Bogus whiplash claims adding sizeable sums to all of our car insurance policies have come to the fore in the press over the years, and thankfully a clampdown on claims management companies (CMCs) and a capping of the legal fees they can charge have curtailed it.
However, a legal loophole means overseas cases are excluded from this “fixed-cost regime”, meaning these CMCs have been targeting package holidays – particularly all-inclusives – with holiday sickness claims.
Data from Abta members has shown a dramatic rise in the number of gastric illness claims made since 2013, while sickness levels reported in-resort have remained stable. Gastric illness claims now represent 9 in 10 personal injury complaints received by members, a figure that stood at around 60% in 2013.
The legal costs associated with these cases, where evidence is scarce, means it is easier to settle claims; this in turn means bills totalling millions of pounds for tour operators.
The government must take further decisive action to close the loopholes that are being exploited by CMCs. In particular, the Ministry of Justice has a chance to include package holiday claims in the fixed-costs regime.
Holidaymakers who are ill would still be able to sue, and that is absolutely right, but the epidemic of false claims encouraged by tactics such as cold-calling and social media posts needs to be stopped.
We have had meetings with government officials and are working with members to gather data detailing the scale of this problem so we can build a case to present to justice secretary Liz Truss, who would make such a change.
In the meantime, Abta has adopted several tactics to address this problem. We have launched a new alternative dispute resolution (ADR) scheme for personal injury claims of up to £10,000 and recently held a seminar on how to address this issue operationally, which was attended by a number of Abta members and representatives from Spanish hotels and trade associations. It resulted in some best-practice suggestions for documenting illness levels in-resort.
We are also working with the media to raise public awareness and discourage bogus claims. This has led to coverage in the Mail on Sunday and we have appeared on BBC Radio 4’s You and Yours, while Simon Calder has discouraged readers from using CMCs in his Evening Standard column.
Bogus claims also involve costs to overseas suppliers. Hoteliers in Spain in particular are upset about having to pay large sums for unjustified claims.
The issue has been described on Spanish primetime TV as the latest British “scam” and has the potential to damage the reputation of UK holidaymakers. Some hoteliers have even said they may reconsider whether they wish to work with British tour operators as the problem does not arise with other nationalities.
It is vital that while we push for legal changes we also show overseas colleagues that we take the issue seriously and are doing all we can to stamp out this appalling practice.
Alan Wardle is director of public affairs at Abta