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Travel firms will face fewer claims for personal injury and reduced costs after a clampdown on ‘compensation culture’.
Chancellor George Osborne announced a rise from £1,000 to £5,000 in the limit on small claims for personal injury, as part of his Autumn Statement last month.
The change will mean more cases will be handled by small‑claims courts, where most claimants can’t expect to claim legal fees, even if they win.
Industry lawyer Stephen Mason, senior partner at Travlaw, said: “Life-changing injuries will continue to go to a full court process, but the vast majority of injury claims, such as for a broken wrist or food poisoning, will be dealt with in the small-claims court.
“The loser won’t pay the legal costs of the winner. It’s unlikely to be economic for claimants to instruct a lawyer. Many claims will not be brought at all, as it is quite daunting and quite technical to bring an injury or illness claim without a lawyer. So the industry will face fewer claims.”
Mason added: “Even where a claim is successful, there will be no consumer’s legal costs to pay.
“It is quite common currently for a claim to be settled for, say, £3,000 and for a claimant to seek legal costs in excess of £20,000.
“This should help reduce insurance premiums. Any of us could be the victim of an accident and find our access to justice weakened. But for the travel industry, this sounds good news.”
Abta head of legal affairs Simon Bunce agreed, saying: “This does seem a good thing for the industry on the basis you would not get lawyers involved.”
Companies tend not to disclose the number of claims they face, but Bunce said: “There does seem to be an increase. The idea of ‘ambulance chasing’ seems to be a concern.”
The Forum of Insurance Lawyers noted the new limit was “aimed at tackling the so-called compensation culture” related to traffic accidents. It could be introduced as early as next spring.