C-168/00

LEITNER

OPINION OF ADVOCATE GENERAL TIZZANO delivered on 20 September 2001 1

1. Is the travel agent who sells a package The relevant legal provisions holiday also responsible, in the event of the non-performance or improper performance of the contract, for non-material damage suffered by the tourist for loss of enjoyment of the holiday?

The Community provisions

2. As is well known, Directive 90/314 forms part of the broad context of con- sumer protection policy which, over several decades, has undergone interesting and significant developments not only in the Member States, but also at Community level. Originally based on sporadic and occasional measures adopted on the basis of Article 100 of the EC Treaty (now, after amendment, Article 94 EC), Community action on consumer protection was sub- That is the question which, by the order of sequently given, first in the Single European 6 April 2000, the Landesgericht (Regional Act of 1986 and then in the Maastricht Court) of Linz (Republic of Austria) Treaty of 1992, express mention and a referred to the Court pursuant to more transparent legal base in Article 100a Article 234 EC seeking an interpretation (now Article 95 EC), finally being incor- of Article 5(2) of Council Directive porated independently as one of the Com- 90/314/EEC of 13 June 1990 on package munity policies contained in Article 129a travel, package holidays and package tours (now Article 153 EC). Thus in the course (hereinafter 'Directive 90/314' or 'the of time numerous important directives have directive'). 2 been adopted, which have taken direct account of the need to protect consumers, in conjunction with directives geared to the 1 — Original language: Italian. implementation of the internal market and 2 — OJ 1990 L 158, p. 159. the progressive liberalisation of the move-

ment or goods and persons between the States. In particular, the directive was Member States. In particular, those direc- prompted by the existing differences noted tives have concentrated on specific aspects between the Member States in relation to which occasionally require common regu- operating practices and regulations in lation, notably in respect of contractual respect of package travel, package holidays rights and civil liability. 3 and package tours (also referred to as 'packages'), which give rise to obstacles to the freedom to provide services and dis- tortions of competition amongst operators established in different Member States

Secondly, the fact that the Directive is intended to assure other objectives cannot preclude its provi- 3 — Without any claim to completeness, I note here, in sions from also having the aim of pro- particular, on the basis of Council Directive 85/374/EEC of 25 July 1985 on the approximation of the laws, regu- tecting consumers. Indeed, according to lations and administrative provisions of the Member States concerning liability for defective products (hereinafter Article 100a(3) of the Treaty, the Commis- 'Directive 85/374'), to which I will return in greater detail later, the following acts: Council Directive 85/577/EEC of sion, in its proposals submitted pursuant to 20 December 1985 to protect the consumer in respect of that article, concerning inter alia consumer contracts negotiated away from business premises (OJ 1985 L 372, p. 31); Council Directive 87/102/EEC of 22 De- protection, must take as a base a high level cember 1986 on the approximation of the laws, regulations and administrative provisions of the Member States con- of protection'. 5 cerning consumer credit (OJ 1987 L 42, p. 48), amended most recently by Directive 98/7/EC (OJ 1998 L 101, p. 17); Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (OJ 1993 L 95, p. 29); Direc- tive 94/47/EC of the European Parliament and the Council of 26 October 1994 on the protection of purchasers in respect of certain aspects of contracts relating to the purchase of the right to use immovable properties on a timeshare basis (OJ 1994 L 280, p. 83); Directive 97/7/EC of the European Parliament and the Council of 20 May 1997 on the protection of consumers in respect of distance contracts (OJ 1997 L 144, p. 19); Directive 1999/44/EC of the European Parliament and the Council of 25 May 1999 on certain aspects of the sale of consumer goods and associated guarantees (OJ 1999 L 171, p. 12).

