages (including heads of damage) will apply, even if the claim is brought in the English courts. If it is more advantageous to your insurer client, be prepared to have to provide evidence of local law and damage levels. If it is less advantageous, consider whether you can settle applying English law and damages.
31 Considerations for subrogated recovery: Obligations governed by contract: may be a conflict between law applicable to main claim and law applicable on subrogation. Contribution Act can t be used afterwards if no contractual jurisdiction. Who exactly is the third party: many hotels operate franchises. Remember that admitting liability or compromising claims can prejudice a right to subrogate in England: Barton & others v Goldensun Holidays Ltd  EWHC B6 (QB). Inside or outside EU makes little difference apart from tactics on jurisdiction.
32 Summary: Consider type of claim: contractual/non-contractual Apply relevant law Consider factors affecting right of recovery Obtain local standards evidence early if possible Seek early advice on jurisdiction if necessary to assist tactical decisions.
33 Questions Alex Padfield
34 CILA Conference 2014 Holidays from Hell: Handling Incidents Abroad
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