Just Costs’ Holiday Sickness Team is instructed by a large number of clients who bring claims against all of the major Tour Operators.
We have today received word from representatives of Thomas Cook that:
“We write to advise that we hereby withdraw all offers of settlement made in respect of your clients’ claims with immediate effect.
Due to the prevalence of fraudulent claims for gastric illness, we are currently undertaking a detailed review of all claims brought against us, and where fraud is suspected we will take appropriate action.
All previous offers made are hereby withdrawn until further notice”
It appears that the Defendants have had enough and are seeking to rely on the ruling in the case of Hayward v Zurich, where a precedent was set which could see personal injury settlements successfully challenged if evidence comes to light suggesting the claimant had lied or misrepresented themselves in the process of securing their settlement.
In that case, the Claimant was found to have misrepresented his symptoms following an injury at work, which resulted in an award in damages of £135,000.00. Following investigations, the Defendant claimed that the injury sustained had been “grossly and dishonestly exaggerated”. Initially, the Court of Appeal upheld that the agreement reached was not to be overturned. The matter was then heard before the Supreme Court.
The result? The Claimant’s award was reduced to £14,720.00. And it could have been worse; if the matter had been subject to the Criminal Justice and Courts Act 2015 (s.57), the entire claim would have been dismissed and the Claimant would have lost his protection under QOCS.
The potential effect of this on holiday sickness claims is, as yet, unknown. Given that Thomas Cook are taking such drastic steps it would seem that they are serious in trying to unravel a number of what they consider are fraudulent claims. At this stage it is not clear what evidence they seek to rely upon or how many claims these “investigations” will be carried out on (they state that all claims will be investigated so this will undoubtedly run into the thousands), but it is certainly going to have an impact on the number of settlements achieved without the need for Provisional Assessment.
Going forward - and based on Thomas Cook’s statement - we envisage having to commence proceedings on a huge percentage of claims due to the Defendant’s refusal to enter into settlement discussions.
This in turn will bring about additional work, all of which will be properly recoverable as part of the assessment costs.
Relying upon the decision in the case of Siegel v Pummell, the Claimant will seek to obtain an assessment of these costs on the Indemnity Basis due to the Defendant’s conduct and allegations of fraud. Siegel serves as a reminder to parties to proceed with caution and act reasonably throughout the litigation process.
In conclusion, it is vital that Claimants are aware of the consequences of bringing exaggerated claims. Even if their claims have settled and costs agreed, the decision in Hayward does not prevent the Defendant from introducing evidence in support of fraud allegations. Given that QOCS protection does not apply in cases where fundamental dishonesty is proven, the potential adverse exposure should be a stark warning to anyone considering a fraudulent or exaggerated claim.
Written by Simon Sharpe - Costs Draftsman
The purpose of this blog is to provide information and discussion. Nothing on this blog should be relied upon as a substitute for advice from a qualified Solicitor regarding any actual legal issue or dispute. Nothing on this website should be construed as legal advice or perceived as creating a solicitor – client relationship. Just Costs Limited can accept no liability in contract or tort to any person, firm or company that relies on or makes use of the above, or any part thereof.