horwich farrelly

Travel sector’s fight against fraudulent holiday illness claims achieving positive results

August, 1, 2018

According to the latest figures from the Ministry of Justice (MoJ), the number of Claims Management Companies (CMCs) operating in the travel sector decreased by 37% from August 2017 to January 2018.

Horwich Farrelly, the specialist insurance industry law firm, which has been instrumental in working with the travel industry to tackle fraudulent holiday illness claims, believes that this decline is clear evidence that the sector’s fight against fraud is working.

Mark Hudson, Partner, Horwich Farrelly believes that the strong response from the travel sector in defending these claims has meant that unscrupulous CMCs have clearly realised that fraud will not be tolerated in this area and, therefore, they are taking on less claims as they know they will not be successful.  Mr Hudson said: “In January 2018, the MoJ asked CMCs to report if they handled holiday sickness claims. 140 CMCs said they did, a reduction from 225 on a previous MoJ survey in August 2017. Such a fall is strong evidence that the robust response from the sector, working closely with firms like Horwich Farrelly, is making the business of fraudulent holiday sickness claims less attractive.”

Horwich Farrelly also welcomes the MoJ report into the findings of a call for evidence into how the industry should best handle personal injury claims related to package holidays. The report concluded that whilst the problem in the industry lies mainly with gastric illness claims, further action to extend the scope of this provision could be taken in future should there be unfounded increases in other types of package travel personal injury claims.

The law firm worked closely with industry bodies to submit evidence to the MoJ highlighting the issues.  Partner Nicola Critchley also chaired the Civil Justice Council working group that was tasked by the MoJ with proposing changes to the legal processes for gastric illness claims to deal with the problem. New rules have now been introduced which have significantly reduced the financial incentives for pursuing false claims.

Horwich Farrelly has applied its zero tolerance approach to fraud to successfully defend more than 2,700 holiday illness claims in the last year, and is delighted to see its approach being validated.

“The recent surge in travel claims resulted in many ‘new players’ entering this sector and this is why Horwich Farrelly, in conjunction with FOIL and the travel industry, called for a bespoke pre-action protocol to address adverse behaviours and bring certainty with fixed costs,” added Mr Hudson.

“The travel industry has a key role to play in challenging fraudulent holiday illness claims and bringing them to justice, and Horwich Farrelly will continue to work alongside both the industry and the MoJ to see that this strategy progresses and such claims are defended robustly.”

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