Holiday sickness cases to come within fixed legal costs regime by summer

13 Apr 2018

The Ministry of Justice (MoJ) announced this morning that holiday sickness claims will, before the summer, be subject to fixed legal costs. Its overriding aim in making this change is “to crack down” (a favourite verb at the MoJ) on the numbers of fraudulent claims and on incentives for bringing them.

The detail of the new regime is to be made clearer on Monday 16 April, when the Government is expected to publish its response to the two-stage call for evidence run in connection with these cases during last autumn and earlier this year, as we reported in this previous article. A conclusion that MoJ chose to make this announcement today, rather than on Monday, in order to attract wide interest in the media and weekend press and might be a reasonable interpretation of events. Equally, it may not be coincidence that these reforms have been announced just a day after the Department of Business Energy & Industrial Strategy confirmed that it will be making new regulations, which will apply from July 2018, in order to implement the range of wider consumer protection measures required by the European Package Travel Directive 2015 (Directive (EU) 2015/2302) when compared against the 1990 Directive which it replaces.

BLM has been among those campaigning for reform of the costs and procedural rules applying to holiday sickness claims, activity which began with the publication of our research white paper in December 2016. We expect that the new rules, when published, will make these cases subject to the same costs levels as have been in place since August 2013 for public liability claims. We also expect that a dedicated new pre-action protocol will be put in place for these cases, although it appears quite unlikely that they will be notified via the Claims Portal mechanism. We intend to examine the detailed rules and figures, when published on Monday, on the BLM Policy blog.

The reforms announced today, which the MoJ has said are to “come into effect in the coming weeks” and “be in place before the next summer holiday season” are unlikely to represent the final word on how these cases are handled. The proposed increase in the small claims track limit from £1,000 to £2,000 may have an effect, as would implementation of Sir Rupert Jackson’s July 2017 recommendation that costs in these cases should be at the same level as in road traffic claims (rather than at the higher level for public liability claims). Furthermore, the tightening of the regulation of claims management companies (who will come under FCA oversight next year) and the proposed ban on cold-calling appear likely to affect case numbers over the medium term.

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Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to clients of BLM. Specialist legal advice should always be sought in any particular case.

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