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4. In view of the stated objectives, the 6. However, the provision of most import- Directive specifies 'a minimum of common ance in the present case is Article 5, which rules' to give a Community dimension to provides: the package travel industry (seventh recital), rules concerning, in particular: the information to be given to the con- sumer, the regulation of package travel contracts, with specific regard to their content, conclusion and performance '(1) Member States shall take the necessary throughout the Member States, and the measures to ensure that the organiser provision of a guarantee for consumers in and/or retailer party to the contract is the event that the organiser and/or retailer liable to the consumer for the proper become insolvent or bankrupt. In particu- performance of the obligations arising from lar, as regards contractual liability, the the contract, irrespective of whether such nature of the triangular relationship obligations are to be performed by that between the organiser and/or retailer, the organiser and/or retailer or by other sup- consumer and the provider of services must pliers of services without prejudice to the be stipulated in order that, as a general right of the organiser and/or retailer to rule, a single party amongst the former may pursue those other suppliers of services. be identified as liable for damage caused to the consumer by the non-performance or improper performance of the contract.

(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, because:

This obligation must be stated clearly and In the matter of damages arising from the explicitly in the contract'. 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 inter- national conventions governing such ser- vices. 7. However, Article 8 of the Directive pro- vides:

In the matter of damages other than 'Member States may adopt or retain more personal injury resulting from the non-per- stringent provisions in the field covered by formance or improper performance of the this Directive to protect the consumer'. I - 2636

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10. According to the information supplied by the national court and the Austrian Government in its written observations, The facts and the question referred for a legal opinion is divided as to whether, preliminary ruling outside the cases expressly provided for in the aforementioned law, non-material dam- age may nevertheless be compensated on the basis of general rules. However, no doubt exists in the case-law of the Oberster Gerichtshof (Austrian Supreme Court), 11. The family of the plaintiff in the according to which non-material damage national proceedings, Simone Leitner, may be compensated only when expressly

7 — See judgment Ob 592/88, (JBl. 1988, 779); 3 Ob 544/88 (SZ 6 — BGBl. No 247/1993, p. 247. 62/77).

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booked with the defendant, TUI Deutsch- plaintiff included in that amount, over and land GmbH & Co KG (hereinafter 'TUI'), above material damages (Schmerzengeld or through the Austrian travel agent, KUONI, pretium doloris), non-material damages in a package club holiday (all-inclusive stay) respect of loss of enjoyment of her holiday. in the holiday village 'Robinson Club Pamfiliya' (hereinafter the 'club') in Side, Turkey, for the period from 4-18 July 1997.

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16. According to the Landesgericht, that provisions of its own law, as far as possible, doubt is reinforced by considerations of a in the light of the wording and the purpose comparative nature. Indeed, it notes that in of the Directive so as to achieve the result it the Federal Republic of Germany the com- has in view. 8 bined provisions of paragraphs 253 and 651(f), N o 2, of the Bürgeliches Gesetzbuch (BGB; German Civil Code) provide for compensation for non-material damage where a journey is prevented or significantly interfered with. However, the 18. Thus, considering interpretation of the fact that in at least two Member States of Directive necessary in order to rule on the the European Union the extent of liability is case before it, the Landesgericht has different for tour operators seems to be referred the following question for a pre- incompatible with the stated dual objec- liminary ruling, pursuant to Article 234 tives of Directive 90/314 aimed at, on the EC, to the Court of Justice: one hand, eliminating disparities between the national laws of the Member States in order to abolish obstacles to the freedom to provide services and distortions of compe- tition, and, on the other, to ensure a 'Is Article 5 of Council Directive uniform level of consumer protection. It is 90/314/EEC of 13 June 1990 on package therefore necessary to clear up the doubts travel, package holidays and package tours surrounding the scope of the Directive. to be interpreted as meaning that compen- sation is in principle payable in respect of claims for damages for non-material dam- age?'

