The Ministry of Justice (MoJ) has called for evidence to assist their proposals to introduce Fixed Recoverable Costs (FRC) in early 2018, to clamp down on the dramatic increase of unmeritorious claims in the holiday sickness arena. The Civil Justice Committee is currently drawing up rules for fixed fees which will be informed by the call for evidence.
There has been a reported 434% increase in the number of gastric illness claims since 2013, largely as a result of claims farming by Claims Management Companies (CMCs), who are looking for fresh revenue streams following the Government's reforms of the personal injury motor market.
The consultation calls for evidence on:
- The drafting and effect of the proposed amendments in the Employers Liability / Public Liability Pre Action Protocol.
- Whether there are any particular issues that should form part of the Civil Justice Committee's work when looking at the rules and procedures for bringing low value PI package holiday claims and low value PI claims more widely.
- Further data on the volume and associated costs of gastric illness claims including the volume of claims, length of time between the incident and notification of the claim, success rates and damage levels awarded.
Fixed Recoverable Costs and amendments to the Pre Action Protocol for EL / PL claims
Lord Justice Jackson's report on Fixed Recoverable Costs recommended extending the FRC regime to holiday illness claims at motor rates. Whilst the Government will follow his recommendation, they propose setting FRC at liability, rather than motor, fixed fees as these rates would be applied if the incident took place in England and Wales.
The Pre Action Protocol for Employers Liability / Public Liability claims (EL / PL PAP) will need to be amended to ensure FRC apply to claims where the Package Travel, Package Holiday and Package Tours Regulations 1992 (Regulations) are engaged.
Amendments to the EL / PL PAP include:
- Extending FRC to all fast track personal injury public liability claims (rather than solely gastric illness claims) in order to stop anticipated increases in other types of holiday claims.
- Extending FRC to claims under the Supply of Goods and Services Act 1992 and the Consumer Rights 2015 in order to prevent an increase in claims under these provisions in the alternative.
- Extending the response period for defendants to complete their response to the claims notification form (CNF) from 40 days to 120 days.
The Government is aiming for FRC to be applied to all new claims from April 2018.
EU Package Holiday Directive
The number of claims is expected to rise following the implementation of the revised EU Package Holiday Directive which comes into force on 1 July 2018. The concept of "package" will be extended to broaden the scope of the Regulations and cover a wider range of travel products. Small travel agents may now fall within the scope of the Regulations.
The consultation follows recent initiatives, including ABTA's ADR scheme for holiday illness claims and the extension of CUE to include travel insurance claims, to clamp down on the number of fraudulent holiday illness claims.
The deadline for written submissions is 10 November 2017.