It could lead to price rises for holidaymakers and even bans from some resorts after similar changes to the law south of the Border saw Spanish hotleliers hit with annual bills of up £50 million.
But just as the UK government moves to close loopholes in the law, the Association of British Travel Agents (Abta) is warning that proposed changes to civil law in Scotland would open a whole new frontier for claims firms to “aggressively market” for cases.
“Should these regulatory reforms proceed in a way that opens up the Scottish Courts system to such claims, as the loophole is closed in England and Wales, we would be seriously concerned that these cases would simply migrate to Scotland,” Abta states in a submission to MSPs at Holyrood.
The changes in Scotland are being proposed in the Civil Litigation (Expenses and Group Proceedings) Scotland Bill which Holyrood’s justice committee is currently scutinising.
The legislation is actually aimed at cracking down on compensation culture by capping claims – except for claims originating overseas.
The travel industry in England and Wales says it has been targeted by “spurious and exaggerated” claims from holidaymakers claiming to be suffering from gastric illness which they picked up on package trips.
It followed an overhaul of civil law in England and Wales which changed the “liability obligations” of Package Travel Regulations (PTR). It meant “all inclusive” holidays are increasingly blamed by courts when sickness occurs.
The result has been a 500 per cent increase in claims with Spanish hoteliers warning these could hit £50m a year.
“This has resulted in some hotelier associations and their members making clear that UK consumers are likely to face price increases, to have the availability of all inclusive holidays restricted, and potentially to be banned from certain resorts, should the problem not be addressed,” Abta states.
Claims management companies (CMCs) already target customers in Scotland to make claims in England and Wales, as consumer protection is reserved.
“In the summer of 2016, a major UK CMC was seen touting for business in resort in Tenerife, Spain, using a mocked up ambulance to encourage consumers to lodge claims,” saod Abta
The changes coming in the Civil Litigation Bill will allow the claims firms to target Scotland’s courts, Abta now warns, through the 1992 Package Travel Regulations, which are UK-wide, when loopholes are closed south of the Border.
A Scottish Government spokesman said the recent Taylor review found Scots are deterred from pursuing legal action.
He said the Civil Litigation Bill “will improve the ability of individuals with a genuine claim to vindicate their rights.”