The Solicitors Regulation Authority is investigating 12 law firms it suspects of having “potentially improper links” with claims management firms in connection with holiday sickness claims.
The legal firms are also being investigated over allegations of payments made for referrals of holiday sickness claims from claims companies.
The SRA says it is also seeing evidence of firms pursuing claims without the proper instructions of claimants, failures to ensure that all documentary evidence is collated and “highly improper advice” issued to clients.
Information about 31 law firms that had “potentially improper referral arrangements with claims management companies” has been passed to the SRA by the Claims Management Regulator.
A statement released by the SRA on Wednesday said: “Genuine claims for holiday sickness can of course be pursued, but we are concerned that claims are being submitted without proper analysis of the evidence or understanding of the legal position.”
The investigations will come as a stark reminder from the regulator, which said there were allegations of organised criminals in the holiday sickness claims business, to legal firms warning them to operate with integrity.
Abta says there has been a 500% rise in holidays sickness claims over the last two years and Tui, the UK’s biggest travel company, told Travel Weekly it saw claims rise by a staggering 1,400%.
The sharp rises have raised serious suspicion of a spike in false and exaggerated claims, prompting Travel Weekly’s Fight Fake Claims and Abta’s Stop Sickness Scams campaigns.
The SRA’s statement continued: “Holiday claims provide an example of our concern that some law firms fail to engage properly, or sometimes at all, with the merits of their clients’ cases. This is of particular concern where there is evidence to suggest that the claim is false or dubious in some way. We are clear in our view that lawyers should not bring cases, or continue with them, where there is a serious concern about the honesty or reliability of the evidence.
“The extent to which law firms should verify their clients’ cases is risk-specific. For example, there seems to be a serious risk that many holiday sickness claims are not genuine.”
The SRA said examples of risk factors in holiday sickness claims would include:
• The claim is made some time after the alleged incident
• There was no report of the claim to the hotel
• There was no extensive sickness amongst others in the same accommodation
• The claim comes from or involves people generating claims in the resort
• The client’s contemporaneous report of the holiday was positive
• The client drank or ate excessively
Its statement added: “If there are allegations or concerns about a case, law firms must not turn a blind eye, but instead must engage with them and objectively assess whether the case can properly be pursued.
“An example of this might be allegations that claims are being generated or co-ordinated by organised criminals, as we have seen in ‘cash for crash’ cases. Law firms cannot simply ignore such allegations and nor can they simply assert that they consider them unproved or unfounded. They must engage properly with them and bear in mind their duty to the administration of justice.”
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