Hospitality and Construction – Two Candidates for Legal Harmonization

In: Hospitality & Construction Disputes Post-Covid
Matthias Lehmann
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Helmut Ofner
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Legal harmonization projects often tackle big issues – the law governing insolvency, marriages, or the recognition and enforcement of judgments in civil and commercial matters illustrate the point. With hindsight, the more limited and pinpointed projects are often more successful, however. The prime illustration of this phenomenon is, of course, the Hague Convention on Child Abduction, which succeeded in changing state practice in large parts of the world on a very specific but crucial issue forever. There are scores of other examples as well, ranging from the Geneva Conventions on bills of exchange and cheques to the Hague Service Convention or the Cape Town Convention on Mobile Equipment. It seems the more limited the issue is, the easier it is for states to find consensus on its international regulation, provided an evident need for action can be demonstrated.

Hospitality and construction may just be two such issues which lend themselves to international harmonization. They are comparatively limited in the sense that they represent only a particular sector of the economy. But they are the source of specific cross-border problems which may well deserve the attention of international lawmakers. By deciding to act in these fields, the impact they will be making is likely to outsize the necessary effort.

In the case of hospitality, the promised benefits are relatively easy to demonstrate. Staying in short-term accommodation is a common experience, and frequently so in a transnational context. If problems arise, this will often be the first time for a citizen to get into contact with a foreign legal system, facing a dazzling multitude of issues, from the identification of the applicable law to the exploration of its content, to the determination of the competent tribunal and the enforcement of the judgment it has rendered. In addition, the information on the legal issues is mostly distributed asymmetrically, with airlines, hotel chains, booking platforms and travel agents as repeat players knowing perfectly their game, against the guest as an ignorant novice. The amount in dispute, though certainly important from the individual’s perspective, is often not worth hiring a specialized lawyer. A short but precise international legal tool, for instance on security for cost requirements, the enforceability of settlements or an information database, might be a game changer.

In the case of construction, the setting is quite different. The parties involved in cross-border construction cases are typically professionals. They often have sophisticated knowledge and equal bargaining power. The stakes are also much higher than in hospitality. But very specific problems exist that may well be addressed by international law. They concern, for instance, the distribution of tasks in a consortium, the liability of its members as well as the liability of suppliers and contractors, the applicable health and safety standards, or the length of the statute of limitations. While these issues are so far exclusively dominated by national law, uniform conflicts rules may provide some tangible benefits for the global construction market.

One may think the link made here between hospitality and construction to be fortuitous. However, what binds them together, besides the obvious point that hospitality requires accommodation that needs to be constructed, is that both the hospitality and the construction industries have faced particular challenges during the covid-19 pandemic. Lockdowns have negatively affected the activity in both sectors, often leading to complete and long closures and standstills. The different national vaccination certificates and the different virus test standards have made production more costly and created bureaucratic obstacles for a swift rebound. Some degree of harmonization will be instrumental in managing the next pandemic in a better way.

Whether the abundant legal diversity is to be handled or steps towards uniform law are to be made, well-trained lawyers in the particular area are needed. Despite their economic heft, specialization in the fields of hospitality and construction law is relatively rare. More targeted education is necessary. The University of Vienna has taken a step in this direction by creating a new Master of Laws program dedicated to “Tourism and Law” (Tourismus und Recht). It provides, inter alia, an introduction to conflict-of-laws and conflict-of-jurisdiction issues, as well as general government regulations and specific travel and hospitality rules on a national and international basis. The communication of these complex legal and economic issues is essential for the tourism industry and the persons entrusted with management and law enforcement. According to the broad field of the tourism industry the range of content taught in the Master of Laws program ranges from hotel and hospitality law, travel and aviation law to tax and fee law. In addition, the courses also cover the relevant aspects from real estate law and general tort law to business management and tourism marketing.

But specialization also requires research. Excellent examples are provided in this book. It is to be hoped they will help to raise the awareness of the specific issues of these two important sectors.

Matthias Lehmann and Helmut Ofner

Vienna, 6 May 2022

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