New curbs will target holiday sickness fraud

A CRACKDOWN on holiday sickness fraudsters was launched yesterday.

New rules will cap the legal costs that can be claimed by holidaymakers in such cases at around £5,000.

It will close a loophole which the travel industry believes has fuelled a 600 per cent increase in bogus claims against tour operators in three years.

fake claims are thought to cost travel firms up to £240million a year – and the epidemic is pushing up holiday prices.

Until now, legal costs in overseas package travel claims have not been controlled. This has meant the legal bill faced by tour operators if they were to lose the case could be out of all proportion to the damages sought. It has led many companies to settle holiday sickness claims out of court, rather than challenging them. It is very difficult to prove food poisoning claims are false. The typical compensation payout per case is £2,000.

The Ministry of Justice believes the new measure will remove a major incentive for those tempted to make fraudulent claims.

Unveiling the latest attempt to tackle compensation culture, Justice minister Rory Stewart said: ‘Claiming compensation for being sick on holiday when you haven’t been is fraud. This damages the travel industry and risks driving up costs for holidaymakers. This behaviour also tarnishes the reputation of British people abroad. That is why we are introducing measures to crack down on those who engage in this dishonest practice.’

The Association of British Travel Agents said the number of holiday sickness claims soared from 5,000 to 35,000 between 2013 and 2016.

The new regime will see tour operators paying set legal costs depending on the value of the claim and length of proceedings, making them more predictable.

The cap for the most complicated claim will be fixed at around £5,000 and the rules will come in time for this summer’s holiday season.