On 9 July 2017, the Government announced its proposal to amend the pre-action protocol for low value personal injury claims in order to bring holiday sickness claims within the existing fixed recoverable costs regime. This is on the back of the reported 500% increase in holiday sickness claims since 2013 although the number of reported incidence of gastric illness in resort has remained stable and the resulting campaign by the travel industry (led by ABTA) to bring holiday sickness claims into line with other low value personal injury claims.
The phenomenon of increased holiday sickness claims has been fuelled by the Civil Procedure Rules which do not allow successful defendants to recover costs under qualified one-way costs shifting (QOCS) unless they can show the claim is fundamentally dishonest.
Great news from the MoJ who have announced that legal costs for holiday sickness claims will be fixed. This is anticipated to come into effect in the next few weeks. It is not entirely clear if the new fixed costs regime will cover cruise holiday sickness claims and we will advise further as soon as we have obtained clarification on this point.
The claimant’s costs in holiday sickness cases to date have not been fixed and therefore have been significant for cases where damages are generally very low value. This will therefore be a welcomed result for hoteliers and their insurers as the rules should be in place before summer 2019. The new fixed costs will provide certainty to defendants in knowing the amount of costs they will have to pay to defend such claims. This should therefore lead to more defendants taking cases to trial and challenging bogus claims. It will also be beneficial to the genuine holiday maker who can still make a legitimate claim but not face the cost of his/her holiday increasing.
However, whilst all of the above is promising and certainly shows progress in the right direction it is questionable whether the changes go far enough in preventing fraudulent claims. Claimants will undoubtedly still bring claims notwithstanding that their costs will be limited as the fixed costs regime may encourage defendants to settle claims at an early stay when the costs are low or fight them to trial notwithstanding the slightly higher costs of doing so.