before the national court, the Austrian, of the harmonisation of national legislation Belgian, Finnish and French Governments sought by the Directive is merely to define a and the Commission have submitted obser- minimum level of protection for consumers vations. Those observations reflect two of package tours. Accordingly, it is con- different positions: the plaintiff, the Belgian tended that anything not expressly covered Government and the Commission, relying by the Directive, particularly the type of on the purpose and the letter of Directive damage to be compensated, lies within the 90/314, maintain that Article 5 must be competence of national legislation. Indeed, interpreted as meaning that the damage according to that argument, if the Com- referred to in the Directive also includes munity had intended to achieve complete non-material damage caused by loss of harmonisation, it would have adopted enjoyment of a holiday; the other parties, much more detailed provisions. On the invoking the Directive's aim to provide a contrary, the Directive merely sets out an minimum level of harmonisation, contest essential core of common rules concerning that interpretation and contend that all that the content, the conclusion and the per- can be inferred from Article 5 is the mere formance of package tour contracts right of Member States to provide in their throughout the Member States, without laws for compensation for such damage. exhaustively regulating the entire subject and, in particular, matters related to liabil- ity. Thus, in view of the lack of any explicit reference to compensation for non-material damage, it is argued that not only can such liability for compensation not be inferred, 20. Accordingly, from the point of view of but also that such liability must be this latter argument, the nature of the expressly precluded on the specific assump- harmonisation provided for by the directive tion that the Community legislator did not would appear to be of central importance intend to regulate it through the application for the purpose of answering the question of common rules. On the other hand, the referred by the Landesgericht. Thus, as a Austrian Government, in particular, notes preliminary step that argument will be that no other interpretation is offered by considered before proceeding to a detailed the text of the Directive, or the preparatory analysis of Article 5 of the directive and the proceedings, or the report concerning the obligations contained therein. implementation of the Directive. 9

relevant national legislation, but merely a scope of the harmonisation intended by the so-called minimal harmonisation with the Directive. In other words, identifying the intention, in other words, of defining a minimum regulatory content established by basic standard of consumer protection the Directive in order to ascertain whether containing an essential core of common it covers compensation for non-material rules for the purpose of regulating certain damage, whilst noting that, in this context, fundamental aspects of the matter. Despite obligations imposed on Member States may that, nothing decisive has yet been said for be derogated from, but only in one direc- the purpose of answering the specific ques- tion: the direction of greater protection for tion for a preliminary ruling. Although the consumer. If, as I believe, that is the limited to 'a minimum of common rules', case as far as the area covered by the the Directive nonetheless still requires legis- provisions of the Directive is concerned, lative harmonisation and the Member then the problem is not that there may be States obviously must comply with that discrepancies between national laws (like obligation, albeit retaining the power to that encountered by the Landesgericht maintain in force more stringent provisions between Austrian and German legislation), to protect the consumer (Article 8). In but rather that, if such were the case, one of other words, minimal harmonisation does those laws would have failed to comply not mean no harmonisation or still less, with the obligations imposed by the Direc- that the provisions of the directive have no tive. regulatory force or that such regulatory force applies solely to matters governed by a completely uniform regulation. However, in my opinion, the abovementioned argu- ment falls into this ambiguity when, on the basis solely of the fact that the directive in question does not contain such rules in respect of compensation for damage, it infers that the directive was not intended to The scope of Article 5 of Directive 90/314 deal with the question of the extent of liability and that question therefore remains within the competence of each Member State. 24. Examining the regulatory scope of the Directive for our present purposes, it must immediately be noted that, although some of its provisions leave a margin of dis- cretion to the Member States, Article 5 nevertheless lays down a number of provi- sions concerning liability for damage to the consumer which set out, even on a cursory reading, detailed and precise rules. It does so, despite the fact that the provision does not clarify whether the 'damage resulting 23. Nevertheless, it is true that the issue for the consumer from the failure to which must be raised, in order to answer perform or improper performance of the the question referred by the national court, [package] contract', referred to in the first is precisely that of defining the effective paragraph of Article 5(2), encompasses

25. To this end, I note that, according to the well-known case-law of the Court, 'the need for uniform application of Commu- nity law and the principle of equality require that the terms of a provision of Community law which makes no express reference to the law of the Member States for the purpose of determining its meaning The concept of damage in Directive 90/314 and scope must normally be given an autonomous and uniform interpretation throughout the Community' 10, having regard to the context of the provision and of the intended aim of the act contained therein. Thus, in such cases, any recourse to 27. That said, it seems to me that numer- individual national laws is precluded ous arguments of a textual and systematic because 'the Community legal order does nature tend towards a broad interpretation not, in principle, aim to define concepts on of the concept in question and thus a the basis of one or more national legal

