Fred Olsen Cruise Lines is reported to have agreed a £280,000 payout to 130 passengers who fell ill on one of its ships.
The group settlement comes after passengers suffered gastric illnesses on the Boudicca between October 2009 and May 2010.
Passengers’ symptoms included diarrhoea, vomiting and severe stomach cramps.
Fred Olsen said all its ships met the highest standards of health, safety and hygiene at all times.
Clare Pearson, from law firm Irwin Mitchell, said: “We have heard a range of stories of how so many people’s breaks – which were often booked as luxury, once-in-a-lifetime trips to celebrate Christmas, wedding anniversaries and birthdays – were ruined by illness.”
A Fred Olsen spokeswoman told the BBC: “Unfortunately, from October 2009 to May 2010, there was a higher incidence than usual of gastric illness, also known as norovirus or winter vomiting virus, within communities in the United Kingdom, which is commonly identifiable in areas where people reside in close proximity.
“Most people do not report incidences but on a cruise ship, where movement is restricted, cases are particularly highlighted.
“The health, safety and well-being of all our guests and crew remains our utmost priority at all times, and we believe that our systems for preventing the spread of illness on board our ships are amongst the best within the industry.”
Luke and Emma Ryan, from Petersfield, Hampshire, spent Christmas 2009 and new year with their five-year-old daughter on the ship.
Mr Ryan is reported by the BBC as saying: “It was a disaster … instead of opening presents on Christmas morning, I had to be seen by a nurse.
“The cruise was cut short by a day due to the illness and, to be frank, the end could not have come soon enough. We hope this settlement will mean we can now move on with our lives.”