Spanish hoteliers could increase all-inclusive prices for British holidaymakers or pull out of the sector for the UK market because of the volume of ‘fraudulent’ sickness claims, say insurance industry lawyers in Madrid.

David Diez Ramos, of Madrid-based law firm Rogers & Co which acts for the insurance industry, said: “Sooner or later Spanish hotels will increase the price or stop selling all-inclusive to Britons.

“British citizens are paying less than £1,000 for a two-week all-inclusive holiday, receiving £2,000 to £3,000 for a claim and you can add £5,000 in lawyers’ fees. Hoteliers will move from this sort of holiday.”

The explosion in gastric illness claims by British holidaymakers made national news in Spain this month as Spanish hoteliers complained of being “held hostage” by the UK industry.

Hoteliers and insurers are furious that UK travel firms opt to pay claims and pass the costs to hotels rather than go to court. They argue many of the claims are fraudulent.

Ramos, who acts as a lawyer for the insurance industry, said: “Ten claims of this kind a month [are enough to] hit hoteliers’ profits.

“They have to transfer the risk to the consumer [or] hotels might be forced to move away from all-inclusive.

“Spanish insurance companies are going to increase the premiums or the excess [on policies for all-inclusive hotels] or not insure this risk. We have no options.”

He reported one hotelier in Benidorm already “will not sell all-inclusives to the British market”.

Rogers & Co partner Marie Rogers agreed: “Hoteliers will pull out of low-cost all-inclusive holidays sooner or later.

“The tour operators’ underwriters have stopped underwriting the business. We’re angry because there is very little we can do in Spain. The legal fees are crippling.

“The rules have to be tighter. We have [UK claims management company] people camping out at the airport.”

Ramos said: “It started as a serious problem last spring. We had very few claims two or three years ago. We used to have more falls in swimming pools than claims for sickness.

“In the first three months of this year we received 100 instructions [from underwriters] with three or four claims per instruction.”

By contrast, he said: “There are zero claims from other markets.

“When we started to deal with these claims, all the hoteliers and underwriters wanted to fight them. After one year they realised they were losing too much money.”

Ramos said: “The problem is not the claimants or the lawyers. It is a system which allows people to bring claims without any risk and in which lawyers earn more than the claimants.”