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Fixed costs for illness claims

Posted: 28/09/2017

It was recently reported that there has been a 500% rise in gastric illness claims since 2013. However, in the same period, reported sickness levels in resort have remained stable, which suggests the problem has been exacerbated by fraudulent claims.

It has become apparent that certain claims management companies have been encouraging UK holidaymakers to visit local pharmacies for medication, to help support claims when they return home.

These claims are said to be costing the wider travel industry tens of millions of pounds. Hoteliers in Turkey and Spain have announced that they may refuse to accept British tourists on
all inclusive packages, given the huge financial impact resulting from this trend.

The SRA is investigating at least 15 law firms involved in these types of cases, and it is no coincidence that the rise in sickness claims follows on from the introduction of fixed costs for fast track road traffic accident claims.

Potential claimants need to be aware of the penalties for making a fraudulent claim, as demonstrated recently in Hughes v Thomson. Ms Hughes claimed that she had suffered food poisoning at an all-inclusive resort but withdrew her claim at the eleventh hour, after it transpired that she had only eaten some breakfasts at the hotel.

Thomson decided it had enough evidence to bring a case against her for its defence costs. She was found to be fundamentally dishonest and ordered to pay £25,000 in costs to Thomson.

The Spanish Police have also actively pushed prosecutions and made arrests this summer. The Federation of Mallorcan Hotels has warned that anyone found guilty could face up to three years in a Spanish jail with no opportunity for a suspended sentence.

In his recent review of costs, Lord Jackson recommended a fixed costs regime should be introduced for holiday sickness claims. This will significantly reduce the level of costs currently being paid by tour operators and hoteliers for these type of claims.

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