ARTICLE
2 August 2018

Fixed Costs Limited To Holiday Illness Claims

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Clyde & Co

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The Ministry of Justice (MoJ) has confirmed the fixed costs regime will not extend to holiday slip and trip claims, and will only apply to gastric illness claims.
United Kingdom Litigation, Mediation & Arbitration

The Ministry of Justice (MoJ) has confirmed the fixed costs regime will not extend to holiday slip and trip claims, and will only apply to gastric illness claims.

Following a Government consultation in October 2017, the first Pre-Action Protocol for Resolution of Package Travel Claims was published in April 2018 and came into effect on 7 May 2018.

The Protocol applies to holiday sickness claims with a value up to £25,000:

It was hoped fixed recoverable costs would apply across the board to all package personal injury claims in the fast track, in order to curb the dramatic increase of unmeritorious claims in the holiday sickness arena. However the MOJ has concluded that there is a lack of evidence to support extending fixed costs to other package holiday claims at this moment in time.

The MoJ has indicated they will continue to monitor the situation and will be ready to extend fixed costs if they see an increase in these types of claims, but no time frame has been set.

  • Group bookings and the Claims Portal

The MoJ has come to the conclusion that claims under the same holiday booking reference should be made separately. Claimants will need to include details of any other travel claims associated with the holiday in the letter of claim.

Furthermore, gastric illness claims will not fall under the portal as they are deemed unsuitable given liability is generally denied.

  • Timescales under the Pre-Action Protocol

The bespoke Pre-Action Protocol for gastric illness claims requires the defendant to acknowledge receipt of the Letter of Claim within 42 days from the date it was posted. The defendant will then have six months to carry out investigations. The timescales can be varied if both parties are in agreement, however those stated in the Protocol are the maximum periods.

The industry is starting to see a reduction in the number of gastric illness claims following the Government's reforms, however insurers could see an influx in the number of holiday slip and trip claims as these claims continue to fall outside the scope of the fixed costs regime. Indeed there is a danger Claims Management Companies will be looking for fresh revenue streams following the introduction of holiday illness fixed costs and the Government's wider personal injury reforms.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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