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Court sets rules for holiday disaster damages

27 April 2010

Damages awarded by the courts for ruined holidays must be consistent with awards in other fields such as personal injury, the Court of Appeal has unanimously ruled.

In a ruling which could have an impact on claims brought in the wake of the volcanic ash cloud fiasco, Lord Justice Ward said that distress in holiday cases “does not equate with bereavement”.

He went on: “Physical inconvenience and discomfort is necessarily ephemeral. Disappointment, distress, annoyance and frustration are likewise the feelings one experiences at the time and which last painfully for some time thereafter.

“But one is not disabled, the psyche is not injured and one gets on with life. Every time one thinks back, one relives the horror but the reliving of it is transitory.”

Ward LJ was giving the leading judgment in Milner and Milner v Carnival plc (trading as Cunard) [2010] EWCA Civ 389.

Terence and Cynthia Milner, both retired, paid £60,000 for a three-month round-the-world cruise with Cunard, the maiden world cruise of the liner Queen Victoria.

Ward LJ said their expectations were “sky high” and Cynthia Milner had gone to great trouble to choose a wardrobe of 21 formal gowns at a cost of £4,300 for the regular formal dinners onboard.

The judge accepted that banging noises in the couple’s Princess Suite during bad weather had ruined their “holiday of a lifetime” and Mrs Milner was too upset ever to go on a cruise again.

The couple left the cruise after only a month at Honolulu, where they spent six weeks before joining another cruise ship, the Queen Elizabeth, for a return journey to Southampton at their own expense.

Cunard offered the Milners a refund of £48,300, which they accepted, leaving the net cost of their holiday as £10,800.

Ward LJ said the couple claimed over £76,000, including £8,500 for diminution in value, £50,000 for distress and disappointment, £4,300 for the wasted expenditure on dresses and £13,440 for the cost of the return voyage.

They were awarded £22,000 in damages by the High Court, including £5,000 for diminution in value, £15,000 for distress and disappointment and £2,000 for Mrs Milner’s unused gowns.

Lord Justice Ward said it was not enough to rely on awards given in holiday cases, and the “search for comparability” must extend to damages awarded in other fields.

“The obvious comparison to make is the assessment of general damages in personal injury cases and the awards when psychiatric injury has been suffered.”

Ward LJ said it was “excessive and disproportionate” of the judge at first instance to award £22,000 for diminution in value.

He said the judge was wrong to use the full cost of the holiday as the benchmark of damages instead of the amount actually paid after the refund.

Ward LJ also said the judge “may also have slipped into error by deciding damages on that basis before he made the further important finding that the major part of the cruise was not enjoyed because the Milners voluntarily abandoned ship in Hawaii”.

He allowed Cunard’s appeal and awarded Mrs Milner £4,500 for distress and inconvenience and Mr Milner £4,000.

“Adding in the £3,500 for the diminution in value and looking at the matter in the round, I am satisfied that a total award of £12,000 is fair and just compensation for the failure of Cunard to meet their guests’ legitimate expectations.”

Lord Justices Richards and Goldring agreed.

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