The travel industry is likely to see an increasing amount of litigation from clients whose holidays have gone wrong.
Speaking at a Travel WeeklyDestination Connect event for tourist boards, partner at Plexus Law Claire Mulligan said customers were often being encouraged to take action by lawyers.
“Claimants’ solicitors now go on the radio and television to publicise how they can act on behalf of the claimant, often on a ‘no win, no fee’ basis. It means it is very easy for a claimant to be brought into an action with no financial risk to themselves.”
She said travel firms were often unaware of the value of customers’ potential claims. “It’s underestimated in some resorts how much money claimants can receive here in the UK. Actually the claimants’ damages are usually dwarfed by the costs paid to the claimant’s solictors.
“You can actually bring a claim for £2,000-£3,000 and the solicitors’ costs will be £10.000-£15,000. That’s why the industry is full of travel claims, because it’s an industry where tourists’ lawyers are rewarded for bringing claims, so it’s not going to go away. In fact it’s probably going to get worse before it gets better.”
A trend has emerged in the last few years for holidaymakers to take action as a group rather than individuals, she said. This could be after a coach crash or an outbreak of salmonella.
Mulligan said: “Group litigation has come out of nowhere. You might find two or three people complaining around the swimming pool that they were sick and it suddennly becomes a salmonella or norovirius outbreak. Firms will now pay for their solicitors to go out to resort and sign up claimants there and then.”
In some cases customers are paid by law firms to make claims against tour operators or hotels. She said: “It seems astonishing, but if you were to go into a certain solicitors’ firm and say you were sick on holiday, they will give you anything between £250 and £500 before you’ve even brought a claim.
“They will effectively buy you as a claimant to join their group action. Referral fees are something that’s accepted in the industry – there might be some legislation to curb it. At the moment.. it’s an incentive for people to litigate.”