Agents and operators could face fewer personal injury claims as a result of legal reform proposed last week.
The changes to the “no win, no fee” systemproposed by appeal court judge Lord Justice Jackson could “change the landscape” of claims against travel companies, some lawyers believe.
Under the existing system, which has been criticised for encouraging speculative claims, losing claimants do not have to pay legal costs.
The reforms propose claimants should foot the legal bill themselves if they lose. The potential costs of claiming are also set to increase under plans to scrap insurance covering lost cases.
Defendants would largely have to pay their own legal costs, whether they win or lose, and will have to pay the claimant’s legal costs should the claimant win.
Abdulanesh Alaraqu director of Brit Claims said the reforms would discourage speculative cases.
“At the moment, there is an ethos of ‘we might as well have a go’, but if the costs to pay should people lose increase, they may not be so willing to take action,” he said.
“It means lawyers will only want to take on strong cases. This will change the legal landscape of claims against travel companies.”
Claimants who win will be eligible for compensation payments that are 10% higher than now.
However, travel firms could still pay less if they lose, because a cap would be introduced on what a claimant’s lawyer can claim as a success fee.
The reforms are due to start in 2012.
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