Updated 16 April 2018: The UK’s Foreign Office has announced new curbs on bogus holiday sickness claims. The FCO says that the rules will fix the legal costs that can be claimed in package holiday sickness claims, closing a loophole which the travel industry believes has helped fuel a rising number of claims. The industry fears that this claims epidemic is raising the prospect of higher travel costs for British tourists despite four couples being sentenced or ordered to pay significant legal costs since October last year after making false package holiday sickness claims : these cases were private prosecutions brought by tour operators Thomas Cook, TUI and Red Sea Holidays.
The rules will come into effect in the coming weeks, ensuring the curbs will be in place before the next summer holiday season. Up to now, legal costs in overseas package travel claims have not been controlled, which has meant costs for tour operators can spiral out of all proportion to the damages claimed. This has led many operators to settle holiday sickness claims out of court, rather than challenge them.
Justice Minister Rory Stewart said that claiming compensation for being sick on holiday, when you haven’t been, “is fraud. This damages the travel industry and risks driving up costs for holidaymakers. This behaviour also tarnishes the reputation of British people abroad. That is why we are introducing measures to crack down on those who engage in this dishonest practice.”
British Ambassador to Spain Simon Manley said that the “issue of fraudulent sickness claims has rightly caused concern in Spain, and has had a serious impact on Spanish hoteliers. These latest measures to control legal costs, announced by the British Government, as well as the steps taken at the end of last summer, show how seriously we take this issue, and underline our determination to clamp down on loopholes and fraudulent claims. Almost 19 million British tourists visited Spain last year and, whilst the vast majority of holiday makers will not make false claims, these steps will help to deter those that might be tempted to do so. As our travel advice says, making a false claim could result in legal proceedings in the UK or in Spain.”
According to the travel industry, there has been a substantial increase in claims, which some, eg ABTA, have estimated to be as high as 500% in recent years. While uncontrolled costs have discouraged tour operators from challenging claims, they have also emboldened claims management companies to encourage tourists to pursue holiday sickness compensation, with touts reportedly operating in European resorts.
To help tackle this, Ministers asked the Civil Procedure Rule Committee, which is responsible for setting rules on legal costs, to look at bringing package holiday claims within the fixed recoverable costs regime. This would mean tour operators would pay prescribed costs depending on the value of the claim and length of proceedings, making defence costs predictable and assisting tour operators to challenge bogus claims.
The Committee has now agreed to this rule change – the rules will be updated on Monday, and will come into effect shortly. More detail will also be published on the Government’s approach, alongside its response to a recent call for evidence, as part of the Government’s commitment to tackling the country’s compensation culture, which has seen it recently introduce a Civil Liability Bill which includes measures to reduce the unacceptably high number of whiplash claims and allow insurers to cut premiums. Other reforms include the forthcoming ban on cold calling and tougher regulation of claims management companies.
Updated 18 October 2017: A British couple who falsely claimed €20,000 compensation for food poisoning they allegedly suffered while on a Thomas Cook holiday to Majorca in 2015 have been jailed by a Liverpool Court. The pair, 53-year-old Deborah Briton and 43-year-old Paul Roberts, were sentenced to nine and fifteen months respsectively in prison after admitting four fraud charges. Thomas Cook said that the case was serious, and a reflection of what is happeing in the British travel industry. Here in the Canaries, tourism authorities and the hostelry industry have expressed satisfaction at the outcome of the case, the first of its kind to involve a custodial term.
Updated 29 August: The Foreign Office has said today that false holiday sickness claims have a negative impact on those with a genuine claim and also on the reputation of British people abroad. As part of a crackdown on false claims, one firm responsible for pressuring people into making holiday sickness claims has recently been stripped of its licence by the Claims Management Regulator. The FCO says that intelligence gathered by the Claims Management Regulator (CMR) officers revealed that Lancashire based Allsure Ltd had encouraged holiday-goers to fabricate or embellish symptoms of gastric illness to get compensation. Further evidence showed the firm had used deceptive sales scripts – exaggerating expected pay-outs to entice consumers. This conduct has led to the firm’s licence being cancelled, which means that it can no longer offer regulated claims management services to new or existing clients.
Kevin Rousell, Head of the Claims Management Regulator said: We will take firm action against claims businesses which engage in serious misconduct. Seeking to encourage false claims will not be tolerated. CMR, based at the Ministry of Justice, regulates companies that offer to help people claim compensation for issues such as personal injury and mis-sold financial products. The action taken against Allsure Ltd is the latest in a series of moves by government to crackdown on fake sickness claims, following concerns from the travel industry of a surge in insurance claims for gastric illnesses like food poisoning being brought by British holidaymakers.
ABTA itself advises that anyone on holiday who is approached by a Claims Management Company tout should tell the tour operator and the hotel staff so that they can take appropriate action. Anyone who falls ill on holiday should again let the tour operator and hotel management know at the time. There is more advice from ABTA HERE. Anyone who has received an unsolicited call from a CMC trying to persuade them to make a fraudulent holiday sickness claim can report them to the Claims Management Regulator: you can find out more from the Government HERE.
Updated 15 June 2017: Six months on from the last post about so called British ambulance-chaser style lawyers and the Canarian Tourism Institute has announced that two British people have been arrested on suspicion of falsely claiming to have received food poisoning in their Majorca hotel. The Guardia Civil apprehended the pair last Friday, and say that this is the first case of its kind based on the instigation by British legal firms of claims of illness caused to British tourists by Spanish hotels. They also say that more prosecutions will come, throughout Spain.
Updated 15 December 2016: The Confederación Española de Hoteles y Alojamientos Turísticos says that fake claims by the so called British ambulance-chaser style lawyers are now in the region of €50 million. CEHAT says that the matter is now considered so serious that the Spanish Secretary of State for Tourism, Matilde Asián, is now taking charge of the matter.
The interest at a national level is due to the Government’s concern that such fake claims are damaging the impression of Spain among its main client base in the UK. The Spanish Government is already dealing with the UK’s Foreign Office in respect of potential measures to deal with the problem, and the FCO itself has now issued a statement that Spain is a secure destination and that to make fake claims is a crime that will result in prosecution.
Original post 15 September: Ashotel has denounced what ît says are British ambulance-chaser style lawyers inciting tourists in south Tenerife to make false claims against hotels. Association president Jorge Marichal met on Tuesday with representatives from the Canarian Government and National Police to convey the concern of hoteliers over the practice, which he says is carried out from “claims clinics”, which are no more than vans done up to look like ambulances. Marichal stressed that since the motive was purely financial the practice, which the association has watched develop throughout the summer, could be classed as “organized crime”.
The vans, with English text plastered over them to urge tourists to denounce hotels for a range of problems like food poisoning, have been circulating around south Tenerife, Ashotel says, stressing that the vans have even stopped at the doors of some hotels to capture “clients”. The practice is apparently already known in the Balearics and Andalusia, and Ashotel says that apart from being in contact with Government and police in Tenerife, it is also in contact with hotel associations in those areas to see what combined action may be possible. At the very least, Ashotel says, there is an issue with an unlicensed business being carried out by workers who, moreover, are not making social security contributions or complying with tax regulations.
Jorge Marichal said these were “pirate lawyers” who seemed to be associated with firms in the UK engaged in the same practices. Often, it seems, the claims are presented without even the most basic medical evidence, simply the allegation that the tourist became ill and had to buy medication, the unproven cost of which is claimed with threats of legal action if reimbursement were not to follow. The key, Ashotel says, is that the claims are then presented in the UK, causing hotels here either to face international legal action with elevated costs, or simply to pay up even though, Marichal says, the vast majority of the denuncias are false.