Case Studies
Cryptosporidium - Economic Loss Claim for Hotel: Virtual Client Case
Below is a virtual case relating to the cryptosporidium outbreak in Galway that we are currently undertaking at Malcomson Law. This is not a real case and no real names are used in this article as we believe it will breach our client's confidentiality.
Background Information
Name: Georgina
Age: 50
Sex: Female
Occupation: Hotel Proprietor
Legal Issue: Outbreak of cryptosporidium resulting in economic loss in her company
Georgina's Story
Georgina, who is extremely experienced in the hotel industry, owns and operates a prominent hotel in Galway City. She has been fortunate in that, in the past 3 years, her hotel has been fully booked at weekends for various functions such as weddings, birthday parties etc...
In addition, her hotel possesses an Egon Ronay award for its restaurant and it is frequently by many tourists to the Galway region to the extent that it was necessary to pre-book some 14 days in advance.
The hotel is famous for its Spa and Leisure facilities, which are generally extremely busy during the peak season.
As a consequence of the exceptional range of facilities, the friendly nature of the hotel and it's reputation, the 200 bedrooms have a 95% occupancy rate in peak season.
As business was so buoyant, Georgina decided to embark upon a major capital investment programme and an additional wing of bedrooms has been constructed attached to the hotel, with the intention that these bedrooms will be available for the forthcoming season. Georgina, based upon realistic projections, anticipated that there would be a 70% occupancy rate in relation to this new wing.
Tragically, at the most vulnerable time in terms of economic development for her hotel, the cryptosporidiosis outbreak hit Galway. As a consequence, in the past three weeks, Georgina has had the worst financial returns for hotel business since she acquired the hotel in 2002. The diminished financial returns are against a background of increased financial borrowings and she is very concerned about the viability of her business. The hotel bookings for her accommodation are 30% of normal for the original hotel complex. In addition, the new wing, which was heavily financed, has received no bookings for the forthcoming season.
As a result of the risk of cryptosporidiosis and the fears associated with that particular parasite, Georgina has been obliged to close the Spa and Leisure facilities.
If matters were not bad enough, Georgina has noted that her renowned restaurant is now only undertaking 40% of it's normal business.
Georgina, when she views her management accounts, notices that her hotel business is currently sustaining losses of € 150,000 and she is very concerned about the very future viability of her hotel business. Her bank is equally concerned about her ability to meet her new financial obligations in the light of the change in her financial circumstances.
Georgina has incurred additional expenditure in terms of provision of complimentary bottled water for hotel guests. In addition, in order to comply with the Local Authority Boil Water notice, Georgina has employed additional staff to work at night to boil the water. Georgina is becoming more anxious as each day passes and she believes that she may be facing economic ruin, if the financial losses continue to accrue.
Legal Advice
Georgina consulted her business acquaintances, who indicated to her that she should obtain legal advice. To date, Georgina has worked closely with the local tourism board and the Local Authority for the purposes of attracting tourists to the Galway region. She is extremely reticent to embark upon the legal route. Yet, she heeds the advice of her business acquaintances and attends her solicitor at Malcomson Law, who indicate to her that she should consider the prospect of instituting legal proceedings.
The circumstances surrounding the outbreak of cryptosporidiosis were explained to Georgina by her legal advisers at Malcomson Law, which suggest that there may be a statable cause of action against the Local Authority and the Minister for the Environment under the following headings:
- Breach of duty of care culminating in negligence by the Local Authority and/or the Minister for the Environment in respect of Georgina's losses
- Breach of statutory duty under Section 20 of the Local Government (Water Pollution) Act, 1990
- Breach of European Regulations under Section 4 (1) of the European Communities (Drinking Water) Regulations
- The failure of the Local Authorities and/or the Minister for the Environment to comply with European Court of Justice Rulings relating to breach of e. Coli standards.
Georgina, having obtained the requisite advice, considers that it is appropriate for her solicitors to issue various letters of claim against the various potential defendants, including Galway City Council, Galway County Council, the Minister for the Environment, Ireland and the Attorney General. Georgina believes that she has no alternative but to protect her legal interests in the circumstances where her very financial viability is at risk.
Please note that this article is for information purposes only and does not constitute legal advice.
Seeking Commercial Law Advice
If you believe that you may have a legal claim relating to this story, please contact Malcomson Law by filling out an Online Enquiry Form or by calling 01 8744422. A solicitor who specialises in this area will contact you to advise you of your legal rights and entitlements.
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