The government has backed away from a wider fixed costs regime for holiday claims – but warned lawyers that action will be taken if numbers shoot up.
In an update published last week, the Ministry of Justice confirmed its extension of fixed recoverable costs will just cover package travel gastric illness claims, leaving alone costs for other personal injury claims.
Claimant lawyers had urged the government not to impose fixed fees across all claim types, telling a consultation that extra costs were incurred abroad through instructing local experts, translation services and serving local standard evidence.
Insurers and travel operators had urged ministers to stand firm on its initial proposal to extend fixed costs to all package PI claims in the fast track. They warned in particular of an increase in non-gastric related travel claims.
The claimant lobby appears to have won this argument, with the MoJ accepting recent evidence showed little sign of any increase in non-illness claims. A submission was cited from the Association of Personal Injury Lawyers, which said the wider proposal was a ‘cure that goes much than the identified malaise’.
But the government response added: ‘We stand ready to take further action to extend the scope of this provision should there be evidence of an unfounded increase in other types of package travel PI claims.’
The response also urged tour operators to continue taking a ‘robust stance’ in challenging fraudulent claims and to keep detailed data to check any sudden increase in non-illness claims.
The Association of British Travel Agents has reported a 500% increase in gastric illness claims between 2013 and 2016 (the most recent year for which data is available), and projected around 41,000 GI claims across the whole industry in 2016. The total projected costs of GI claims to the industry (including damages and both claimant and defendant costs) was estimated by ABTA to be over £240m in 2016.