By Lauren Howells.
New rules which will fix the legal costs that can be claimed in package holiday sickness claims, will come into force in time for the summer holidays.
The move comes in a bid to tackle the “claims epidemic” surrounding holiday sickness cases, which the travel industry fears will ultimately raise the prospect of higher travel costs for British holidaymakers.
Sharp increase in holiday sickness claims
According to the Association of British Travel Agents (ABTA), there has been a 500% increase in claims from around 5,000 in 2013 to around 35,000 in 2016, despite the fact that data shows that over the last few years, reported incidence of illness in resorts has decreased.
As it stands at the moment, legal costs for tour operators can “spiral out of all proportion” compared to the damages that are being claimed. It has been said that this has led to a large number of operators opting not to challenge holiday sickness claims and to instead settle out of court.
Experts believe that this “loophole” has been a “major factor” in the steep increase in claims.
New measures introduced
The government had asked the Civil Procedure Rule Committee to consider bringing package holiday claims within a regime which would mean that tour operators would pay prescribed costs and could, therefore, better predict defence costs. The committee has agreed to this change and the government has said that the rules will come into effect in the next few weeks.
It is hoped that this will assist tour operators in challenging fake claims.
Justice Minister Rory Stewart reminded consumers that claiming compensation for being sick on holiday when this had not happened, was fraud.
Mr Stewart emphasised that this practice not only damaged the travel industry but also risked tourists facing increased costs.
“This behaviour also tarnishes the reputation of British people abroad. That is why we are introducing measures to crack down on those who engage in this dishonest practice,” he added.
The government said that the “uncontrolled costs” had also emboldened claims management companies, which reportedly have tours operating in European resorts, to “encourage” holidaymakers to pursue compensation for holiday sickness.
Claims management companies “targeting” holidaymakers
ABTA welcomed the news but said that the cap on legal fees for personal injury claims in 2013 had resulted in firms of solicitors, in partnership with claims management companies, “targeting” those who had taken overseas all-inclusive package holidays.
“This has contributed to a 500% increase in sickness claims at a time when actual incidents reported by customers in a resort have either remained stable or declined,” said ABTA Chief Executive Mark Tanzer.
“Closing the legal loophole before the summer should lead to a reduction in the number of false claims”.
Mr Tanzer also encouraged the government to continue to pursue a ban on cold calling by claims management companies with regards to sickness claims.
Earlier this year, a study of Ofcom data revealed that consumers had been bombarded with a total of 2.2 billion nuisance calls relating to an injury-related claim, pension, PPI or other insurance-related matters, in 2017 alone.