A government report has recently concluded that a fixed recoverable costs regime which has been extended to gastric illness claims that are made overseas will not be applied to all personal injury claims relating to package holidays.

Abta reported a 500% rise in holiday sickness claims during the years 2013-2016, and this prompted the Ministry of Justice to launch a call for evidence into how to handle personal injury claims that relate to package holidays. Last month, those findings were published by the MoJ.

Uncontrollable costs encourage exaggerated or false claims

Operators argued that uncontrollable costs incentivise claims management companies to encourage exaggerated or entirely false claims, while claims firms said fixing the costs would turn genuine victims away from the idea of making claims.

Back in May, fixed costs on holiday sickness claims were introduced. Before this, legal firms were able to rack up costs which in many cases were far higher than the value of the claim, and commentators said this was a move that forced operators to pay out rather than challenge any potentially bogus claims.

43 companies and organisations responded to the report, including Abta, the Civil Aviation Authority, tour operators such as Thomas Cook, Jet2holidays and Tui as well as legal firms for both defendants and claimants and claims management companies.

No serious problem with other package personal injury claims

The report found that there was no evidence of a serious problem with any other package personal injury claims, and that the problems lies with gastric illness claims. The report added that the MoJ are prepared to take action that would extend the scope of the provision should evidence arise of an unfounded increase in other types of package travel personal injury claims. This could include cruise or aviation claims that could prove very costly for law firms to handle.

The Association of Personal Injury Lawyers (APIL) said an extension to include other package holiday injury claims may represent a cure that goes much further than the identified malaise.

The MoJ claim that fixed costs help provide certainty for both parties, making it clear from the outset what the legal costs of a claim will amount to and make the costs of claims more proportionate. They say this means that defendants can challenge any claims without the fear of litigation being too expensive. It did note that there was slight concern that the introduction of fixed costs might prevent access to justice for genuine claimants if it were extended to other package travel personal injury claims.

The majority of claims are settled out of court, and for this reason the MoJ said fixed costs is unlikely to have a significant impact on the court system, though it did acknowledge there could be an impact on fees the courts collect but said it expects the number of lawyers opting against taking on these types of cases to be mitigated by other firms taking them on with fixed costs to meet a growing demand.

Here at Fonseca Law, we have an experienced team of solicitors who have the expert knowledge to help you win the compensation you deserve. To discuss your personal injury claim with one of our team, get in touch today. You can call us on 01495 303124, or email enquiries@fonsecalaw.co.uk.