Ministers have stepped in to help prevent the growing trend of false food poisoning claims by Brits taking overseas holidays.

Last month it was revealed there has been a 500% increase in the number of compensation claims for holiday sickness since 2013.

But the number of sickness cases reported in resorts has fallen or remained the same, meaning the epidemic is only associated with UK holidaymaker. It is believed the claims are being pushed by unscrupulous touts operating in European resorts.

The false claims have two detrimental effects; damaging Britain’s reputation overseas and driving up holiday costs. This is because many tour operators are settling these gastric illness cases out of court so the costs to the industry are increasing. These costs will ultimately be passed onto consumers.

One of the barriers to tackling the issue is the fact that these claims are taking place overseas where legal costs are not controlled. Tour operators who fight claims can see their costs escalate beyond the actual damages claimed.

Ministers said they want to reduce cash incentives to bring spurious claims against package holiday tour operators. Under these proposals tour operators would pay a prescribed sum depending on the value of the claim, making the cost of defending a claim predictable.

‘A loophole is being exploited in foreign holiday claims’

Justice Secretary, David Lidington, said: “Our message to those who make false holiday sickness claims is clear – your actions are damaging and will not be tolerated.

“We are addressing this issue, and will continue to explore further steps we can take. This government is absolutely determined to tackle the compensation culture which has penalised the honest majority for too long.

“A system to control costs already exists for most personal injury claims in England and Wales, but a loophole is being exploited in foreign holiday claims.”

The group of MPs has asked the Civil Procedure Rule Committee, which is responsible for setting rules on legal costs, to look urgently at the rules governing the costs of holiday claims.

It wants to see fixed recoverable costs be extended to cover claims arising abroad, closing the loophole and subjecting pay-outs for tour operators to stricter controls. It said the vast majority of holidaymakers will not make false claims, and those with genuine claims will still be able to claim damages.