Government to close legal loophole after it was highlighted by ABTA and its Members
Holiday sickness fraudsters were dealt a blow last month when the government gave the go-ahead to new rules to bring pay-outs under control, after ABTA’s Stop Sickness Scams campaign and its Members highlighted the issue.
The new rules will limit the legal costs that can be claimed for package holiday sickness claims, closing a loophole which the travel industry believes has helped fuel a rising number of claims. They will come into effect in the coming weeks, ensuring the curbs will be in place before the summer season.
Up to now, legal costs in overseas package travel claims have not been controlled, which has meant that costs for tour operators can spiral out of all proportion to the damages claimed. This had led many operators to settle holiday sickness claims out of court, rather than challenge them. Industry experts believe this has been a major factor in a rise in claims, which has sparked concerns that Britain’s reputation overseas is being damaged and that British tourists will face higher package holiday prices.
ABTA Chief Executive Mark Tanzer said: “False sickness claims have been costing the travel industry tens of millions of pounds and damaging British tourists’ reputation abroad.
“Since 2013, legal fees for personal injury claims which occurred in the UK have been capped, which is why in partnership with claims management companies, firms of solicitors have been targeting customers who have taken an overseas all-inclusive package holiday. This has contributed to a 500 per cent increase in sickness claims at a time when actual incidents reported by customers in resort have either remained stable or declined.
“We are pleased that the Ministry of Justice has responded to the concerns and evidence raised by ABTA and our members, by taking firm action on this issue. Closing the legal loophole before the summer should lead to a reduction in the number of false claims. We encourage the Government to keep this matter under review and continue to pursue
a ban on cold calling by claims management companies in relation to sickness claims.”
Justice Minister Rory Stewart said: “Claiming compensation for being sick on holiday, when you haven’t been, is fraud. This damages the industry and risks driving up costs for holidaymakers. 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.”