JUDGMENT OF THE COURT (Sixth Chamber) 12 March 2002

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1 JUDGMENT OF THE COURT (Sixth Chamber) 12 March 2002 (Directive 90/314/EEC - Package travel, package holidays and package tours - Compensation for non-material damage) In Case C-168/00, REFERENCE to the Court under Article 234 EC by the Landesgericht Linz (Austria) for a preliminary ruling in the proceedings pending before that court between Simone Leitner and TUI Deutschland GmbH & Co. KG, on the interpretation of Article 5 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (OJ 1990 L 158, p. 59), THE COURT (Sixth Chamber), composed of: N. Colneric, President of the Second Chamber, acting for the President of the Sixth Chamber, C. Gulmann (Rapporteur), J.-P. Puissochet, V. Skouris and J.N. Cunha Rodrigues, Judges, Advocate General: A. Tizzano, Registrar: H.A. Rühl, Principal Administrator, after considering the written observations submitted on behalf of: - Simone Leitner, by W. Graziani-Weiss, Rechtsanwalt, - TUI Deutschland GmbH & Co. KG, by P. Lechenauer, Rechtsanwalt, - the Austrian Government, by C. Pesendorfer, acting as Agent, - the Belgian Government, by A. Snoecx, acting as Agent, - the French Government, by R. Abraham and R. Loosli-Surrans, acting as Agents, - the Finnish Government, by T. Pynnä, acting as Agent, - the Commission of the European Communities, by J. Sack, acting as Agent, having regard to the Report for the Hearing, after hearing the oral observations of TUI Deutschland GmbH & Co. KG, of the Finnish Government and of the Commission at the hearing on 14 June 2001, after hearing the Opinion of the Advocate General at the sitting on 20 September 2001, gives the following

2 1. 2. Judgment By order of 6 April 2000, received at the Court on 8 May 2000, the Landesgericht (Regional Court) Linz (Austria) referred to the Court for a preliminary ruling under Article 234 EC a question on the interpretation of Article 5 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours (OJ 1990 L 158, p. 59, the Directive ). That question was raised in proceedings between Simone Leitner and TUI Deutschland GmbH & Co. KG ( TUI ) concerning compensation for non-material damage sustained during a package holiday. The relevant Community provisions The second recital in the preamble to the Directive states that... the national laws of Member States concerning package travel, package holidays and package tours, hereinafter referred to as packages, show many disparities and national practices in this field are markedly different, which gives rise to obstacles to the freedom to provide services in respect of packages and distortions of competition amongst operators established in different Member States. According to the third recital, the establishment of common rules on packages will contribute to the elimination of these obstacles and thereby to the achievement of a common market in services, thus enabling operators established in one Member State to offer their services in other Member States and Community consumers to benefit from comparable conditions when buying a package in any Member State. According to the eighth and ninth recitals in the preamble to the Directive, disparities in the rules protecting consumers in different Member States are a disincentive to consumers in one Member State from buying packages in another Member State, and this disincentive is particularly effective in deterring consumers from buying packages outside their own Member State. Article 1 provides that The purpose of [the] Directive is to approximate the laws, regulations and administrative provisions of the Member States relating to packages sold or offered for sale in the territory of the Community. Article 5 provides that: 1. Member States shall take the necessary steps to ensure that the organiser and/or retailer party to the contract is liable to the consumer for the proper performance of the obligations arising from the contract, irrespective of whether such obligations are to be performed by that organiser and/or retailer or by other suppliers of services without prejudice to the right of the organiser and/or retailer to pursue those other suppliers of services. 2. With regard to the damage resulting for the consumer from the failure to perform or the improper performance of the contract, Member States shall take the necessary steps to ensure that the organiser and/or retailer is/are liable unless such failure to perform or improper performance is attributable neither to any fault of theirs nor to that of another supplier of services In the matter of damages arising from the non-performance or improper performance of the services involved in the package, the Member States may allow compensation to be limited in accordance with the international conventions governing such services. In the matter of damage other than personal injury resulting from the non-performance or improper performance of the services involved in the package, the Member States may allow compensation to be limited under the contract. Such limitation shall not be unreasonable. (3) Without prejudice to the fourth subparagraph of paragraph 2, there may be no exclusion by means of a contractual clause from the provisions of paragraphs 1 and The dispute in the main proceedings and the question referred

