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.  

Scrutiny of Medical Evidence & Physiotherapy Charges in low-value PI cases

I recently acted for an insurer in a routine low value personal injury case (to which QOCS applied) which had an unusual twist.   The claimant claimed damages for neck injuries sustained in a road traffic accident. He signed the Particulars of Claim which were vague as to the description of his injury, but which made reference to an appended medical report. The medical report was of the lamentably short “tick box” variety and concluded that the claimant had sustained a “soft tissue neck injury which resolved in around five months”. At the time of the examination by the GP expert around three months post-accident, the claimant complained of some ongoing symptoms.   Well, the Claimant’s social media persona begged to differ. The Defendant’s online sleuths obtained evidence that the Claimant actually undertook a half marathon a few days post-accident and an ‘Iron Man’ a few weeks after that. This was at a time when the medical report suggested that the Claimant’s symptoms were most acute (“moderately-severe” – whatever that means!).   The Claimant submitted a Notice to Discontinue.   His solicitors came off the record as acting for him.   The Defendant applied to have the Notice of Discontinuance set aside.   On the day of the listed hearing, the Defendant’s solicitors received a remarkably candid witness statement from the Claimant, who had procured the services of a direct access counsel. This expressed a great deal of regret for what had occurred and made a large number of serious allegations against the claimant firm of personal injury solicitors including: that the firm aggressively pursued the Claimant to encourage him to litigate when he was reluctant; indeed, that the firm “reminded” him that he may have sustained an injury despite his being unaware of it at the time and/or drawing any causal link with the index accident; that despite the Claimant telling the firm that his injury resolved in “about one week” she was pressured into attending physiotherapy sessions; the said physiotherapy sessions were arranged by the solicitors without any reference to any medical opinion; and he was persuaded to sign the Particulars referencing the medical report despite knowing the conclusion of the doctor therein to be incorrect. (This does not explain the complaints of ongoing symptoms however!).   The Claimant settled with the Defendant insurer with a Strike Out on the grounds of Abuse of Process by consent ant the payment of costs, however the case throws into an unpleasantly harsh light the tactics which many who may represent insurers and indeed the insurers themselves have long since suspected are employed by some less scrupulous law firms.   The lesson for such firms is of course obvious, but those for legal professionals representing defendant parties can be distilled thus in cases where the medical evidence appears formulaic (i.e. in the majority of routine Fast Track cases, particularly now costs for the provision of such evidence have been limited by the CPR): defendants should be less prepared to accept the conclusions of medical professionals as face value; claimants ought to me more rigorously cross-examined on the duration and significance of their symptoms; charges for physiotherapy charges should be more stringently scrutinised. These frequently are “evidenced” by invoices made out to the solicitors. Without further evidence of under what mechanism the claimant party is expected to meet these, they are arguably unproven losses. This may raise consumer credit points of course and potentially wider issues in cases where it transpires there is a connection between solicitors and physiotherapy providers. In my experience it is not unusual for the claimant to deny receiving such treatment or as many sessions as claimed for; the chronology also should be more carefully looked into. Perhaps Part 35 Questions should ask when was physiotherapy recommended and by whom? If it was the (medically-unqualified (and often formally legally-unqualified) “solicitors”, can the fact that a subsequent medical report makes reference to this in the “treatment received” section, undermine such a report or seriously be said to pertain upon its conclusion?

Liability of a Motor Insurer for Criminal Acts

CASE REPORT:-      AXN & Ors v (1) John Worboys (2) Inceptum Insurance Co Ltd (formerly HSBC Insurance (UK) LTD) [2012] EWHC 1730 (QB)   The preliminary issues concerned whether, and to what extent, the claimants had, in addition to their claims against Worboys, valid causes of action against the defendant insurer as the provider of the compulsory motor insurance required by the Road Traffic Act 1988. His insurance policy provided cover for "social, domestic and pleasure purposes and for use for public hire".   The Court was asked to determine whether: (i) the bodily injuries suffered by the claimants "arose out of the use of Worboys’ vehicle on a road or other public place" within the meaning of s145(3)(a) of the 1988 Act; (ii) liability in respect of Worboys’ acts of poisoning and sexual assault was required by s145(3)(a) to be covered by a policy of insurance, and was covered by the policy issued by his insurer; (iii) Worboy's use of the vehicle at the material times was a use insured by the policy; (iv) the insurer was liable pursuant to s151 to pay to the claimants any sum payable pursuant to a judgment obtained against Worboys. Mr Justice Silber determined this preliminary issue in favour of defendant insurer. The Court held: (1) the claimants’ injuries were caused by the criminal acts of Worboys in administering sedatives and then in attempting to or actually assaulting the claimants, and did not arise out of the use of the taxi on a road; (2) as the injuries sustained by the claimants did not arise out of Worboys' use of a vehicle on a road and so they were not required by s145(3)(a) to be covered by insurance;  (3) if the essential character of the journey consisted of use for a criminal purpose then the vehicle would not be covered by its insurance (Caple v Sewell [2011] EWCA Civ 1948). By the time that the claimants were sedated and assaulted, the essential character or purpose of the journey was criminal and the use was not covered by the insurance; and  (4) therefore having regard to the answers to the first three issues, the insurer was not liable, pursuant to s151, to pay to the claimants any sum payable pursuant to a judgment obtained against Worboys.

