The Ministry of Justice (MoJ) has said that bogus travel sickness claims are costing the sector millions and risks pushing up prices for law-abiding holidaymakers. Ministers fear that the upsurge among Britons making false insurance claims could be as great as 500 per cent since 2013 and travel agents have warned that it could lead to certain types of package holidays being taken off the market.
The Government said tour operators often decide to settle holiday sickness claims out of court, rather than challenge them because, due to the fact these spurious claims are arising overseas, legal costs are not controlled. The MoJ believes the disparity with claims figures in other European countries suggests the United Kingdom has a problem with the scale of bogus claims.
The resulting costs to the industry could be past on to holidaymakers, driving up the prices for families. We're taking action to deter these claims, and protect holiday-makers from being ripped off'.
According to ABTA, the average value of a gastric illness claim is about £2,100 and the average cost of defending a claim is higher, at nearly £3,800. The projected total cost of claims to the industry in 2016 (including damages paid) was estimated by ABTA to be more than £240m.
Ministers believe fixed costs will give travel operators more incentive to challenge sickness claims rather than settle them out of court.
Ministers have put forward proposals which would mean tour operators would pay a set sum depending on the value of the claim.
These proposals will be considered by the Civil Procedure Rule Committee, which is responsible for setting rules on legal costs.