A top judge who led a review into the amount legal firms can claim in costs has backed government calls to limit the amount they can charge for holiday sickness court cases.
An update to Lord Justice Jackson’s Review of Civil Litigation Costs was released on Monday July 31 recommending the move.
In it he says holiday sickness claims should be brought in line with other ‘low-value’ personal injury claims that can be dealt with quickly due to the simplicity of the case and says costs for holiday sickness claims should fall in line with those of whiplash claims.
This change in the fixed legal costs regime was one of the key demands of Travel Weekly’s Fight Fake Claims campaign as well as Abta’s Stop Sickness Scams lobbying efforts.
The government has previously suggested that what the Fixed Recoverable Costs (FRC) regime calls “fast-track” cases – claims up to £25,000 – should now include holiday sickness claims made against tour operators, and has highlighted its intention to do so.
The backing of Lord Justice Jackson is seen as a positive step that will help the government introduce the cap. In his report, evidence submitted by tour operators revealed a huge variation in the costs charged by the legal representatives of claimants.
Costs data supplied by a firm of costs lawyers showing profit costs claimed in relation to damages recovered in 79 holiday sickness cases
In a cross-section of 79 settled claims, some firms charged upwards of £70,000 in costs while many others were asking for less than £10,000. One firm’s costs of nearly £80,000 related to a claim of £100,000 while another firm billed costs of more than £70,000 for a case over damages worth around £10,000.
Lord Justice Jackson said: “On the basis of the evidence during this review, I would suggest that the FRC for such claims (when pursued individually) should be the same as for RTA (road traffic accident) personal injury cases. The government has recently announced an intention to introduce FRC for holiday sickness claims. I support that proposal.”
Abta welcomed Lord Justice Jackson’s supplemental report.
A spokeswoman said: “This is very good news for the travel industry and for holidaymakers, and follows months of work by Abta and its members with the Ministry of Justice, asking that they close the claims loophole that has enabled unscrupulous claims companies and legal firms to target travel companies.
“The Justice Secretary, David Lidington, announced the government’s plans to amend existing laws in this area on July 9, and Lord Justice Jackson has today recognised the merits of this approach.
The Ministry of Justice is set to launch a call for evidence on the inclusion of holiday sickness claims in the FRC in August.
“Abta encourages the travel industry and our partners to engage with this process,” the spokeswoman added. “Once the call for evidence has been completed, it is essential that the necessary amendments should be brought forward as soon as possible.”
