April 19, 2017

Holiday illness - ABTA launches ADR Scheme for holiday illness claims

The Association of British Travel Agents (ABTA) has set up a new, independent Alternative Dispute Resolution Scheme to resolve personal injury claims, including holiday sickness claims, up to £10,000.

The scheme is administered by the Centre for Effective Dispute Resolution (CEDR) and is a voluntary process available to claimants who are unable to resolve their claim through the internal complaints process.

The new initiative follows a 434% increase in the number of gastric illness claims since 2013, largely as a result of claims farming by Claims Management Companies (CMCs), who are looking for fresh revenue streams following changes to the personal injury motor market. These claims now represent nine out of ten personal injury complaints received by members of ABTA.

The scheme is intended to reduce the cost of claims for holiday companies and their insurers by removing claims from civil litigation, thereby saving procedural and claimant representative costs. How effective this will be at curtailing claims numbers of what are largely farmed claims remains to be seen.

ABTA had previously called for a crackdown on CMCs targeting tourists while they are still on holiday. We recently reported that one hotel alone had received almost 200 cases in 2016 as a result of such activities, highlighting the extent of the problem.

The SRA is currently investigating 16 law firms after it received reports of some firms paying referral fees to CMCs. Payment and receipt of referral fees has been banned for personal injury claims since 2013.

Firms have been asked to provide information to show how claims are sourced, how many they have settled and the fees received in order to rule out any misconduct. The SRA has also requested copies of all written referral agreements or fee-sharing arrangements between firms and any CMCs. It is to be hoped appropriate sanctions are imposed for any breaches, which may go some way to curtailing future claims farming in this area.   

ABTA has also called for further action to reduce the cost of claims, including submitting a response to Lord Justice Jackson’s fixed costs review, requesting overseas holiday claims up to £25,000 are brought within the fixed costs regime presently used for other personal injury claims.