Tour operators could face fewer costly claims by customers following a judgement in a case against First Choice.
Group litigation cases by holidaymakers against travel firms are increasingly common, with lawyers prepared to take cases on a ‘no win-no fee’ basis and claim huge costs that puts pressure on the travel firm to settle.
However, Judge MacDuff made use of rarely used court powers at the Birmingham District Registry this week capping the claimants’ costs before a case start.
Law firm Irwin Mitchell claimed costs of up to £2 million in a case against First Choice, in which it was claiming around £400,000 on behalf of 151 holidaymakers who suffered from gastroenteritis when staying at Hotel Soviva in Tunisia in 2001/02.
First Choice’s law firm Field Fisher Waterhouse appealed successfully for Irwin Mitchell’s costs to be capped at just £215,000, with Judge MacDuff agreeing costs had got wildly out of control.
Field Fisher Waterhouse solicitor James Lewis said First Choice, which denies liability and intends to continue fighting the case, would have had to think twice about defending the claim if it was facing the prospect of paying the claimants’ costs of up to £2 million.
Lewis said it is impossible to prove the claimants’ law firm was deliberately exaggerating its costs. However, in this case Irwin Mitchell refused to provide a detailed breakdown of its costs.
“Now costs will be capped from the beginning of the case,” Lewis said. “This case could see such group litigation cases against travel companies reduce as lawyers will be less likely to take on cases because they will be less profitable.
“Holidaymakers should realise these cases are more about the lawyers profiting than their compensation.”
The First Choice case was likened to a similar one against operators offering the Torremolinos Beach Club in 2002, in which the judge said litigation was being used to “generate excessive and unreasonable costs”.