The government is looking to clamp down on the number of fraudulent travel sickness claims made by British holidaymakers.
Moneywise reported last month that a growing number of fraudulent sickness claims are being lodged by travellers. This is said to be costing the travel insurance and package holiday industries millions of pounds every year and driving up prices for ordinary tourists. Holidaymakers also put themselves at risk of jail time for making fraudulent claims.
But now the Department of Justice has unveiled plans to crack down on these fake claims, which are often submitted by claims management companies (CMCs). It wants to deter fraudulent claims by making it cheaper for holiday firms to defend themselves.
At present, many tour operators often settle claims out of court because there are no limits to the legal costs they can face.
Under the new proposals, travel firms would pay a fixed sum based on the value of the claim. This is intended to make the cost of defending a claim predictable and would bring the travel industry in line with the rules for most personal injury claims in England and Wales.
Ministers have asked the Civil Procedure Rule Committee, which is responsible for setting legal costs, to look at the matter urgently. When asked by Moneywise, the Ministry of Justice was unable to put a timeframe on when these proposals would be implemented.
‘Your actions are damaging and will not be tolerated’
Justice secretary, David Lidington, says: “Our message to those who make false holiday sickness claims is clear – your actions are damaging and will not be tolerated.
“We are addressing this issue, and will continue to explore further steps we can take. This government is absolutely determined to tackle the compensation culture which has penalised the honest majority for too long.”