Blog - Wednesday 26/07/2017

Fixed Fees in holiday sickness claims

The UK holiday industry has come under the spotlight recently, due to allegedly bogus holiday sickness claims which the holiday companies say could threaten the future of British holidaymakers.

This in turn also impacts lawyers. The government announced earlier this month that there is to be a further shakeup of the fixed costs regime, with it being suggestedthat the government are to extend fixed costs to holiday sickness claims.

The Association of British Travel Agents (ABTA) has launched an unprecedented campaign for fixed costs. They say that the number of holiday illness claims being made is out of control. Their website contains numerous “warnings” given to potential Claimants which seem designed to steer them away from making a claim. They have even launched an MP Lobbying Tool to drive a reform on costs. Stories that some hotels are not accepting any British guests have been ‘leaked’ in a further effort to dissuade Claimants.

The government has suggested that there has been a rise of 500% in compensation claims for holiday sickness since 2013. As is often the case, the media are briefed that a rise in claims is due to a rise in fraud rather than because of any other factor (such as Claimants becoming more aware of their rights; or even increased levels of negligence by Defendants).

The first case in which holidaymakers have been found to be fundamentally dishonest (thus losing QOCS protection) hit the headlines this month. The report of the case does not appear in any of the usual legal resources, so we are reliant on the facts which are presented in newspaper articles.

It appears that the Claimants brought the claim three years after their holiday. They had not reported the sickness to the resort or their rep; and had completed a survey of their holiday on the return flight (which passed without incident, despite one of the Claimants admitting he had drunk six pints of beer before the flight) in glowing terms. The Claimants had returned to work and school on the day after they returned to the UK; and, during a visit to their GP by two of the Claimants within a week of the holiday, no mention was made of their illnesses.

The holiday companies are presenting this case as being totemic of all sickness claims. The truth is that the facts of this case are extreme and atypical of holiday sickness claims. The best evidence for this may be the holiday companies’ own data: of the tens of thousands of claims which the industry says it has faced since 2013, just one has resulted in a finding that the Claimants had acted dishonestly.

The effect of introducing fixed costs on the profitability of running these claims is obvious. But there is little to suggest that it will reduce the number of sickness claims, let alone that it will reduce the instances of fraud. Data in relation to RTA claims shows that in 2011 when the fixed cost RTA Portal was introduced, 630,000 claims were entered onto it. This increased to 796,000 in 2012 and then 883,000 in 2013.

Written by Nadia Zarait - Costs Lawyer

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.