11 — See Case C-296/95 EMU Tabac et al. [1998] ECR 1651, 10 — See Cases C-357/98 Yiadom [2000] ECR I-9265, para- paragraph 30; but also see Cases C-64/81 Corman [1982] graph 26; C-287/98 Unster [2000] ECR I-6917, paragraph ECR 13, paragraph 8 and T-41/89 Schwedler v Parliament 43; C-327/82 Ekro [19841 ECR 107, paragraph 11; also, [1990] ECR II-79, paragraph 27. with specific reference to the area of private law, C-373/97 12 — On this interpretation, see the opinion of Advocate Diamantis [2000] ECR I-1705, paragraph 34; C-441/93 General Saggio in Case C-140/97 Rechberger et al. [1999] Pafatis [1996] ECR I-1347, paragraphs 68 to 70. ECR I-34997 paragraph 17.

positive answer to the question referred by reference it must be concluded that the the Landesgericht. concept of damage, as referred to by the Directive, includes both material and non- material damage. Thus, albeit with the caution required in a matter which, even at the terminological level, is marked by a notable inconsistency between — and even within — different legal authorities, 13 I think one can say, along with the Commis- 28. Starting from a literal analysis of the sion, that 'material damage' is damage to Directive, I note immediately that both the the person, in other words both physical text and the preamble repeatedly employ and psychological damage, in the sense of the term 'damage' in a general sense, whilst the psychological distress suffered as a the fourth paragraph of Article 5(2) alone result of physical damage (pretium doloris, refers specifically to a provision for a Schmerzengeld). Thus, this concept covers certain category of damage 'other than the idea of compensation for non-material personal injury'. damage. However, there are more convinc- ing grounds for claiming that that idea is covered by the concept of 'damage other than personal injury', to which the Direc- tive also refers, but not in a restrictive sense, so that it includes all damage, whether material or non-material. It fol- 29. In view of the fact that the Directive lows, as the Commission observes, that, employs the term 'damage' in a general particularly in the latter case, the Directive sense without any restrictive connotation, it does not preclude the non-material aspect must be inferred — and on this point I find of damage, as confirmed by the fact it was myself in agreement with the observations intended to leave that concept open. It is of the Commission and the Belgian Govern- not clear therefore why, in cases concerning ment — that the concept should be inter- the loss of enjoyment of holidays, com- preted widely, that is to say in favour of the pensation for non -material damage should argument that, at least in principle, the be precluded or limited to specific circum- scope of the Directive was intended to stances (pretium doloris), given that in cover all types of damage which have any causal link with the non-performance or improper performance of the contract.

31. In that respect, it appears significant to me that the Ddirective should provide different rules for the two categories of damage mentioned solely in respect of 33. In concluding this point and to restate compensation. However, for damage in an observation made during the case, I general, Member States may, pursuant to should like to add that against the argu- Article 5(2), limit compensation only in ment in favour of compensation for non- accordance with the international conven- material damage it cannot be contended tions governing such services (third para- that this would leave an excessively broad graph), in respect of damage other than margin of uncertainty, since theDdirective material damage. Contractual damages sanctions the principle of compensation for may also be limited, provided that such such damage without specifying any other limitation is not unreasonable (fourth para- necessary conditions, particularly — and graph) having regard, as the Belgian Gov- notwithstanding the aforementioned com- ernment points out, to the subjective nature ments — as regards indemnification. Such of non-material damage which is difficult an argument goes too far because the to quantify, and thus to the possibility of Directive does not even provide such details allowing compensation within reasonable vis-à-vis material damage, in respect of limits. which compensation is not in doubt. Fur- thermore, I note that as regards liability, apart from certain fundamental rules, the criteria governing the definition of damage and the relevant systems for assessing and quantifying damage vary immensely from Member State to Member State ranging, as a rule, from the complete discretion of the court to the point where the criteria to be applied are compulsorily laid down in 32. This provision, in my opinion, provides calculation tables. For this reason also, a valid argument in support of the idea that there is a demand for the Community to the concept of damage enshrined in the intervene in this field in response to the Directive is far-reaching and includes non- discrepancies, if not the flagrant inequal- material damage. Indeed, paragraph four, ities, resulting from what has been referred Article 5(2) of the Directive, in establishing to as real 'assessment chaos'. 14 the abovementioned limitation, at the same time implicitly acknowledges the existence of the right to compensation for damage 14 — According to G. Alpa, op. and loc. cit. For the need to other than material damage. Compensation which I refer in the text, also see the Commission communication cited in the previous footnote, particularly may be limited, in part and within reason, Chapter 3.

