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Updates, Insight & Analysis


Holiday Illness: Is fixed-costs really a simple solution?

Nov 22 2017

High profile Court decisions have meant that Holiday Illness claims have recently come under the spotlight. Here Matthew Aughton of Civil & Commercial Cost Lawyers discusses the likely effect of any potential fixed costs regime. 

David Lidington, the Lord Chancellor and Justice Secretary, has promised a future of fixed costs for holiday sickness claims in order to combat an alleged increase in fraudulent claims. A regime similar to current fixed costs tables in Part 45 of the Civil Procedure Rules appears a distinct possibility, perhaps as early as 2018.

ABTA (The Association of British Travel Agents), relentless in their pursuit for fixed costs, say that the number of holiday illness claims being made is out of control. They recently created an MP-lobbying tool in a further attempt to inspire these ‘reforms’.

What is evident to those familiar with holiday illness claims is that they are often far more complex than appears to be the consensus of the governing body.

If a true assessment of the holiday illness market place is undertaken there ought to be obvious details that distinguish these cases from the types of claim currently restricted to fixed costs.

The obvious starting point is that these actions often involve difficulties associated with foreign standards, laws and jurisdiction. As in Gouldbourn v Balkan Holidays Ltd and Anr [2010] EWCA Civ 372, [2010] All ER (D) 135, which dealt with whether or not recognised international standards could be applied rather than local standards in claims brought under reg 15 of the Package Travel, Package Holidays and Package Tour Regulations 1992 (SI 1992/3288), issues such as this immediately create complexities that are impossible to quantify for the purpose of a one-size-fits-all fixed costs regime. In fact, in the current protocols, accidents occurring out of jurisdiction are exempt due to the inherent complications in dealing with claims on foreign soil.

The burden placed upon the Claimant extends much further when tasked with proving a breach of international standards and a causative breach of the same. Cross-border investigations are common. Consideration of local standards and potential CCTV footage of the Hotel in question is often necessary; as Defendant insurers rely upon Hone v Going Places 2001 EWCA Civ 947, wherein strict liability under the applicable regulations was dismissed, to press Claimants. The complexity and expense of these investigations must be taken into consideration to avoid any new fixed costs framework being dead on arrival.

In addition to experts in local standards, holiday illness claims often involve assessments by other specialist experts, from gastroenterologists to microbiologists. Evidence is often contested by the tour operators and there is no guidance on what constitutes a reasonable fee as each case is different.  Will the Court follow the method of 45.12(c) and simply allow reasonable disbursements? Presumably not, as this will not satisfy the need for certainty, a fundamental requirement of any successful fixed costs framework.

The media pressure has increased exponentially following the recent jailing of Deborah Briton and Paul Roberts and there is evidently growing resilience amongst tour operators seeking further success stories. The couple were jailed having claimed to have fallen ill on two occasions whilst in Mallorca, however this was disproved via their own Social Media coverage of their holiday.

They would do well to remember that of the tens of thousands of claims which the industry says it has faced since 2013, a minute number have resulted in a finding of dishonesty. Clearly, more evidence is needed before we use terms like ‘epidemic’. It would be wrong for this case to be used as unjust leverage if the result is that access to justice for legitimate claimants is impeded.

The government recently provided the following note as justification for the proposed changes;

“ABTA has also found that while the average value of a gastric illness claim is about £2,100, the average cost of defending a claim is almost £3,800. The projected total cost of claims to the industry in 2016 (including damages paid) was estimated by ABTA to be over £240 million. We will look into these figures as part of the call for evidence.”

It would be interesting to explore the specifics of the claims included within this statistic, especially to determine in what proportion of cases liability was denied. In such cases, the Claimant’s solicitor’s hand is forced to act in the best interests of their clients, irrespective of whether the damages secured appear to represent a modest sum to those in big business. Statistics such as these can be drawn in any number of ways to create a perception of unfair bias.

These kind of superficial statistics are far removed from the detailed evidence the government will need to consider if its reforms are to achieve more than appeasing tour operators.

There are additional questions which must be answered en-route to this fixed costs utopia. Given that any fixed costs regime would be targeted at Fast Track claims, will we realistically see foreign standards experts and microbiologists shoehorned into 1-day Trials? And what happens to Claimants who suffer illness whilst holidaying at sea? The Athens convention relating to the Carriage of Passengers and their Luggage by Sea brings greater confusion and complexity to an already problematic equation.  Even if solutions can be found to the ever-expanding list of nuances, arguments between the parties concerning allocation to track are bound to continue, as will the precise requirements for the test of “exceptional circumstances” to escape fixed costs. 

The justification for and the aims of the government’s proposed reforms are described by Justice Minister Dominic Raab as follows:

“Bogus claims against tour operators risk driving up the price of summer holidays abroad for hard-working families who have earned a break. We’re taking action to deter these claims, and protect holiday-makers from being ripped off”

A noble pursuit; cheaper holidays! Maybe the savings made on insurance premiums following the MOJ portal could even fund our cheap holidays in the future... No?

Matthew Aughton is a member of Civil and Commercial’s Costs Lawyer’s Manchester Team. He has been practicing in the field of costs for over five years and has significant experience in Holiday Illness, Clinical Negligence and Judicial Review Claims.

If you would like to speak to Matthew or the rest of our experienced team about this or any other Costs Issue , give us a call on 0161 255 2788 or send us your enquiry online