3 The family of Simone Leitner (who was born on 7 July 1987) booked a package holiday (all-inclusive stay) with TUI at the Pamfiliya Robinson club in Side, Turkey ( the club ) for the period 4 to 18 July On 4 July 1997 Simone Leitner and her parents arrived at the club. There they spent the entire holiday and there they took all their meals. About a week after the start of the holiday, Simone Leitner showed symptoms of salmonella poisoning. The poisoning was attributable to the food offered in the club. The illness, which lasted beyond the end of the holiday, manifested itself in a fever of up to 40 degrees over several days, circulatory difficulties, diarrhoea, vomiting and anxiety. Her parents had to look after her until the end of the holiday. Many other guests in the club also fell ill with the same illness and presented the same symptoms. Two to three weeks after the end of the holiday a letter of complaint concerning Simone Leitner's illness was sent to TUI. Since no reply to that letter was received, Simone Leitner, through her parents, brought an action for damages in the sum of ATS The court of first instance awarded the claimant only ATS for the physical pain and suffering ( Schmerzensgeld ) caused by the food poisoning and dismissed the remainder of the application, which was for compensation for the non-material damage caused by loss of enjoyment of the holidays ( entgangene Urlaubsfreude ). That court considered that, if the feelings of dissatisfaction and negative impressions caused by disappointment must be categorised, under Austrian law, as non-material damage, they cannot give rise to compensation because there is no express provision in any Austrian law for compensation for non-material damage of that kind. The claimant appealed to the Landesgericht Linz, which concurs with the court of first instance so far as regards Austrian law, but considers that application of Article 5 of the Directive could lead to a different outcome. In that connection, the Landesgericht cites Case C-355/96 Silhouette International Schmied [1998] ECR I-4799, paragraph 36, where the Court ruled that, while a directive cannot of itself impose obligations on an individual and cannot therefore be relied upon as such against an individual, a national court is required to interpret the provisions of national law in the light of the wording and the purpose of the directive so as to achieve the result it has in view. The national court observes in addition that the German legislature has adopted legislation expressly concerning compensation for non-material damage where a journey is prevented or significantly interfered with and that in practice German courts do award such compensation. Taking the view that the wording of Article 5 of the Directive is not precise enough for it to be possible to draw from it any definite conclusion as to non-material damage, the Landesgericht Linz decided to stay proceedings and to refer the following question to the Court for a preliminary ruling: Is Article 5 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours to be interpreted as meaning that compensation is in principle payable in respect of claims for compensation for non-material damage? The question 14. By its question the national court seeks to ascertain whether Article 5 of the Directive must be interpreted as conferring, in principle, on consumers a right to compensation for non-material damage resulting from failure to perform or the improper performance of the obligations inherent in the provision of package travel. Arguments of the parties According to Simone Leitner, the third recital in the preamble to the Directive makes it clear that operators must be able to offer packages in all the Member States on the same conditions. The fourth subparagraph of Article 5(2) of the Directive makes it possible to set contractual limits to liability incurred in the case of non-material damage resulting from the non-performance or improper performance of the services constituting a package holiday. That provision means that, according to the Directive, nonmaterial damage must in principle be the subject of compensation. TUI and the Austrian, French and Finnish Governments are, essentially, at one in arguing that the harmonisation of national laws sought by the Directive consists merely of defining a minimum level of

