Ministers have announced plans to reduce cash incentives to bring spurious holiday sickness claims against tour operators.
The move is a major step-up in the fight against fake illness claims blighting the travel industry and follows the launch of both Travel Weekly’s Fight Fake Claims and Abta’s Stop Sickness Scams campaigns calling for the government to take action.
The industry has seen a 500% upsurge in sickness claims since 2013, with tens of thousands of claims in the past year, yet reported sickness levels in resorts have remained stable and the problem is only associated with UK holidaymakers.
Currently, a loophole allows claims management firms to levy unlimited legal costs for incidents that take place overseas, so tour operators which fight claims can pay costs that are out of proportion to the damages.
Under the new proposals, operators would pay a prescribed sum depending on the value of the claim, making the cost of defending a claim predictable.
A system to control costs already exists for most personal injury claims in England and Wales.
Justice Secretary David Lidington said: “Our message to those who make false holiday sickness claims is clear – your actions are damaging and will not be tolerated.
“We are addressing this issue, and will continue to explore further steps we can take. This government is absolutely determined to tackle the compensation culture which has penalised the honest majority for too long.”
Ministers have asked the Civil Procedure Rule Committee, which is responsible for setting rules on legal costs, to urgently look at the rules governing the costs of holiday claims.
Abta chief executive Mark Tanzer said: “These claims are tarnishing British holidaymakers’ reputation abroad, particularly in Spain where they are costing hoteliers millions of pounds.”
He welcomed efforts to stop firms from “unduly profiting from false claims”, but called on the government to also increase transparency between claims firms and solicitors.