That was the warning of Peter Kearns, executive director of Egypt specialist tour operator Red Sea Holidays, who said he feared that despite measures taken to curb the surge in fraudulent claims over the past year – after Abta reported a 500% rise in claims since 2013 – a backlog could still leave the travel sector vulnerable.
The rise in cases forced Red Sea Holidays to employ its own in-house legal team to deal with the issue and up until just a few months ago the company “had more staff dealing with legal claims than selling holidays”, Kearns told TTG.
In May, sickness claims were moved under the fixed-cost regime alongside other types of personal injury – closing a lucrative loophole and limiting the amount of legal costs that could be won by solicitors and claims management companies (CMCs).
Kearns warned that although Red Sea Holidays had seen a fall in the number of fresh claims in recent months – in line with Abta’s findings – the three-year claims limitation period could still come back to bite.
The warning came as the Solicitors Regulation Authority issued a notice last week, reminding lawyers of their responsibilities when handling holiday sickness claims. The regulator said it was investigating the practices of 18 solicitors, several of which Kearns confirmed had been reported by Red Sea Holidays.
“We are now three years on from the peak claim period (summer 2015-16), and solicitors with a backlog of claims may rush to submit them before the cut-off date,” said Matt Gatenby, partner at Travlaw.
“CMCs presumably still have the contact information for potentially thousands of would-be claimants and they might be thinking: ‘If you don’t shoot, you don’t score’.
“But there has been a lot of good work from government and the industry, so I don’t think we’ll necessarily see a huge surge,” he added.
According to a report by the Ministry of Justice published last month, the number of CMCs handing holiday illness claims fell from 225 in August 2017 to 140 in January 2018.
Thomas Cook said it had seen “a dramatic reduction” in new claims compared with a peak in early 2017, understood to be around a 90% drop.
