Transport CommitteeSupplementary written evidence from True Personal Injury Solicitors (WL 59A)

I am writing to you again about one particular issue that has been overlooked during the consultation process, and this concerns the heavy handed practice adopted by many insurance companies of alleging or insinuating fraud where no evidence exists.

There is no doubt that some claimants pursue fraudulent claims. I know this because during the 20 years I have been practising as a claimant lawyer I have had the misfortune to occasionally represent claimants who, based upon the evidence that was obtained during their claim or at trial, were found to be pursuing false claims. The outcome for those claimants was justifiably harsh in that they were ordered to pay all of the defendant’s considerable legal costs, which in those cases ranged from £5,000 to £20,000.

However, I have also acted for many claimants whose legitimate claims have been rejected because the defendants’ insurance companies, without evidence or justification, suggested or alleged that their claims were false.

In one case my client and his family were returning home at midnight after visiting friends when their car was hit in the rear by another vehicle. The force of the collision was severe, causing their vehicle to be written off, and injuring my client and his passengers. Although the defendant admitted responsibility for the accident, his insurance company questioned the validity of the claims on the basis my client’s vehicle was old and in poor condition, that he sold his damaged vehicle shortly after the accident, and because the defendant could not accurately describe the occupants of my client’s vehicle. The defendant also questioned what one of my client’s passengers was doing at the accident location at that time of night when she was the mother of a young child. Needless to say the case proceeded to a full trial where the claimant and his passengers were fully vindicated and the defendant was ordered to pay substantial damages and costs.

In another case my client, together with his wife and teenage son, were injured when their vehicle was rear-ended by another vehicle as they slowed down to negotiate a tight bend. Even though the other driver admitted he was responsible for the accident, their claims were rejected by the defendant’s insurance company on the basis my client’s son knew one of the passengers in the other vehicle, and because they had obtained evidence that suggested to them that my client and his family had been involved in 21 other accidents.

Whilst my client and his family (not unlike a significant proportion of the population) admitted to having had other accidents in the previous 10 years, they had had no involvement or connection whatsoever with most of the accidents referred to by the insurance company. My client continued with his claim, notwithstanding the risk of incurring considerable legal costs, and was eventually successful with his case settling just before trial.

And in another case my client and his family were visiting a disabled relative when their car was hit by a vehicle which failed to stop at a give-way line. The force of the collision was enough to write off my client’s car and to injure my client and his passengers with all of them requiring medical treatment. In this case the other driver’s insurance company rejected the claims and said the accident was “indicative of a staged/contrived accident in that it is said to have involved multiple occupants, on journeys for no discernible reasons, involved in an accident for no discernible reason resulting in multiple personal injuries...”. My clients were justifiably upset and angry; not only had they been injured as a result of an accident that was not their fault, they also had to suffer the indignation being labelled fraudsters. Court proceedings were issued but shortly before a full trial, and no doubt after realising the Claimants would not be browbeaten, the insurance company settled the claims.

The point I am making here is that whilst there are no doubt a significant number of fraudulent claims, there are, in my experience, many claims that insurance companies categorise as fraud without any proper evidence or justification. I am also in no doubt that when representatives of the insurance industry told the Transport Select Committee that 7% of all claims were fraudulent, this figure included claims, such as those I have described above, that were assumed to be fraudulent because they had characteristics in common with the insurance companies fraud indicators (eg multiple occupancy, accident late at night, ethnicity, age of claimant’s car etc).

The insurance industry’s fraud statistics will also include legitimate claims where fraud is alleged or insinuated by an insurance company but where the claimant, having been properly advised of the consequences of pursing a fraudulent claim, decides not to continue. When an insurance company states or implies that a claim may be fraudulent, a solicitor acting for a claimant must advise them of the consequences of pursuing such a claim. These consequences are that if the claim is found to be fraudulent the claimant could face criminal proceedings and a prison sentence under the Fraud Act, and furthermore they would be personally liable to pay all the legal costs which could easily exceed £20,000.

In my experience, when faced with these consequences, there are very few genuine claimants who are brave enough to continue with their claim.

As I have said, there is no doubt that some claimants pursue fraudulent claims and, as is the case, they are and should be severely punished, however the problem is not as wide spread as the insurance industry alleges. The insurance industry’s claim that 7% of injury claims are fraudulent simply cannot be accepted because, for the reasons I have set out in this letter, it is not based on any valid or reliable evidence and is, quite frankly, nothing more than an underhand attempt to persuade the government to raise the small claims limit and thereby deny proper access to justice to thousands of injured claimants.

It amazes me that the insurance industry, which though it’s miss-selling of insurance products on an industrial scale, such as payment protection insurance and endowment polices, has demonstrated that it cannot be trusted in its dealings with the general public, is treated as a credible witness in this matter.

June 2013

Prepared 29th July 2013