Dear Lord Young
Whilst I appreciate you no longer occupy the role given to you by the Prime Minister, it is nonetheless important that we address a number of issues with you, as you were the architect of your report on the furture of civil litigation! It is 15 years since this Organisation was created and I am writing to you in my capacity of Consumer Director. In writing to you, I do so by openly publishing this letter in response to your report ‘Common Sense – Common Safety'. Unfortunately at the time of your enquiry, we were unable to contribute as a stakeholder, but had resolved to openly respond to your expected conclusions.
In the midst of the passions created by the debate on the economic cuts, I thought that it would be helpful to set out our views on the issues you have raised.
Authority to Comment:
In order to establish my authority to comment on these issues, I confirm that HolidayTravelWatch (HTW) is British based consumers organisation founded in 1995. Through 15 years of operation, it has provided information, advice and assistance to over 210,000 holidaymakers, through its dedicated helpline and website. This should however be put into context with the 65,000,000 individual trips taken by British Citizens in 2005. It suggests that HTW only receives a small proportion of all complaints, however, these holiday complaints tend to reflect the more serious element of contractual, illness and injury difficulties faced by the consumer.
HolidayTravelWatch is actively engaged in presenting the Consumer story to politicians and civil servants, both in Brussels and Westminster. Whilst we provide support, assistance and access to litigation solutions, we also work toward strengthening the Consumer position and seek improved legislation with the goal to ultimately reduce the number of complaints made by Consumers.
To support the transparency of our lobbying activities, we are entered onto the EU Register of ‘Interest Representatives’ – ID Number – 63992152960-12.
Concerns on Quango Cuts:
I would like to express our concern that important 'consumer' quangos have either been cut or subsumed into new entities.
In examining the quango cuts list I can see that:
- Consumer Focus is to be abolished and their role is apparently to be adopted by The Citizens Advice Bureau;
- The Office of Fair Trading is to merge with the Competition Commission;
- The Health Protection Agency will see its role merged into the New Public Health Service, and
- The Disabled Persons’ Transport Advisory Committee is to be abolished with advice being provided through a ‘flexible accountable structure’
The loss of expertise or the lack of, or uncertainty of funding, to ensure continuity of that expertise, is regrettable and will in our view greatly contribute to a real Consumer detriment when pursuing legitimate claims. It will, insofar as our work is concerned, mean that we shall undoubtedly receive a far larger number of calls as the expertise on holiday complaints becomes diluted.
Your report unsurprisingly concentrates on the perception of making legal claims, with the emphasis upon UK domestic legislation.
Readers of your report could be forgiven for thinking that a stigma of greed is attached to those making a legal claim. The support for this proposition is the fact that the making of claims is out of control and a rising evil in a modern society.
Much is made of the 'onerous' provisions of health & safety legislation, but it is that legislation that has created a much more risk aware and safer society. The debate on common sense is entirely separate and is surely about poor support management utilising the necessary skills to ensure a safe environment or product for all.
You will have noted within the introduction to this letter, information that highlights our work and the numbers of ordinary UK citizens who are assisted by our services.
The work of HolidayTravelWatch has aided many holidaymakers toward a legal solution, but three times as many holidaymakers have been provided with the information and tools to resolve their own claims – these services are provided without charge to the Consumer!
It is clear that like so many issues, there are two sides to the claims debate; the making of that claim, subject to all the rigours of proving a case and, creating a political momentum that redefines the conditions in which that injury occurred. Let us not forget a simple but profound principle in English Law; if the evidence does not exist, the claim will not be successful!
The flip side to the claims coin is the realisation that business will seek where possible to avoid complying with or avoiding regulation, which then creates the conditions which lead to the failure in that product and the inevitable claims that follow. This is an area we have provided much evidence and comment upon to the Department for Business, Innovation & Skills and the DG Health & Consumer Affairs, DG Tren (now MOVE) & DG Justis in Brussels.
Take now the issue of holiday claims. This is a product that is regulated by the Package Travel Directive which was implemented into UK law by the last Conservative government in 1992. For the first time, Consumers were given the opportunity to pursue claims in their own home jurisdiction, against the tour operator, for the failings in their holiday contracts. It is now obvious that the Directive/Regulations have worked well, not just for Consumers but also for the Industry itself.
This law was created out of the need to enhance the bundled holiday product, which had suffered from poor financial protection, poor hygiene conditions, mass illness, unfair contract terms and the evasion of liability.
