Payment of damages to guests - are hoteliers' liable?

A rare decision has recently been reported relating to damages payable by hoteliers pursuant to Section 2(3) of the Hotel Proprietors’ Act 1956 (“the Act”). The Act imposes a duty on hotel proprietors to make good the loss of a guest’s property unless they can prove the loss was incurred as a result of the guest’s own negligence.

Under the Act hotel proprietors may limit which is otherwise strict liability for the loss of a guest’s property by displaying a sign in a prominent place confirming the extent of their duty. If that is done, then damages are a fixed sum. However, the limitation on liability does not apply where the loss is due to the hotelier’s negligence or that of its employees. This question arose recently in the case of Anande v Firoka (King’s Cross) Ltd [2018] EWHC 3679 (QB).

The facts

On 18 November 2015 Mrs Anade checked into the Holiday Inn King’s Cross (as it was then). She had with her a substantial quantity of jewellery and other property which she arranged to place in the room safe. Whilst she was at dinner, her room was burgled and the safe ripped from its fixings in the wardrobe. Her property was not recovered.

Prior to leaving her room, Mrs Anade had complained to the hotelier that her door had not been locking properly but when inspected by one of the hotelier’s employees she was told that she needed to pull it firmly shut. When she left for dinner therefore she was careful to check that it was securely locked.

Following the burglary, the electronic door locking system was further inspected and was apparently found to be working with no record of the door having been unlocked prior to Mrs Anade’s return to the room.

Mrs Anade contended that the hotelier had negligently failed to ensure the door locked effectively and having issued proceedings, she sought damages from the hotel in excess of £50,000 for the loss of her property.

The hotelier denied negligence and contended that the room was secured with a “state of the art electronic proximity lock” which was in good working order. It also averred that no-one had entered the room without permission.

Shortly before trial the hotelier disclosed a bundle of documents relating to a series of thefts on 3 October 2015. Four or five separate rooms had been entered and property stolen in circumstances where there was no signed of forced entry and where the door locks were found to be in good working order and the electronic records did not show any entry to the rooms.

Despite this disclosure and the court finding that the burglary had occurred because of the problems with the lock, of which the hotelier had notice, at first instance the court found that Mrs Anade was only entitled to fixed damages pursuant to the Act in the sum of £1,500. Accordingly, she was ordered to pay the hotel’s costs of the proceedings. Mrs Anade appealed.

The appeal

The grounds of the appeal were limited to the hotelier’s door locks. By this time, the hotelier had provided further documents relating to news reports from 2012 and 2013 concerning the vulnerability of the locks made by Onity which revealed a significant problem relating to hacking allowing criminals to enter hotel rooms with such locks. The report showed that the problem had been reported in both the UK and USA and suggested that in May 2013 more than nine months after Onity had announced a fix to the problem, the lock hacking technique continued to thrive. It was necessary for Mrs Anade to seek permission to admit this further evidence. The court duly granted her application and then gave consideration to the appeal itself.

In doing so, the court found that at first instance the recorder had relied on the fact that the locking system was widely used and well regarded within the hotel industry when finding that the hotelier could rely upon the limitation as set out in the Act. However, the appeal court disagreed. It said that once the hotelier had identified that rooms had been unlawfully entered by breaching the electronic lock it was incumbent on it to do something about that. The court found that the hotelier could not simply continue to rely on locks which it knew could be breached. In the event it was not satisfied that the cause of the breach had been identified and resolved it would have changed the locks or taken some other measures to secure the rooms. At the very least they ought to have warned guests about the known breaches. The hotelier, said the court, could not continue to rely upon the locks simply because the system was reputable and widely used.

In the circumstances, the court found that Mrs Anade had established negligence on the part of the hotelier. Guests at a prestigious central London hotel were reasonably entitled to believe that the doors to their rooms would be secure. By failing to adequately respond to the October thefts the hotelier was in breach of its duty. The court also found that the latest disclosure only served to strengthen Mrs Anade’s position. Her loss was caused by the hotelier’s negligence and accordingly, her claim would be allowed in full.

Conclusion

This case demonstrates the importance of ensuring that issues of security are taken seriously by hoteliers. As the court found in this case simply relying on the fact that something is widely used and well regarded is unlikely to be sufficient to allow hoteliers to rely upon the limitation provisions of the Act. The position may have been different if the hotelier had at least notified Mrs Anade of the potential security issues or taken steps to have the locks changed.