The government is to impose fixed recoverable costs for holiday sickness cases as war is breaking out over letters that a leading holiday operator is sending directly to claimants even if they already have solicitors.
However, Jet2holidays has told Legal Futures that the letters have generated responses from holiday makers unaware that a claim had been made on their behalf.
In the wake of the Association of British Travel Agents (ABTA) launching a campaign for fixed costs, yesterday the Ministry of Justice said it wanted “to reduce cash incentives to bring spurious claims against package holiday tour operators”.
“Advice from the travel industry shows the upsurge of claims in this country – reported by the industry to be as high as 500% since 2013 – is not seen in other European countries, raising suspicions over the scale of bogus claims and damaging our reputation overseas.
“Due to the reported increase in claims, and as many tour operators appear to settle them out of court, the costs to the industry are increasing. This is raising fears of higher package holiday prices for the majority of law-abiding holiday makers.”
As well as asking the Civil Procedure Rule Committee to close the “loophole” in the FRC regime for holiday claims – because the incident takes place abroad – the Ministry of Justice said the Civil Justice Council would be tasked with looking at the “rules around how low-value personal injury claims more generally are handled to reduce the incentives to bring claims lacking merit”.
This is in addition to the reforms in the Civil Liability Bill, which are assumed to carry on those that were in the Prisons & Courts Bill before the election – the detail has yet to be confirmed.
Legal Futures has seen a letter sent last week by Jet2holidays to a holiday maker after it received a letter of claim on her behalf.
It said: “The travel industry has recently seen an unprecedented and sudden rise in gastric illness claims. We believe this is as a direct result of encouragement from ‘touts’ and claims management companies, who then refer the claims to ‘no-win no-fee’ solicitors.
“The welfare and protection of our customers is very important to us and we have a number of concerns regarding these types of ‘claim farming’ practices, including but not limited to:
“I. The claimants are often completely unaware they are being represented and unaware a claim is being pursued on their behalf;
“II. Claims management companies are often unregulated;
“III. Data being transferred to third parties, from claims management companies, without the claimants’ consent;
“IV. Claimants have entered into misrepresented fee arrangements, with little or no explanation of the costs implications for the claimant personally.”
The letter included a ‘gastric illness questionnaire’ for people who wanted to pursue their claim, and also a strong fraud warning.
It said: “If your claim is ultimately found to be dishonest, we put you on notice that we will pursue you personally for our costs of defending the claim together with pressing for a criminal prosecution, including contempt of court proceedings, which can arise where a claimant has submitted a claim that is untrue or exaggerated.”
The letter has been heavily criticised by claimant lawyers. Julie Twist, a former law firm partner who now advises PI practices through Diversify Law, said: “Jet2 advertise that they sell ‘package holidays you can trust’ but is that public and consumer trust not eroded when they breach all protocols and make direct contact with their consumer after they have instructed a law firm?
“ABTA’s code of conduct should include a clause about their conduct with legal professionals which involves an undertaking not to interfere with the natural course of justice. The letter is effectively damaging the professional reputation of the law firms whose clients have received these letters.”
Ms Twist said a host of tour operators also previously sent a “strongly worded warning” to claimant law firms “suggesting that they might be breaching LASPO, that they might be acting without retainers, and that they might be complicit in fraudulent activity”.
Barrister Andrew Mckie, who is heavily involved in holiday sickness claims, said the actions of Jet2 and other tour operators was “very concerning”.
“Good claimant law firms have already warned their clients about potential fraud and its consequences as well as other due diligence checks on these claims, before they are accepted.
“The tactic of writing to claimants directly, many of whom are young families or couples attempting to put them off making a genuine claim and suggesting criminal prosecutions and contempt of court, without specific allegations or evidence in support, is not an acceptable one, and one that ABTA should ask their members to refrain from.”
“The tactics being employed are using a sledge hammer to crack a nut. The vast majority of claims are genuine, some holiday food poisoning cases, involve some very seriously injured people with life changing conditions and thus it cannot be acceptable practice for the holiday industry to try and side step the claimant lawyers, who are instructed to help these clients.”
Brett Dixon, president of the Association of Personal Injury Lawyers, added: “If someone has a genuine claim, and a solicitor is involved, then the injured person should be allowed to proceed with the claim as normal without being subjected to veiled threats.
“If the holiday company is concerned that the claim may not be genuine, the way to deal with it is to investigate, and report concerns to the relevant regulatory authority.”
However, a spokesman for Jet2 told Legal Futures that the “sudden and significant rise” in gastric illness claims were “a result of the activities of unscrupulous touts and claims management companies… We have also seen evidence of law firms bringing claims on behalf of our customers without their authorisation”.
He continued: “The welfare and protection of our customers is at the heart of everything we do and we want customers to know that making dishonest claims is fraud, and can result in severe financial and legal consequences.
“There is nothing that can prevent us from contacting our own customers and our letter ensures that customers know that a gastric illness claim is being brought on their behalf by a law firm, and that they understand our concerns about “claims farming” practices.
“Since we sent the letters, a third of customers who have replied have informed us that they have not instructed any law firm to bring a claim. This striking statistic demonstrates that our concerns were well founded.”
The Ministry of Justice said that in addition to closing the costs loophole, “we will be calling on the travel industry and others to come forward with further evidence.
“This call for evidence will aim to gather robust data on the volumes and costs of claims, which will help inform further action from government and industry to tackle the issue”.