In recent years we are told that the Internet has created new possibilities and opportunities for the Travel Industry and that 'we are all travel agents now'! This proposition introduces the prospect that it is we the Consumers, who are organising the holiday and that the portal is not responsible for its failures. This ‘personal responsibility’ theme is also reflected within your report, but surely, if a Consumer places their trust with a Travel Provider for an advertised service/product, and the delivery of that product/service fails, how can that Consumer be held personally responsible?
An examination of any travel web-site will reveal a seamless transaction and a clever use of terminology that gives the Consumer the impression that they are buying a bundled product - the devil is in the detail of the terms and conditions; there you will discover a complete abdication of responsibility for the product!
We have discovered that there is very little difference between the Internet brochures of today and the pre-1992 brochures; all were selling Package Holidays - most were offering so-called component products. In every case, the pre-1992 brochures terms and conditions reflect the same terms and conditions found on today's websites!
Consider then the range of complaints received this holiday season from one hotel:
- Many people suffering with sickness, diarrhoea, stomach cramps & nausea;
- Many local people in resort aware of problem at the hotel;
- Travel Company Representative advised that the illness was reported all over the destination;
- Travel Company Representative advised that she did not eat at the hotel anymore;
- Holidaymakers taken to hospital;
- Holidaymakers placed on IV drips;
- Reports of holidaymakers collapsing;
- Holidaymakers vomiting in food area of the hotel;
- The staff was hostile to the complaints received;
- Staff were also ill;
- Holidaymakers returning to UK early due to illness;
- Food served outside was left uncovered for hours;
- No facilities to keep food hot;
- No facilities to keep food cold;
- Food described as warm;
- Food described as re-hashed into later meals;
- Chef observed to sneeze into glove, brush his hair, then serve guests;
- Staff in BBQ area seen to wipe their perspiration then continue to work with food;
- Glassware swilled by staff under a tap;
- Glassware had water marks;
- Drinking water obtained from a tank;
- Water was not served in sealed bottles;
- Water dispensers were filled from dirty bottles with a silver foil cap;
- Drinks dispensers described as dirty;
- Drinks described as foamy;
- BBQ was described as filthy;
- Reports of mouse droppings all over complex;
- Chicken, cockerels, birds and cats roamed the complex;
- Chicken faecal matter littered the floor of the complex;
- Dog excrement on floor;
- One cat was observed on food counter;
- Cockroaches on complex;
- Black bags of rubbish thrown into complex hedging;
- Swimming pool water reported to be pea-green;
- Reports of pot-holes around the pool;
- No depth markings for swimming pool;
- Reports of missing drain covers;
- Musty smelling rooms;
- Mould and rust in bathrooms and fridges;
- Shower leaks in hotel bedroom;
- Water from cold taps ran very hot;
- Shower water temperature described as dangerously hot;
- Soakaways were broken and clogged;
- Sharp edges to bathroom tiles;
- Bare wires exposed from air conditioning units;
- Toilets leaked;
- Report of one door frame held together with cello tape;
- Vomit stained bed linen and towels remained uncollected for days;
- Cats sleeping in unattended cots in hotel corridors;
- Reports of sewage smells on the complex;
- Returned UK holidaymakers report continued sickness.
Consider further, just on illness cases, the cost to the UK. In 2006 we carried out a survey on the cost of holiday illness and discovered that the cost of returning holiday illness could be calculated as follows:
- £37.5m borne by the Insurance Industry (Dealing with refunds on holiday illness claims);
- £12.7m borne by Individual Holidaymakers (Buying medication/products etc on their return);
- £24.9m borne by the NHS treating returned holidaymakers;
- £147.8m borne by British Industry through lost days etc
We have calculated that the cost to the UK from returning holiday illness is in excess of £222m!
Therefore, on the question of making a claim, should not UK Consumers (or for that matter UK Taxpayers) who have suffered from a failed product, be aided, supported and suitably compensated for Corporate failures, particularly where health & safety features?
