piBlawg

the personal injury and clinical negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

BBC Expose of 'Crash for Cash' Ring

For some light relief (this is being posted on a Friday afternoon after all!) any practitioner involved in PI cases where fraud is alleged could be advised as to look no further than the detailed article published on the BBC Wales’ website about a successful prosecution of a so-called ‘crash for cash’ ring, in this case an extended family. This would appear to be something of an extreme case, the publicisation of which will no doubt be pleasing to insurance companies seeking to highlight what they suggest is the prevalence of such behaviour, albeit on a less industrial scale.   The modus operandi of the Yandell family from south Wales was to submit claims for entirely fraudulent road traffic accidents replete with bogus repair invoices, hire car charge invoices and other bogus evidence as well as various friends and relatives roped in as phantom passengers. Police suspected they made in excess of £2 million over the years.   A particularly (though soberly unsurprising for anyone concerned with such claims, such as the author) runs:   “ ‘Originally they'd tried a couple of collisions to get a bit of extra cash,’ said DC Jon Parkinson. ‘They realised there was a lot of money to be made.’   The Yandells also realised that insurance companies would soon become suspicious if the same names kept cropping up on claims.To get around this, they began roping in friends and other family members. The more names and addresses involved, the less risk there was of insurance company fraud investigators smelling a rat.   It worked something like this: 1) The Yandells and their associates would invent car accidents in which one party would pose as the non-fault driver 2) The at-fault vehicle would either have high mileage or be mechanically problematic. No loss as it was worth more as a write-off and money could be made by removing parts, headlamps, gearboxes 3) The non-fault party then submits an insurance claim for damage to their car, personal injury, courtesy car, crash repairs and so on 4) The Yandells would submit fraudulent courtesy car and repair invoices to insurers 5) Other family members and friends or friends-of-friends would then be roped into the deal. They agreed to lie and say they were in the car at the time 6) A flurry of cheques follow ranging from £10,000 to £40,000 per accident - new cars, personal injury payouts, courtesy car charges and bogus repair bills   But the accident had never happened. So, before any inspectors arrived from insurance companies, the Yandells had to make sure the cars looked suitably smashed up.   The gang would damage cars with hammers, or drive cars into one another ... ”   The extensive article includes photographs and excerpts from BBC Wales' Week In Week Out current affairs programme, including footage of cars being deliberately damaged to bolster claims – to repeat, it’s really worth a read/watch!   The good news is that the report states that the Yandells have been stopped. Prosecutions were buoyed by the availability of CCTV footage as well as intelligence gleaned from social media. The BBC suggested that in total over the past five years some 83 people have been found guilty in the criminal courts for this fraud, specifically: 81 on conspiracy to defraud and two for theft. It is said that they received sentences ranging from six years in jail to suspended prison terms. Next week the final five people involved are due to be sentenced.   The article is available at http://www.bbc.co.uk/news/uk-wales-35357195.  

Prosecution of PI Fraud

Any regular reader of the PIBlawg will be aware that I have an interest in fraudulent personal injury claims, being involved as I am in numerous cases where a vast range of fraud is alleged by Defendant parties (also see http://bit.ly/1vRcuWT; http://bit.ly/1znwXHI; http://bit.ly/1GokHKm).   In recent years there appears to have been a change in culture of insurers, who are far more prepared to fight claims on the basis of that they are fraudulent. There have been many high-profile news articles suggesting that fraudulent road traffic accidents cost each motor insurance policy holder up to £100, but this is falling due to the rise in claims being run to trial alleging foul play: a pour encourager les autres approach?   The courts too appear now more prepared to commit PI fraudsters to prison, but recently the police and CPS stepped in to prosecute a man who deliberately "slipped" on a wet bag in a supermarket. Waheed Iqbal was seen on CCTV feigning a slip of a Lidl store in Bradford which is well worth a watch on the BBC website at http://www.bbc.co.uk/news/uk-england-leeds-30352231.   At trial at Bradford and Keighley Magistrates' Court, he was found guilty of two counts of fraud by false representation. He was sentenced at Bradford Crown Court to a 10-month jail sentence, suspended for two years.   The CCTV shows Mr Iqbal was wheeled out of the Lidl store to an ambulance but it is reported that an insurance fraud investigation team later found he asked the paramedics to stop before they reached hospital, alighting the vehicle unaided and returning straight back to the Lidl store to request the incident was reported.   It seemed that this may not have been Mr Iqbal’s first attempt at a false PI claim. The BBC reported that Police also discovered he staged another "accident" with a punchbag in a gym so he could make a PI claim.   This case must also represent another risk to would-be fraudulent PI litigants: even if for commercial reasons a committal is not pursued by a defendant insurer at the successful conclusion of a trial where fraud is found, the matter may well be taken up by the CPS.

