Choosing to rent a villa, apartment, holiday home or an annexe to an owner’s residence is an increasingly popular way for holidaymakers to secure accommodation, both overseas and in the UK. Booking a holiday rental through platforms such as Airbnb and Booking.com is easy enough, but guests may be surprised at the challenges and complexities involved if things go wrong, as outlined by Christopher Deacon.
Booking holiday and short-term rentals on online platforms is now so popular that the UK Office for National Statistics (“ONS”) gathers data on what it describes as the “online collaborative economy platforms”. In the last three months of 2023, the ONS reports there were nearly 1.9 million stays in UK short-term lets, totalling almost 18.1 million guest nights. Airbnb alone boasts almost eight million listings worldwide.
Who might be liable for an injury in a holiday rental property?
If a guest suffers a serious injury while staying at a holiday rental and considers this was due to fault, neglect or a breach of duty, there are several potential individuals or entities the guest may consider pursuing for damages, with differing legal issues and challenges applying to each potential defendant. The position will be further complicated in cases of international travel, with questions of jurisdiction (the courts in which an individual can bring their claim) and applicable law central to determining the available options.
What are the roles and responsibilities of online booking platforms and agents?
The most obvious place for a guest to turn is the online platform through which they booked the accommodation. The guest will almost certainly have a contract with the online booking platform such as Airbnb or Booking.com. However, the guest may be unaware of the likely attempts by the booking platform to limit its liability under the booking terms and conditions. The booking platform will usually argue that it is nothing more than a “shop window” advertising short-term holiday rentals to the website’s users, where they enter into a contract directly with the property owner or host for the provision of the accommodation.
Airbnb’s website, for example, has multiple sets of terms and conditions. A guest will have clicked to accept the terms and conditions as part of the requirements for registering to use the website. With other online platforms, the guest will most likely have accepted the terms and conditions when making the booking.
The reality is that only when something goes wrong will a guest think about the details of the terms and conditions. They may be surprised to find that the terms submit any claim to the jurisdiction and laws of a foreign court; for example, Ireland and Irish law in the case of Airbnb and Amsterdam and Dutch law in the case of Booking.com.
Before starting proceedings, an injured guest should check to ensure they are pursuing the correct legal entity. The identity of the part of the booking platform’s corporate structure the guest has a contract with may depend on the guest’s country of residence and what and where they have booked using the online booking platform.
The terms of the two leading online booking platforms do recognise a consumer’s right to choose where to bring proceedings as a matter of European Union and UK law. This does not, however, mean a consumer will not encounter difficulties in a given case. In Wells v Airbnb and Others (Case No. 50-2022-CA-006504-XXXX-MB, Palm Beach County Florida Circuit Court), Airbnb challenged the jurisdiction of the Florida courts. Airbnb unsuccessfully argued that pursuant to its terms and conditions, a plaintiff who lives in the UK must pursue any claim they have against Airbnb in the Irish courts and against Airbnb Ireland.
The extent to which the online booking platform will be able to rely on the “shop window” defence may depend on the courts in which the case is being pursued and the law that applies to assessing a claim for damages. Arguably, a choice of law clause in standard booking terms and conditions is not really a choice for the consumer as the booking platform imposes the standard terms on a take-it-or-leave-it basis. However, in the UK and European Union, consumers do have some added protection: the choice of law must not result in depriving the consumer of the protection they would otherwise have had.
Arbitration clauses in consumer contracts
Consumers may also find the online booking platform trying to enforce an arbitration clause in their standard terms and conditions. Arbitration is a form of alternative dispute resolution. An arbitration clause requires the guest to pursue their claim through a specific procedure rather than seeking redress in the courts that would otherwise have jurisdiction over their claim. In English law, under the Consumer Rights Act 2015, an arbitration clause may be considered an unfair term if it causes an imbalance in the rights of the guest as a consumer and to their detriment. The enforceability of an arbitration clause will, again, turn on which law properly applies when interpreting the contract the consumer has with the online booking platform and/or as part of the holiday rental booking more generally.
Scope of the online booking platform’s duty to guests
It might be argued that the online booking platform has assumed responsibility for the safety and suitability of the accommodation listed on its website. One of the features in Wells v Airbnb is that the booking platform was generating significant revenue from listing properties in Florida. In 2020/21, Airbnb averaged over 345,000 listings in the US state of Florida alone, more than any other US state. Evidence in the case disclosed Airbnb’s involvement in the collection of payments made by guests to the host property and its financial interest in the plaintiff’s booking. This may be a key factor in certain cases, and depending on which country’s law applies, to establish the liability of the online booking platform in the chain of contractual relations between the parties.
As a matter of English law, the booking platform’s role is likely to require assessment on a case-by-case basis, with reference to supporting evidence. As Prager, Brechtelsbauer and Aujla note in their article on the assumption of responsibility for online holiday rental platforms, a booking agent may have assumed responsibility for injury suffered by a guest at accommodation arranged through their platform. One of the requirements for an assumption of responsibility under English law is it cannot be inconsistent with the express contractual terms. This may seem an insurmountable hurdle for a consumer. However, Prager, Brechtelsbauer and Aujla recognise that such “contract terms can be considered unenforceable for reasons of unfairness, in accordance with the Consumer Rights Act 2015”.