Your report raises the question of whether there is in fact a compensation culture. From time to time when working in the media, we are often questioned on this issue. It is our view that this ‘tabloid’ view of litigation only serves to heighten a moral outrage that simply does not exist. We note your own report cannot find evidence to support the proposition of a compensation culture, but relies on evidence that suggests that there is a perception of a compensation culture! With respect, basing wholesale legislative and procedural change on a ‘perception’ is perhaps folly and will not in itself contribute to any real improvement within the civil litigation process. Consider then the views expressed by the Claims management Regulator in his recent Consultative document:
“Over the last year escalating enforcement action, court decisions and changes in the economic conditions has led to a contraction of some parts of the claims management industry. This contraction was most starkly realised in the last claims management regulation annual ‘renewal’ exercise, which commenced just before the start of the new regulation year, when a much higher proportion of regulated businesses surrendered their authorisation than in previous years and the average number of new applications had fallen”.
Does this sound like a legal claims industry out of control?
In our view, your comments and conclusions provide a real potential disadvantage to UK citizens, who have purchased a holiday product from a UK holiday provider. Making a holiday claim is no easy option for any UK citizen, if they have suffered illness or injury stemming from the holiday contract, they will not only have to deal with the ‘standards’ argument within a foreign jurisdiction, but also the many contractual arguments that are now presented in UK law. Stigma, fewer portals offering advices, pressures on the legal costs in these unique cases, cannot be resolved through a wholesale ‘one size fits all’ approach to the future of civil litigation. There is a world of difference between a UK claimant, pursuing a factory accident against his employer in the UK and a holidaymaker suffering illness/injury and making a claim against a UK tour operator. The UK Consumer making such a claim has to consider multi-jurisdiction, multi-defendant options, dealing sometimes with local, UK or pan EU provisions whilst grappling with the vagaries of standards and limitation problems! It is our view that in any future consideration of the civil litigation process, due regard must be had to those difficulties and the issues of damages calculations, particularly where they affect the very legal process that holidaymakers must follow.
Referral Fees/Claims Management
Since the beginning of Regulation, we have embraced those obligations and adhere strictly to its provisions. In many respects we go beyond that regulatory remit and are always open about our work, particularly where referrals are concerned.
We passionately believe that Consumers should have a choice on where they get their advices; the reduction of quango bodies, possible contraction through legal reform and a threat to referral fees reduces that very choice available to Consumers.
Many lawyers cry that but for Claims Management Companies, Consumers would come directly to them! We disagree; not everyone is confident in approaching a lawyer, many worry about the very consultative process and legal charges that follow! We provide a reassuring and balanced approach to a Consumers concerns.
I am now going to deal with several misconceptions or myths about what we do.
We provide a niche service to UK holidaymakers which is very much at a premium. We do not cold call. Consumers freely choose to contact us. We present Consumers with a choice; they can either accept or reject our recommendations. We provide detailed information to any prospective referred lawyer, providing a clear outsourcing service. We do not represent Consumers, nor do we share in any damages or costs they win for themselves. We do not interfere with the integrity or independence of the lawyer. We publish fully and openly on our website information which is associated with any referral. We do not work to any solicitors ‘targets’ and whilst we are paid on a retainer basis, the fees calculated per case fall below the Jackson recommended maximum on referral fees.
As we have already highlighted, the other aspect to our work is to collate and present the Consumer experience within the political arena, giving a voice to those who feel they have none!
Consumers are attracted to that ‘bolt-on’ service and we believe that Government and the EU Commission/Parliament respect those representations on behalf of Consumers.
We have closely followed the debate created by you and Lord Jackson on referral matters. We reject again the moral outrage on this subject, particularly as the legal industry itself, has operated on referral fees for many years before regulation. We have no doubt that if indeed referral fees are banned, the legal profession will return again to the ‘Voldemort Principle’, that is to say that the ‘R’ word will never be mentioned, but we all know the industry will need referrals and will adopt newer and more sophisticated marketing methods that lay outside the remit of regulation.
We must really move this debate away from some 1950’s idyll; the world is very different and operates on a multitude of platforms. Legal practice, whilst conservative in many aspects, is now poised to take on new challenges some of which will define its very success; will you risk the very structures that deliver real choice and talent to Consumers?
I can understand your angst on the operation of some law firms or claims management companies, but before we become too nostalgic, this is the reality we must live with; surely it is better to create a stronger regulatory environment than to ‘throw the baby out with the bathwater’?
I hope that this letter will help you understand just how important it is to establish a ‘common sense’ approach to the changes both you and Lord Jackson intend to import. I sincerely hope that whatever pressures you believe should be applied to the legal market, before any changes are made, appropriate consultation and recognition is applied for the benefit of Consumers, particularly Travel Consumers!
If you would like to discuss this further, then please do not hesitate to contact me directly.
31 January 2011