In recent years, the travel industry has experienced a surge in claims for gastric illness contracted during package holidays; commonly known as 'holiday sickness' claims. Those who make fraudulent claims to court risk prosecution - and now, thanks to a landmark case, false claims made before the case even goes to court also face penalties.

In the recent case of Jet 2 Holidays Limited v Hughes & Anor [2019] EWCA Civ 1858 the Court of Appeal in England & Wales held that a witness statement made pre-action in support of a fraudulent sickness claim, could give rise to contempt of court. This decision demonstrates that fraud at any stage of a claim may give rise to serious consequences for claimants. But, how did we get here? It is useful to look at the evolution of holiday sickness claims and the way in which fraud in this area has been managed.

Holiday sickness epidemic

Between 2013 and 2016, claims against tour operators relating to gastric illnesses contracted during package holidays increased by 500% according to ABTA, the UK's largest travel association.
However over the same period, the actual number of sickness cases reported in resorts either remained stable or decreased. The fact that this increase in claims is associated only with British holidaymakers adds to the suspicion of fraudulent activity.

ABTA has blamed unscrupulous Claims Management Companies (CMCs) for targeting overseas package holidaymakers. It has been suggested that such CMCs did so because whiplash claims were no longer profitable and holiday sickness claims have been hailed as 'the new whiplash.'

The problem was perhaps exacerbated by the fact that when the wave of holiday sickness claims first hit, many travel companies opted for early economic settlements in a bid to avoid disproportionate litigation costs. Unfortunately this 'buy off' approach unintentionally led to a surge in claims which was encouraged by the knowledge that they were unlikely to be challenged.

The claims were driven in part by touts in holiday resorts. The touts were targeting and recruiting prospective claimants to bring false sickness claims, ABTA estimates that one in five people have been approached to bring a holiday sickness claim.

With the problem escalating, the Solicitors Regulation Authority in England & Wales issued a series of warning notices targeted at solicitors involved in potentially fraudulent sickness claims, and investigated more than 12 firms.

Package Claims Protocol

The outbreak of claims was costing the travel industry millions and also tarnishing the reputation of British holiday makers abroad. Boris Johnson, at the time in the post of Foreign Secretary, commented, "If the figures were to be believed, the digestive systems of the British people had become the most delicate in the world." There was concern that British holidaymakers would be excluded from European resorts or that the costs would significantly increase.

In a bid to quash dubious sickness claims, the government introduced the Pre-action Protocol for Resolution of Package Travel Claims ('the protocol') in 2018 for England & Wales.

The protocol applies to claims for gastric illness contracted on package holidays notified after 7 May 2018, which are now subject to fixed costs on the same scale as public liability claims.

The protocol goes some way to combat fraud as claimants are now required to provide evidence at the pre-action stage (if the claim is denied) of medical records, bank statements, receipts for medication, photographs and social media posts during their stay, as well as details of any other package travel claims they have made. It was suspected that repeat claimants were using compensation from one sickness claim to fund their next holiday.

Alongside civil justice reforms, the travel industry has secured many findings of fundamental dishonesty and criminal prosecutions in the fight against fraudulent sickness claims. Thomas Cook's prosecution of Deborah Briton and Paul Roberts made headlines in October 2017 with the couple being sentenced to nine and 15 months respectively after admitting their sickness claims were fraudulent.

Consequences of dishonesty

It is well known that claimants who pursue dishonest claims in England and Wales can face custodial sentences for contempt of court, but usually such matters only come into play after the claim is litigated.

The issue of court proceedings is a milestone in a fraudulent claim because the claimant is required to move through a series of procedural steps; each of which carry a risk of prosecution if he/she is not truthful. For example, the fraudulent claimant may sign pleadings and statements containing dishonest facts, give dishonest information to a medical expert, and possibly give false evidence before a judge.

These are all serious misdemeanours which expose a fraudulent claimant to a risk of prosecution for contempt of court.

For a fraudulent claimant, the pre-action phase might appear less risky. They might be tempted to test the waters by sending a letter or two to the proposed defendant in the hope of eliciting a settlement offer and in the (mistaken) belief that should their dishonesty be exposed, they can simply abandon the claim with no repercussions.

Jet 2 Holidays Ltd v Hughes & Anor [2019] EWCA Civ 1858

In this landmark decision, the Court of Appeal held that committal proceedings for contempt of court can be brought for false statements made at the pre-action protocol stage.

The claimants alleged that they had contracted food poisoning during a Jet2 package holiday in Lanzarote. At the pre-action protocol stage, they served witness statements with a signed statement of truth in support of their holiday sickness claims.

Jet2 uncovered various social media postings that undermined the claims including a 45minute GoPro video of Mr Hughes enjoying a snorkelling trip during the holiday despite claiming to be ill. Jet2 rejected the claims, which were effectively abandoned as the claimants did not issue proceedings.

However, that was not the end of the matter as Jet2 sought permission to begin committal proceedings against the claimants.

In the first instance decision, the High Court held there was no jurisdiction to find contempt as the witness statements were disclosed when proceedings had not been started under CPR Part 7. The Court of Appeal disagreed and found that the claimants' conduct in making the statements satisfied the stringent requirements for contempt proceedings, and therefore granted Jet2 permission to proceed.

The judges recognised the importance of the pre-action protocols in personal injury, describing them as 'an integral and highly important part of litigation architecture."

What does this mean for other claims in England and Wales?

The decision is a stern warning to dishonest claimants that there are no 'risk free' stages for pursuing a fraudulent claim; whether it be holiday sickness or otherwise.

Any belief that a claimant has to litigate, before they are exposed to a risk of prosecution, is mistaken. Pre-action fraudsters are equally at risk and can no longer walk away scot-free.