Personal Injury Fraudsters Beware!

A story has been widely reported which I expect warmed the heart of many a lawyer with experience of dealing with cases where it is suspected (and nothing more than that) that a claimant party was not telling the truth about the cause of an injury.   Whilst judges in the county court are often sometimes correctly criticised for being gallingly reluctant to make findings of bad faith in anyone, the same is only rarely said for their red-robed senior brethren in the High Court. Certainly not Rafferty LJ and Singh J in the recent case of London Borough of Havering v Marc Bowyer, James Jones and Richard Bowyer [2012] EWHC 2237 (Admin).      Mark Bowyer put in a compensation claim against Havering Borough Council alleging the double fracture to his ankle was caused when he tripped over a pothole as he walked home in Hornchurch. It is reported the claim was pleaded for some £100,000. But Mr Bowyer was not telling the truth...   He actually broke his ankle when (in a state of some inebriation) he jumped off a wall after going to a party to watch England play Paraguay in the World Cup on 10 June 2006. He apparently did not expect that the most primitive of investigations as to his allegations would be undertaken by Havering BC. Whilst this underestimation may have had some foundation - as liability was initially conceded - in the subsequently obtained recording of the 3am 999 call James Jones, Mr Bowyer’s friend reported he had indeed 'jumped off a wall'. The ambulance reports recorded that Mr Bowyer was found some considerable distance from the alleged offending pothole.   Four years later Mr Bowyer and/or his legal representatives clearly realised that there was a considerable “hole” in the evidence (or lack of one). Proceedings were eventually discontinued by Mr Bowyer in October 2010, however Havering BC brought proceedings for contempt of court.   In the Administrative Court last week Mr Bowyer pleaded guilty and on 27 July 2012, was jailed for two months. Mr Jones, who despite what he told the 999 operator, backed Mr Bowyers fraudulent claim also pleaded guilty and was jailed for one month. However Mr Bowyer’s father Richard Bowyer, who was found to be the principle driver of the claim, was jailed for four months after being found guilty of contempt of court.   Certainly, following on from the case of which I wrote about in March of this year (see http://www.piblawg.co.uk/post/2012/03/01/RTA-Fraudsters-Beware!.aspx) it can only be a good thing that the courts send out the strongest possible messages in the form of stiff prison sentences to those expecting to be able to prosecute fraudulent claims. And “hats off” to Havering BC whose actions will hopefully “encourager les autres”!

Faking it – lies, fraud exaggeration and abuse of process

In a truly Phyrrhic victory for the Defendant, the Supreme Court has just handed down a judgment overruling Ul-Haq v Shah and Widlake v BAA. In Fairclough Homes v Summers [2012] UKSC 26 the Supreme Court held that it is open to a judge to strike out a fraudulently exaggerated claim on grounds of abuse of process, even after judgment on liability and where it is possible to assess the damages to which the claimant would otherwise be entitled. But the Supreme Court considered that it would only be appropriate to do so in very exceptional circumstances. The circumstances of this case were not exceptional enough and the case should not be struck out.

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Supreme Court appeal on striking out fraudulent claims

  Should a claim be struck out in its entirety if it is substantially fraudulent? That was the issue considered by the Supreme Court last week in Fairclough Homes Limited v Summers. The appeal arose out of a commonplace employers liability case. Mr Summers slipped on a defective step whilst descending from a stacker truck. He fell to the ground, thereby breaking his right hand and suffering a serious fracture to his left ankle.  After a finding of liability in Mr Summer’s favour, a quantum hearing was held, at which Fairclough Homes Limited relied on video surveillance evidence. This evidence disclosed that Mr Summers, in the words of Ward LJ was “an out-and-out liar, who quite fraudulently exaggerated his claim to a vast extent”. One of the ways in which he attempted to mislead the court was in claiming future loss of earnings by stating that his injuries kept him from working as a kitchen fitter. However, the video evidence displayed the falsity of this assertion in all its technicolour glory with scenes of Mr Summers driving a van, which advertised kitchen-fitting services along the side.   The trial judge determined that his genuine losses amounted to £88,000 – much less than the figure claimed. Fairclough Homes Limited appealed on the grounds that the judge should have struck out Mr Summers’ claim in its entirety, despite that he had suffered a genuine injury, because of his lies.  The Court of Appeal rejected the appeal on the basis that point had already been decided in the negative in Shah v Ul-Haq ([2009] EWCA Civ 542). The Court distinguished Arrow Nominees v Blackledge ([2002] 2 BCLC 167), on the ground that in the instant case the trial judge had been able to make findings as to the extent of genuine loss whereas in Arrow Nominees, the extent of the fraud made it impossible to do justice.  Last week the Supreme Court heard arguments about the increase in the number of fraudulent cases and the failure of the costs regime to deter such claims. It remains to be seen in what circumstances, the Supreme Court will identify a jurisdiction to strike out fraudulent claims either under CPR 3.4(2)(c) or otherwise. There is no doubt that defendant insurers are praying that the Justices will rule, as Ward LJ referred to it, “on the side of the angels”.    

