A roundup of recent court decisions raising issues relating to package holidays, claims for interest brought in England & Wales under a foreign regime, vicarious liability in the context of sexual abuse, suspicion of fault, and the scope of employment duties considered in recent dog walking case.
European Court of Justice rules on refunds regarding package holidays
Union fédérale des consommateurs - Que choisir (UFC - Que choisir), Consommation, logement et cadre de vie (CLCV) v Premier ministre, Ministre de l'Économie, des Finances et de la Relance, Case C-407/21 [08.06.23]
In this case, the European Court of Justice considered French Legislation which permitted tour operators to provide a 'voucher' for any package holidays which were terminated between 1 March to 15 September 2020 instead of a cash refund. Firstly, the court stated that a valid 'refund' has to comprise cash. Secondly, the court confirmed that the French legislation, which releases a tour operator from their reimbursement obligations under Article 12 of the EU Directive 2015/2302, is incompatible with EU law.
The court also clarified that EU Member States cannot claim reliance on 'force majeure' in the context of a situation such as a global health crisis to adopt legislation which deviates from EU law.
This judgment reiterates the emphasis placed on consumer protection in relation to package travel arrangements in EU Member States. In the event of any future 'unavoidable and extraordinary circumstances' such as another global pandemic, tour operators will need to be prepared for the possibility of having to issue a high volume of refunds to customers and ensure compliance with EU consumer protection rights. Furthermore, individual governments within EU Member States will also have to ensure that any national legislation drafted is compliant with relevant EU Directives.
Contact: Claire Mulligan
Clarity provided on claims for interest brought in England & Wales under a foreign regime
Nicholls v Mapfre and Woodward v Mapfre [04.05.23]
For years, the issue of whether claims for interest brought under Rome II should be determined by reference to the law of the lex fori (English) law, has created a tension between defendants and claimants, particularly where the law applicable to the assessment of liability and quantum is not the law of England and Wales.
In this case, the judges at first instance held that interest was a matter of procedure. Mr Justice Martin Spencer, however, overturned these decisions concluding that despite the judges at first instance awarding the correct amounts, the reasoning behind the awards was incorrect. In his view, interest was a substantive rather than procedural and it was not legitimate for the judges at first instance to give effect to Spanish law provisions intended to operate in a different procedural environment for the purpose of awarding penal rates as part of their discretion in English law.
We expect that the divisive issue of claims for interest will continue to be the subject of litigation in the near future and possibly be hashed out in the Court of Appeal or Supreme Court. From a practical perspective, these cases demonstrate that it is vital for insurers and solicitors to proactively manage cases by setting accurate reserves and making early interim payments with a view to achieving settlement at an early stage.
Contact: Rachel Moore
Related item: Spanish penalty interest - the saga continues!
Vicarious liability explored in the context of sexual abuse
Trustees of the Barry Congregation of Jehovah's Witnesses (Appellant) v BXB (Respondent) [26.04.23]
Following the Court of Appeal's decision in March 2021 which stood as a further example of a faith-based establishment being caught by the extended principle of vicarious liability, the Supreme Court has clarified the position by allowing the defendant's appeal. The Supreme Court confirmed that the Trustees of the Barry Congregation of Jehovah's Witnesses was not vicariously liable for the actions of MS.
By way of background, MS was known to BXB through her husband's work and their friendship continued through their involvement with the congregation. On 30 April 1990, BXB, her husband, MS and his wife were involved in door-to-door evangelising. There followed a pub lunch were MS drank heavily and argued with his wife. The families returned to MS' home where he raped BXB.
The court redefined the well-established two-stage test, both stages of which must be satisfied in order to establish vicarious liability. Stage one considers whether the relationship between the defendant and tortfeasor is one of employment or akin to employment. Stage two is the 'close connection' test and considers whether the wrongful conduct was so closely connected with the acts that the tortfeasor was authorised to do, so as to make it fairly and properly regarded as being done while acting in the course of their employment or quasi employment.
Whilst the Supreme Court agreed with the lower courts that the stage one test was satisfied given that MS' relationship with the congregation was one akin to employment, the Court was not satisfied with the decision reached in relation to stage two. They found that the lower courts had taken irrelevant factors into account when analysing whether there was the requisite close connection, including the role of MS' father in encouraging BXB to support MS and the failure of the congregation to condemn inappropriate behaviour displayed by MS against other members. The tortious conduct which formed the subject matter of the claim could not, in the Supreme Court's judgment be fairly and properly regarded as being done in the course of MS' position as an elder.
Contacts: Louise Bedford and Dan Couldrey
Related item: Supreme Court retreats from seemingly extended principles of vicarious liability
Suspicion of fault is not sufficient to prove negligence
Karlevski v Vicinity Centres PM Pty Ltd & Anor [04.04.23]
The County Court of Victoria in Australia has affirmed that the duty of care owed to plaintiffs in personal injury actions is not a guarantee of safety. Even with reasonable care, bad things sometimes happen to good people.
In this case, the plaintiff slipped on some water and fell in Northland Shopping Centre in Melbourne and, as a result, suffered injury to her right knee. She brought proceedings in negligence against the manager of the shopping centre and its contracted cleaner.
There was no dispute as to the plaintiff's injuries and it was accepted that she had slipped on water. However, despite CCTV footage, there was no direct evidence regarding the source of the water spillage, or when the spillage occurred. These issues remained at large during the running of the trial, with the plaintiff alleging that the source of the spillage was a roof leak and that the defendants' respective response to the roof leak was inadequate.
The relevant question for the judge was whether an appropriate path of inferential reasoning supported a conclusion, on the balance of probabilities, that there was sufficient rain to cause the roof to leak. On the evidence, including that there were no recorded roof leaks in the incident location prior to or since the incident, the judge found that to draw a conclusion that there was sufficient rain to cause a roof leak at the incident location at the given time would involve impermissible speculation.
The judge considered this case to be a clear example of the plaintiff proceeding on the supposition that her injury was caused by someone's fault, when, on the evidence, it was not. Ultimately, the judge dismissed the plaintiff's claim.
Contacts: Michael Kavanagh and Jasmine Sandhu
Related item: Bad things sometimes happen to good people
The scope of employment duties considered in recent dog walking case
Slater v McNelis [28.03.23]
In this Scottish case, the notion of what falls within the scope of employment was considered by the court.
By way of background, the pursuer was employed at the defender's Holiday Park at the time of her accident on 20 July 2018. The Park was operated by two partners, one being John Wrigley (now deceased) who had primary responsibility over the holiday park who owned a dog called Khaleesi.
The pursuer attended the office and took Khaleesi out for a walk at a nearby dog park, as she had on two previous occasions. The dog was wearing a "Halti" collar as she was known to pull and could be easily spooked. Khaleesi suddenly bolted, causing the pursuer to fall onto her back and sustain a wedge fracture to her T12 vertebra.
The sheriff concluded that liability could not be established as any walking of Khaleesi, or the other dogs present at the park by employees was undertaken voluntarily and crucially, not on the instruction of Mr Wrigley.
It was held that the pursuer had failed to prove she was instructed by her employer to walk Khaleesi and accordingly, the case failed. As such, it is important for employers to be mindful when giving instructions that there is a risk of a duty of care being created. In this instance, given the nature of the task and absence of direct instructions led to the court concluding that no duty had been in the circumstances.
Contact: Tim Lennox
Related item: Taking employer's liability for a walk.