Another category of case might be in relation to a duty to warn guests about the risks of renting a property in a particular area, for example, due to criminal activity. In the California case of Castaneda v Olsher (2007) 41 C4th 1205, a mobile home park resident brought an action against a park owner after he was injured by a stray bullet shot during a gang fight in the mobile home park. The Supreme Court held that the park owner had no duty not to rent to gang members absent circumstance making gang violence “extraordinarily foreseeable”. The position will vary depending on where the case is brought and the applicable law. However, the courts may be reluctant to frame liability in terms of a duty to warn and prefer to analyse from the perspective of the duty to ensure a guest is reasonably safe while at the holiday rental.
Can the property owner and/or occupier be found liable for a serious injury in a holiday rental?
The owner of the holiday rental in which an injury occurs is likely to be a party to any legal proceedings. Again, the position on liability will vary depending on the applicable law. However, it is commonplace for a property owner to owe a duty of care to those who are visiting.
Under English law, the common law duty owed by an occupier is enshrined in statute. The Occupiers’ Liability Act 1957 requires the occupier of premises to take such care as is reasonable to see that the visitor will be reasonably safe in using the premises for the purposes for which they are invited or permitted to be there.
The injured guest may decide to bring their claim for damages based on principles of non-contractual liability or tort. Some foreign laws require the claimant to choose whether to sue in tort or contract. This may further complicate the position on applicable law, as demonstrated in the case of Owen v Galgey [2020] EWHC 3546 (QB).
Mr Owen sustained a serious injury when he fell into an empty swimming pool at a holiday home in France owned by Mr and Mrs Galgey. The rules on which law should apply to determine a claim based on non-contractual liability in tort are set out in the Rome II Regulation. The starting point is that English law should have governed Mr Owen’s claim against the Galgeys as they were all habitually resident in England at the time of the incident. Mr Owen would have needed to show the Galgeys were at fault under English law, whereas French law made them strictly liable as owners and occupiers of the holiday home.
The English High Court allowed Mr Owen to rely on an exception to the default rule on applicable law, deciding French law should apply to his claim against all defendants on the basis the tort was manifestly more closely connected with France. The judge found that the owners had a significant and long-standing connection to France, the accident occurred in France, and the works to the empty swimming pool were being carried out by a French company pursuant to a contract governed by French law. Furthermore, the Galgeys’ insurer was a French company, with the contract of insurance governed by French law.
Will the online holiday rental have comprehensive liability insurance?
If the victim of a serious injury is forced to bring a claim against the owner or occupier of a property, then one of the biggest concerns will be whether the other party has the financial means to satisfy an order to pay damages. In the case of a life-changing injury, these could run into tens of millions of pounds. Many hosts offering their accommodation as holiday rentals on one of the online booking platforms (or otherwise) may be doing so as a cottage industry. If the owner/occupier is under-insured or not insured at all to meet their potential liability to guests, they could find the victim of a serious injury attempting to enforce a judgment for damages against the owner directly in their personal capacity. Not only is there a risk to the guest that the owner may not be able to satisfy such a judgment, but there is also a risk to the owner that if they are not adequately insured, they may have to find alternative means to pay what a court has ordered.
Airbnb reminds hosts to arrange appropriate insurance to cover their potential liability to guests. However, this is not a mandatory requirement for a host to be able to list their property on the platform. Hosts should exercise caution in relation to Airbnb’s assurance that the host liability insurance it puts in place is “top-to-bottom protection”. The insurance only provides up to US$1m in coverage per stay, which equates to less than £800,000 of liability insurance coverage. Based on the author’s recent experience of damages approved by the High Court in London, without additional insurance, the host may be insured for less than 5% of the total award of damages. Every case differs, but with inflationary pressures and rising wages, claims for damages following a life-changing injury are on an upward trajectory, and those who are at risk of defending such claims need to have suitable insurance in place.
Property managers, maintenance and cleaning companies
In the case of professional holiday rentals, it is common for a management company to be appointed to service the accommodation before and after a rental. The property managers will be responsible for cleaning, servicing and maintenance, and identifying and rectifying hazards that pose a risk of injury to guests. In Wells v Airbnb and Others, the role of the property management company and its employees was central to the issues in the case. The owners had purchased the mat Mrs Wells slipped on, but it was the responsibility of the property managers to replace it. It was alleged that the property manager had failed to replace the mat in a timely manner, creating a hazard to guests. The offending mat was then disposed of following the incident, giving rise to issues of spoliation of evidence.
Concluding thoughts
Each claim arising from a serious injury in a holiday rental requires careful analysis on a case-by-case basis. It may take some probing requests for disclosure of evidence to ascertain the contractual position between the guest, the online booking platform, any property management company involved and the property owner/occupier. This will help inform who is responsible for what and where liability might ultimately rest. It will also inform the correct corporate entity that needs to be named in proceedings.
The parties to a claim for damages will also determine the courts in which an injured guest can pursue their claim and which law should apply. As the case of Owen v Galgey illustrates, an injured guest should carefully consider the options available to them and the likely outcome depending on which law applies and whether they pursue a claim in contract, tort or (if possible under the applicable law) both.
Holidaymakers may also encounter similar challenges with holiday excursions booked through an online platform. Excursion websites will often boast about a particular excursion, listing the five-star reviews left by previous guests but without highlighting the risks of the activity and the complexity of the booking terms and conditions if something goes wrong.
This well-known model of offering holiday accommodation and activities may well provide choice and flexibility to consumers, but it has the risk and disadvantage of added complexity if an individual needs to seek redress should something go wrong.
Chris Deacon delivered a webinar on this subject for APIL, available to access on-demand on their website.
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