4 protection for consumers of package holidays. In consequence, anything not expressly covered by the Directive in that field, and in particular the kind of damage to be compensated, remains within the competence of the national legislatures. The Directive does no more than set out a body of essential common rules concerning the content, conclusion and performance of package tour contracts without exhaustively regulating the entire subject, in particular, matters relating to civil liability. Accordingly, the existence of a right to compensation for non-material damage cannot be inferred from the absence of an express reference thereto in the Directive. The Belgian Government submits that the general and unrestricted use of the term damage in the first subparagraph of Article 5(2) of the Directive implies that that term is to be construed broadly, with the result that damage of every kind must in principle be covered by the legislation implementing the Directive. In those Member States which recognise liability for non-material damage under the ordinary law, the Directive provides the right to set limits to that liability in accordance with certain criteria. In those Member States in which liability for non-material damage depends on the existence of an express provision to that effect, the absence of such a provision must be deemed to exclude absolutely compensation for non-material damage, which is contrary to the Directive. The Commission first points out that the term damage is used in the Directive without the least restriction, and that, specifically in the field of holiday travel, damage other than physical injury is a frequent occurrence. It then notes that liability for non-material damage is recognised in most Member States, over and above compensation for physical pain and suffering traditionally provided for in all legal systems, although the extent of that liability and the conditions under which it is incurred vary in detail. Lastly, all modern legal systems attach ever greater importance to annual leave. In those circumstances, the Commission maintains that it is not possible to interpret restrictively the general concept of damage used in the Directive and to exclude from it as a matter of principle non-material damage. Findings of the Court The first subparagraph of Article 5(2) of the Directive requires the Member States to take the necessary steps to ensure that the holiday organiser compensates the damage resulting for the consumer from the failure to perform or the improper performance of the contract. In that regard, it is clear from the second and third recitals in the preamble to the Directive that it is the purpose of the Directive to eliminate the disparities between the national laws and practices of the various Member States in the area of package holidays which are liable to give rise to distortions of competition between operators established in different Member States. It is not in dispute that, in the field of package holidays, the existence in some Member States but not in others of an obligation to provide compensation for non-material damage would cause significant distortions of competition, given that, as the Commission has pointed out, non-material damage is a frequent occurrence in that field. Furthermore, the Directive, and in particular Article 5 thereof, is designed to offer protection to consumers and, in connection with tourist holidays, compensation for non-material damage arising from the loss of enjoyment of the holiday is of particular importance to consumers. It is in light of those considerations that Article 5 of the Directive is to be interpreted. Although the first subparagraph of Article 5(2) merely refers in a general manner to the concept of damage, the fact that the fourth subparagraph of Article 5(2) provides that Member States may, in the matter of damage other than personal injury, allow compensation to be limited under the contract provided that such limitation is not unreasonable, means that the Directive implicitly recognises the existence of a right to compensation for damage other than personal injury, including non-material damage. The answer to be given to the question referred must therefore be that Article 5 of the Directive is to be interpreted as conferring, in principle, on consumers a right to compensation for non-material damage resulting from the non-performance or improper performance of the services constituting a package holiday. Costs 25. The costs incurred by the Austrian, Belgian, French and Finnish Governments, and by the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the

5 parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. On those grounds, THE COURT (Sixth Chamber), in answer to the question referred to it by the Landesgericht Linz by order of 6 April 2000, hereby rules: Article 5 of Council Directive 90/314/EEC of 13 June 1990 on package travel, package holidays and package tours is to be interpreted as conferring, in principle, on consumers a right to compensation for non-material damage resulting from the non-performance or improper performance of the services constituting a package holiday.

JUDGMENT OF THE COURT (Sixth Chamber) 12 March 2002 *

LEITNER JUDGMENT OF THE COURT (Sixth Chamber) 12 March 2002 * In Case C-168/00, REFERENCE to the Court under Article 234 EC by the Landesgericht Linz (Austria) for a preliminary ruling in the proceedings