Comparison with Directive 85/374 Directive 90/314 governs the contractual liability for damage of the organiser and/or retailer of package tours. The basic prin- ciples and rules are therefore different, just as there is a major difference in their wording: Directive 85/374 is concerned with providing a precise definition of all the categories of damage to be compen- sated, whether to persons or to objects, with explicit reference to national law as regards non-material damage; 16 Directive 90/314, on the other hand, avoids any 34. The preceding considerations do not specific categorisation and employs the seem to me to be refuted by the argument concept of damage in a general and undif- against them adopted by the Austrian and ferentiated manner. French Governments on the basis of Article 9 of Directive 85/374 concerning liability for damage caused by a defective product, which explicitly leaves the Member States free to regulate the aspects of civil liability connected with non-ma- terial damage caused by defective prod- ucts. 15 It seems to me rather that the argument in fact turns on the loss suffered by those who rely on it. There is certainly no disputing the fact that Directive 85/374 35. Thus, the different wording chosen for leaves to the Member States the power to each of the two directives is anything but which I have referred. However, that in no accidental. Indeed, it is clear that where the way means that the Directive in the present Community legislature wished to draw a case allows the Member States the same distinction, as in Directive 85/374, between freedom. In that respect, I merely note that damages for which the producer is to be the two Directives were not only adopted at held liable and those which are to be different times and at different stages in regulated by the Member States, has done relation to the evolving concept of liability, so explicitly. On the other hand, where, in but that they also regulate different types of the subsequent Directive 90/314, has liability: Directive 85/374 regulates the decided to refer in a general and non- non-contractual and objective liability (al- specific manner to the concept of 'damage', beit restricted) of the producer, whilst it is to be inferred that it has done so in order to include within that concept all possible types of damage connected with 15 — After Article 1 of the Directive, which states 'the producer the non-performance of contractual obli- shall be liable for damage caused by a defect in his product', Article 9 states that 'damage' means: gations, that is to say the inference must be (a) damage caused by death or by personal injuries, (b) damage to, or destruction of, any item of property drawn that the adoption of a broad and other than the defective product itself, with a lower threshold of ECU 500, provided that the item of all-encompassing concept of damage was property: intentional. (i) is or a type ordinarily intended for private use or consumption, and (ii) was used by the injured person mainly for his own private use or consumption. This Article shall be without prejudice to national 16 — On that point, see Case C-203/99 Henning Veedfald provisions relating to non-material damage'. [2001] ECR I-3569, paragraph 32.

Further arguments in support of compen- sation for non-material damage 39. As regards indications provided by international treaties, I note that, although they are mainly concerned with issues related to transport or material objects and thus are not of direct relevance for the purpose of compensation for damage 37. This conclusion is also, in my opinion, arising out of a ruined holiday, the Warsaw directly or indirectly corroborated by other Convention of 1929 on International Car- arguments: notably, by the Community's riage by Air, 18 the Berne Convention of own case-law, by certain relevant inter- 1961 on Carriage by Rail, the Athens national conventions on the subject, and by Convention of 1974 on Carriage by Sea current developments in the legislation and and the Paris Convention of 1962 on the case-law of the Member States. Liability of Hotel-keepers for items brought by clients into hotels — all referred to in the eighteenth recital of Directive 90/314 — refer to a general concept of damage and therefore do not preclude non-material damage. Further, of even more specific interest is the International

38. As regards Community case-law, I must point out that, albeit in respect of 17 — See, in particular, Cases T-230/94 Farrugia v Commìsion [1996] ECR II-195, paragraph 46; T-230/95 BAI v the Community's non-contractual liability, Commission [1999] ECR II-123, paragraph 38, and clear positions have been adopted in favour T-13/96 TEAM v Commission [1998] ECR II-4073, paragraph 77. of extending the concept of damage to 18 — This convention has been adapted by the Convention for include non-material damage. On several the Unification of Certain Rules for International Carriage by Air (Montreal Convention) of 28 May 1999, signed By occasions, in fact, the Court of First the European Community on 9 December 1999 and approved by Council Decision of 5 April 2001, OJ L 194, Instance has recognised that such liability p. 38.