RTA Fraudsters Beware!

As I expect many will agree, there has been a recent upsurge in the past 12 or so months in cases of alleged fraudulent accidents coming before the courts. Are these sorts of accidents becoming more common? Or are insurer’s simply getting tougher and more bullish in alleging fraud? I think the answer is possibly “both”. There are some typical hallmarks of these sorts of fraud which can often be easily observed on a reading of the papers. Further research into a party’s (and often their relatives’) claim history can be very illuminating.   But of course such fraudulent claimants should be aware, it seems that the High Court also wishes to send a message out to them that they too are getting tougher on ‘this sort of thing’.     The Administrative Court (Sir John Thomas and Silber J) gave judgment yesterday in Liverpool Victoria Insurance Company Limited v Bashir & Ors. This case was a fairly standard sort of fraudulent motor insurance claim – a contrived accident between parties (a husband and wife inviting the involvement of acquaintances) who agreed to share any profits from the multiple claims for personal injuries and special damage. What was slightly more unusual in this case (and from some experience, I stress the “slightly”) was that the parties were prepared to involve their two children, one of whom was only 4 months old.   What perhaps is genuinely more unusual is that in the course of the proceedings, the Respondents admitted the claim was fraudulent.   In a move which could only be welcomed by insurers, the court held that it had no option but to impose an immediate custodial sentence upon the fraudulent (adult) parties, in the interests of the public at large and in deterring such conduct in the future. The court would have imposed a sentence well in excess of 12 months but took into account the fact that the Respondents’ admitted the fraud, and that the husband and wife assisted Liverpool Victoria with the disclosure of documents. On these Respondents, the court imposed a sentence of 6 weeks imprisonment. On the other Respondents the same sentence was imposed, but was however suspended to reflect the fact that the husband and wife had induced them into being involved.

Whiplash: Again ...

A short article in yesterday’s Guardian caught my eye (Let’s not add insult to personal injury: 20.2.12). It wasn’t the author’s commentary on David Cameron’s recent “Insurance Summit” that attracted my attention (see, Laura Johnson’s PIBLAWG piece a week ago). It wasn’t the reporting of the statistics, although it has to be admitted that these are eye-popping (the CRU apparently reports a 52% increase in reporting of motor personal injury claims – up to 790,999 claims in 2010/11. The reported statistics are not consistent, but everyone seems to agree that there has been an increase in claims and, er/um, the increase has been massive: can we believe that all of these claims are entirely genuine?) Instead, my eye was drawn to the following, “The practice of insurers making a compensation offer to injured people before they have even had a proper medical examination has become more widespread, and they are trying hard to get to third parties quickly and settle their claims before they have gone to a solicitor for independent advice. This all encourages people to have a go. Why, instead, have insurers not challenged in court claims they believe to be bogus? Interestingly, one outcome of the Downing Street summit was a commitment that they will. [emphasis added by me]” It remains to be seen whether the insurers’ “commitment” proves to be real, but we probably all know why such claims are not contested to trial. First, by the time that a modest whiplash claim comes to Court, the costs will usually have outstripped by a considerable margin the amount that is at stake in the claim itself: an obvious reason why insurers will instead seek to settle claims early – even those that are believed to be bogus (indeed, contesting a bogus or fraudulent claim will generate greater costs than taking issue with discrete aspects of a claim believed to be genuine). The problem, of course, with paying Danegeld of this kind is that it simply encourages more claims – as the statistics referred to above make clear. It also removes work from solicitors, although insurers probably won’t lose any sleep over this. Second, it is not easy to satisfy a Court that a claim is bogus; most Judges will apply – whether or not this is acknowledged – a Hornal v Neuberger Products [1957] 1 QB 247 approach to any allegation that a claim is bogus/fraudulent and will require a quantity of cogent evidence in order to find such allegation proved. Some medical expert witnesses are adept at finding a whiplash injury in factual circumstances where it would be surprising (at least to the lay person) that a Claimant had sustained any injury at all. Where such medical evidence is available, it is not easy for the Defendant to challenge this without incurring speculative costs. The result is that, by a default process, the claim will succeed/be settled. Third, it has to be said (on the finest anecdotal evidence) that on occasions the Courts have encouraged questionable claims. One is reminded of the increasing volume of highway tripping claims (some decades ago); the advancing tide was only retarded when the higher Courts started to dismiss these claims and provided guidance on what needed to be proved in order for the Claimant to succeed. If the Judiciary had been less credulous as to whiplash then we might all – genuine Claimants and insurers alike – have been in a happier position. If the Guardian piece is to be believed, we seem now to be reaching a position where only the bravest insurer would challenge a whiplash injury claim at trial; it will be interesting to see whether recent Government action will make any difference.  

