The Solicitors Regulation Authority (SRA) has contacted over a dozen law firms and demanded that they prove that they are not paying referral fees for holiday sickness claims work.
The Law Society Gazette has reported that the regulator is asking the firms to explain how they source holiday sickness claims, how many they have settled and what fees have bee received for the work.
The regulator wants to see copies of all written referral agreements or fee-sharing arrangements between the firm and any CMCs. The SRA also wants copies of letter templates used by firms when dealing with gastric illness claims in particular.
A spokesperson told the Gazette that 16 reports had been made to the SRA to date and said that the watchdog would pass on its findings to firms to make sure that they were aware of their obligations when undertaking holiday sickness claims.
The Gazette has also revealed that firms have complained that travel operators have approached them to try and put them off from pursuing claims.
Last December, BLM said that the travel industry had been hit by a dramatic rise in gastric illness compensation claims, with “rogue” CMCs urging holiday makers to put in speculative claims against operators and hotels.
The firm commissioned YouGov to survey 2,000 consumers on their attitudes to sickness claims on all-inclusive holidays, after seeing claims against its in travel clients soar over the past 12 months.
46% of those questioned thought it would be acceptable to make a claim for food poisoning even if they weren’t sure their illness was the fault of the hotel, a belief that has helped create a thriving fraud culture, according to BLM.
Sarah Hill, partner and head of fraud at BLM said: “It is not exaggerating to call this situation an epidemic. CMCs have identified this as fertile ground and there is a deep pool of potential claimants up for grabs. There needs to be some level of consumer education, as almost half of those surveyed think this practice is acceptable. In reality, it is against the law and is pushing up holiday prices.”