In the first instance it is prudent to ensure that insurance cover is in place for the property and liability risks concerned be it a major event to which members of the public are invited, a small event at a hired venue or guests staying at a hotel. In the event that a claim to insurers arising for damage caused is made it is probable that insurance cover will only cover the costs above the amount of the policy excess. That amount will vary depending upon a variety of factors including the nature of the business, the risks in question, claims history etc and could be quite substantial.

In respect of owners of hotels and guesthouses it is essential that that they protect their ability to be able to pursue a claim for property damage against guests by putting them on contractual notice of the nature and extent of their potential liability before or at the time of them making a booking, either individually or for a group. The same principle applies if you are hiring out premises for the purposes of an event being held there. By providing such notice in the contractual terms of the agreement under which rooms are hired the parties should be clear of their obligations in the event of damage arising. This may be best achieved by ensuring clear notice is given in the standard terms and conditions before or at the time of booking visible online and/or sent by email. By way of an example the wording of terms and conditions for a hotel or guest house may include the follows provisions:

Liability
The liability for guests for their account is not waived and guests agree to be held personally liable for any charges incurred during their stay. In the event of a booking for more than one room (a group booking) the lead or registered guest (the lead guest) providing credit/debit card details is personally liable for any person, group, company or association that fails to pay all or part of such charges.

Damage to hotel property
We reserve the right to charge individual guests or lead guests for the cost of rectifying damage which has been caused by the deliberate, negligent or reckless acts of guests to the hotel’s property or structure. If such damage is discovered during the stay it will be drawn to the guest’s attention but if discovered after guests have departed then we reserve the right to make a charge to the guest’s credit / debit card, or send an invoice for the costs for payment to the registered address. We will however make every effort to rectify any damage internally prior to contracting specialists to make the repairs, and therefore will make every effort to keep any costs that guests would incur to a minimum. So do ensure credit card details are taken and notice is provided that if a group is booking the lead guest accepts liability on behalf of the whole group for loss or damage.

In the event of substantial damage occurring then to minimise the risk of disputes arising later, take (dated) photos before any cleaning, clearing or repairs are carried out. If the guests have left before damage is discovered then try to call them to put them on notice of the issues and action/costs to rectify. If they do not dispute the damage record the fact in an email. If this is disputed then email them photos and put them on notice of ongoing costs such as of not being able to let a room. Businesses have a legal duty to mitigate against the amount of (non-trivial) losses to give those responsible an opportunity to respond to the claim before action is taken to rectify damage. Such efforts are likely to be looked upon favourably by the courts rather than large sums being incurred in rectification without prior warning.

If for any reason payment is not forthcoming one can claim the costs through the County Court’s small claims procedure if under £10,000. However if considering engaging solicitors to act for you do bear in mind that save in exceptional circumstances no solicitors costs will be recoverable if liability is established, just the amount of the court fees. As mentioned above contemporaneous photos will be viewed as good evidence if the nature and extent of damage is disputed in court.

Further, if the damage was malicious or reckless then this could amount to criminal damage and the Police can be involved. The Police should inspect the damage and then decide if it merits taking formal action against the guests or if the issue of warnings is more appropriate.

Owners of event venues damaged by a member of the public should ensure they provide in the contractual agreement for indemnity to be given by the hiree for any damage sustained. The onus is then on the hiree to pursue the culpable member of the public themselves. Alternatively, the owners of the venue could make a claim under their own insurance policy for the cost of repairs, but if it is a substantial sum it may have an adverse effect on future premiums.

This note is only intended as a brief summary of the main issues and for specific advice please contact:

Alan Davies Partner Pitmans LLP T: 0118 957 0300 E: adavies@pitmans.com