RSA Repair Costs - an end to the saga?

There has been a significant and until now unpublicised development in the long-running line of case concerning inflated repair costs claimed by RSA.   Well, as the judgment is on BAILII and publicised on the Judiciary Website, this is not quite an exclusive, but it is close!   Judgment was handed down in Kevin Fallows v Harkers Transport on Friday 2 September 2011. It came to my attention appearing at a trial the day before, when the district judge I was appearing before hinted very strongly that HHJ Platt in Fallows had come to a very firm decision in a case which should put this matter to bed. For what it is worth, the district judge in my case held that in his view these cases "were tantamount to fraud" and that counsel should go outside and "talk". The matter was settled by consent.   HHJ Platt, sitting at Romford County Court sought to clarify the situation as to various standard charges RSA was routinely claiming from defendant insurers, pursuant to an arrangement whereby their clients’ motor repairs were carried out by a subsidiary company. The judgment is somewhat scathing of this approach and suggests that simply this is a matter of the trite law of causation; reasonableness; mitigation and simply the obligation upon a claimant party to prove its loss.   The judge is also scathing as to the frequent refusal by RSA to disclose any proper invoices from repairing garages. The Judge held that by redusing to do so, the cases had little chance of settling without requiring a trial. At paragraph 60, the court held: “The court is left with the clear and unhappy impression that the provisions of CPR r 1.3 have simply passed by RSA and its solicitors unheeded both in this case as in others, and they remain in a mindset where the obligation to make proper disclosure is some kind of optional extra.”   Is this an end to the saga? HHJ Platt clearly intended his judgment to constitute some kind of final word. He held at the final paragraph that: “Although this is not a binding judgement in terms of the rules of precedent it carries a degree of authority which requires claimant's solicitors and advocates to carry out their professional duty to the court by bringing the judgement to the attention of any judge before whom they appear in any subsequent case in which these issues are litigated. Failure to do so may lead to costs orders under CPR 44.14.”   Read all about it at http://www.bailii.org/ew/cases/Misc/2011/16.html

The Fashion for Fraud

It is a fact of life for the personal injury lawyer that fraud will raise its ugly head from time to time whether one acts for claimants or defendants.  I have observed an interesting shift over the decade I have been in practice.  Ten years ago judges seemed not only uninterested in suggestions of fraud, but many appeared to find the concept positively distasteful.  I have had judges make frankly bizarre findings about what your average person can be "mistaken" about, in order to avoid finding them liers...More...

Fraudulent personal injury claims and contempt of court

 Mrs Justice Cox has reminded us of the test and standard to be applied in applications for committal for contempt of court arising out of allegedly fraudulent personal injury claims.  In Montgomery v Brown [2011] EWHC 875 the Defendant made a range of allegations that C had lied about a substantial loss of earnings claim.  Mrs Justice Cox confirmed the test that a person is guilty of contempt of court if, in legal proceedings, he interferes or attempts to interfere with the administration of justice. Putting forward a dishonest claim, suppressing documents which should be disclosed and making false statements of truth were all examples of contempt. The court had to be satisfied, to the criminal standard, that the statements made by C were false, that he knew them to be false when he made them, that at the time they were made they would have, if persisted in, been likely to interfere with the course of justice in some material respect and that he knew that they would be likely to so interfere (Kabushiki Kaisha Sony Computer Entertainment Inc v Ball (Contempt of Court) (2004) EWHC 1984 (Ch) applied).   On the facts, contempt was not made out; however the case is a useful reminder of the test to be applied and the standard it must be proved to.