New rules will fix the legal costs that can be claimed by holidaymakers and thereby close a loophole that has fuelled an epidemic of bogus claims encouraged by dodgy law firms.
The new regulations will come into effect in the coming weeks, before the start of the busy summer season that sees millions of Brits come to Spain on package holiday deals.
Currently, a loophole allows claims management firms to levy unlimited legal costs for incidents that take place overseas, so tour operators which fight claims can pay costs that are out of proportion to the damages.
The scams proliferated in resorts such as Benidorm. Photo: AFP
This means that many tour operators have settled claims out of court, rather than challenge them and has led to a surge in fake claims that has damaged the British reputation overseas.
It has also led to concerns that British tourists will face higher package holiday prices.
“Claiming compensation for being sick on holiday, when you haven’t been, is fraud,” said UK Justice Minister Rory Stewart.
“This damages the travel industry and risks driving up costs for holidaymakers. This behaviour also tarnishes the reputation of British people abroad. That is why we are introducing measures to crack down on those who engage in this dishonest practice.”
The scam that really hit Spain during the summer of 2016 involves British tourists claiming that they suffered food poisoning while eating at hotels in Spain in a bid to get their money refunded.
Typically the claims come from those who wait until they have returned to the UK – too late to obtain proof of the food poisoning from a local Spanish doctor – and then file cases with small claims courts or complain directly to their tour operators.
The behaviour has been actively encouraged by some unscrupulous no-win, no-fee solicitors who tout for business at popular tourist resorts across Spain's costas.
There have been reports of lawyers even operating mobile “claims clinics” in vans parked outside all-inclusive hotels.
According to the travel industry, there has been increase in claims of up to 500 percent in recent years – up from 5,000 claims in 2013 to around 35,000 claims in 2016.
Last summer, Spain’s hotel industry announced new measures to protect themselves against fraudulent food poisoning claims that cost the industry more than €60 million in 2016 alone. Some all-inclusive hotels introduced electronic wristbands that monitor exact consumption by holidaymakers so illness can easily be disproved if need be.
Simon Manley, the UK’s ambassador to Spain explained: “The issue of fraudulent sickness claims has rightly caused concern in Spain, and has had a serious impact on Spanish hoteliers.
“These latest measures to control legal costs, announced by the British Government, as well as the steps taken at the end of last summer, show how seriously we take this issue, and underline our determination to clamp down on loopholes and fraudulent claims."
“Almost 19 million British tourists visited Spain last year and, whilst the vast majority of holiday makers will not make false claims, these steps will help to deter those that might be tempted to do so. As our travel advice says, making a false claim could result in legal proceedings in the UK or in Spain," added Manley.
Since October 2017, four couples were either sentenced or ordered to pay significant legal costs by the court after making false package holiday sickness claims.