41. Among the former, I make particular reference to Germany where, since 1979, a specific amendment to the Civil Code (paragraph 651 f, Abs 2, BGB) has con- ferred on the tourist, in the event of a cancelled or seriously disrupted holiday, the right to claim adequate compensation for the period of holiday time wasted. The case-law has, in turn, refined and progress- ively defined the concept of damage for a 40. In my opinion, however, the most 'ruined holiday' by specifying a series of interesting developments are those pro- indicators for that purpose (distance from vided by the legislation and case-law of the sea, quality of the food, noise, lack of the Member States which, notwithstanding balconies and windows, etc.) Belgium, 20 the abovementioned range of solutions, Spain 21 and the Netherlands 22 also now have not only generally extended the possi- have regulations which make provision for bilities of compensation for non-material compensation for non-material damage. damage, but more specifically have focused increasing attention in recent years on compensation for 'damage arising out of a ruined holiday', in the sense of non-ma- terial damage suffered by a tourist through not being able to derive full enjoyment, as the result of the tour operator's non-per- formance of the contract, from the benefits of a trip organised for the purpose of leisure 42. As regards the other group of Member and relaxation. Without embarking upon a States, I must obviously mention first of all comparative analysis of the matter, which the United Kingdom, whose case-law is the Commission in any event has done in known to be the most open (although not very general terms, I merely note that, as open as that of the United States) on the taking at least in part the results of that

subject of compensation for non-material 43. At the end of this brief excursus, it damage. 23 The position in Ireland is not seems therefore that I can confirm my dissimilar, but one also sees a similar earlier comments about the existence of a development in Member States whose case- widespread trend, which has made varied law is based on the civil law tradition. progress in the different legal systems, Thus, in France, although damage arising towards a wider concept of liability for out of a ruined holiday is not expressly this type of damage and, more specifically, covered by regulatory provision, its case- for damage arising out of a ruined holiday. law openly allows for compensation for This trend is linked to the overall develop- such damage. 24 Such is also the case in ment of the subject of liability, but also, Italy, where the question is governed by the from a more general point of view, to the circumstance that the Civil Code limits rapid development of tourism and to the compensation for non-material damage to fact that holidays, travel and leisure breaks civil consequences of criminal act, save for are no longer the privilege of a limited exceptional cases provided for by the law, sector of society, but are a consumer but despite that there are an increasing product for a growing number of people number of judgments that allow compen- to which they devote part of their savings sation for damage arising out of a ruined and their holidays from work or school. holiday. 25 The very fact that holidays have assumed a specific socio-economic role and have become so important for an individual's quality of life, means that their full and effective enjoyment represents in itself an asset worth protecting.

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failure to enjoy it amounts to, in the law on the matter from which there is no context of a package contract, a specific reason to depart in this case. 26 Indeed, I loss which justifies compensation. From note that, as the Court confirmed in the this point of view, an interpretation which judgment referred to by the Landesgericht precludes indemnification of such damage itself, 'when applying domestic law, from the scope of the directive, besides whether adopted before or after the Direc- having no basis in either the text or the tive, the national court that has to interpret objectives of Directive 90/314, could that law must do so, as far as possible, in deprive the directive of part of its effective- the light of the wording and the purpose of ness and conflict with the stated intent of the Directive so as to achieve the result it Article 95(3) EC, which requires that, as has in view and thereby comply with the we have seen, harmonisation measures for third paragraph of Article 189 of the the protection of consumers be based on a Treaty'. 2 7 Accordingly, if the Court shares high level of protection. the views that I have set out above, it must conclude that, regardless of the fact that the applicants may invoke the direct effect of the directive, the national court is obliged to interpret Austrian law in the light of the letter and scope of the directive itself and is therefore obliged to recognise the con- sumer's right (provided the other con- ditions apply) to compensation for non- 45. I therefore consider that the reply to the material damage caused by the non-per- Austrian Court should be that Article 5 of formance or improper performance of a Directive 90/314 is to be interpreted as package contract on the part of the orga- meaning that the organiser and/or retailer niser and/or retailer. must be regarded as liable also for non- material damage caused to the consumer by the non-performance or improper perform- ance of a package contract.

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