A catastrophic getaway

  Mr O’Brien and his nephew Mr Joyce must be amongst the most incompetent thieves around. They stole a ladder from the front garden of a house and put it into the back of the van but could not close the door. Mr O’Brien drove the van off to make a speedy getaway whilst Mr Joyce hung onto the back of the van, standing on a footplate with the ladder under or over his right arm. He was holding onto the door or roof whilst a door was flapping around. The van lurched around a bend without reducing speed making Mr Joyce yet more unstable. Finally, on another bend he lost his grip, fell and suffered a severe head injury. Mr O’Brien seemed more concerned about trying to hide the ladders than helping his nephew. His excuses for the accident were inconsistent, ridiculous and not worthy of a schoolboy. He said that he did not know that his nephew was hanging onto the rear of the vehicle by the doors or ladders, that his nephew clambered through the back of the vehicle to secure the doors which had come open, that he was riding on the footplate as a ‘joke’ and that his nephew had got out of the van to secure the doors and was not on it at the material time. The judge commented that it was no surprise that nobody wished to call him as a witness or rely upon his evidence. The case was Joyce v Tradex Insurance Company Limited [2012] EWHC 1324;  the issue was whether Mr Joyce could recover damages for personal injury from Mr O’Brien when the claimant was injured whilst both were engaged in a joint criminal enterprise.   Cooke J found that Mr Joyce’s injuries were caused by the speed of the vehicle (essential to the getaway) and his position on the back of the vehicle (holding the ladders and the van whilst standing on the footplate). What Mr Joyce had done was so unusual as to be as causative of his injuries as Mr O’Brien’s driving. Accordingly the claim failed on causation. The claim also failed as a matter of general public policy: a participant in a joint enterprise theft which involves a speedy getaway in a van with a participant driving and the other clinging dangerously to the stolen items and the van cannot recover for injuries sustained in the course of that enterprise. The driver could not owe a duty to his co-conspirator and it was not possible to set a standard of care. What’s more, risk and danger were inherent in the enterprise. Accordingly Mr Joyce’s own criminal conduct precluded him from recovering. (Image Courtesy of Freefoto.com)  

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.

A Tale of Two Defences: Drugs, Ex Turpi Causa and the Uninsured Drivers Agreement

What’s the scope of the “criminal conduct” exception in the Uninsured Drivers Agreement and how does it relate to the principle formally known as ex turpi causa? This was the issue before the Court of Appeal in Delaney v (1) Pickett (2) Tradewise Insurance Services Ltd [2011] EWCA Civ 1532. C was a passenger in D’s vehicle and was badly injured because of D’s negligent driving. Substantial quantities of cannabis were found on the parties after the accident, and the judge found that C and D had travelled together to buy and then transport cannabis for subsequent resale. D defended the claim, relying on ex turpi causa. In the mean time, D had confessed habitual drug use to the police. His insurers discovered this and successfully took proceedings to avoid his insurance policy for material non-disclosure. Under the Uninsured Drivers Agreement the insurer was potentially liable to satisfy the judgment as road traffic accident insurers. But the general duty to indemnify is subject to a number of exceptions, notably Paragraph 6(e)(ii), where “a claim which is made… by a claimant who… was voluntarily allowing himself to be carried in the vehicle and… knew or ought to know that… the vehicle was being used in the course of or furtherance of a crime”. Insurers argued that this clause should be given a literal construction: the vehicle was being used in the process of committing the crime and as part of the carrying out of criminal activity. Both defences succeeded at first instance, and C appealed. The Court of Appeal disagreed with the judge’s conclusion on ex turpi causa. Following Gray v Thames Trains [2009] 1 AC 1339 and Pitts v Hunt [1991] 2 QB 24: This was not a case where the Court could not determine a standard of care for D’s driving, unlike (say) a getaway car.       This was not a case where liability would be an affront to the public conscience.  The crime provided the occasion for the accident rather than actually being the cause of it. The immediate cause was D’s negligent driving, and not the crime. The illegal acts were incidental.    Given the size of this claim, success against D would be cold comfort unless the insurers were also liable. So where did this leave the insurer’s argument? Was the exclusion under Paragraph 6(e)(ii) wider than the ex turpi causa defence?   Their Lordships were all agreed that, taking a literal reading of the clause, (on the judge’s findings) to C’s knowledge, the vehicle was indeed being used “in the furtherance of crime”. But this would mean a very wide exception, and potentially prevent recovery even where the crime in question was very minor – for example speeding, or possession of a small amount of a controlled drug.    Ward LJ’s answer was that the exception should be “proportionate” and was limited to “serious” crime of the sort that would give the driver a defence of illegality: this crime was not “serious” enough and the exception should not apply.   The majority (Richards and Tomlinson LJJ) did not agree. Their reasoning is not consistent, however:- Richards LJ considered there was a de minimis exception, but that possession with intent to supply was certainly serious enough. The use of the vehicle did not have to constitute an ingredient of the offence for the exception to apply.   Tomlinson LJ took a firmer line. Use of the vehicle was not incidental to the crime, it was an integral part of it. Whilst the literal reading of the clause could lead to recovery being denied where the crime was minor, it was not appropriate for the court to make a value judgment about the seriousness of the offence, which was irrelevant to the criteria for liability under the agreement. Tomlinson LJ did not endorse the de minimis exception. This case underlines that the ex turpi causa defence will rarely succeed. But exceptions to liability under the Uninsured Drivers Agreement will succeed far more often. When these succeed, the cause of the accident may well be nothing to do with the circumstance prohibiting recovery – for example that C knew (or ought to know) the vehicle was stolen, or that D was not insured. In those cases, blameworthiness on C’s part is not “the touchstone of recovery”. However, if insurers use this decision to argue more frequently that there should be no recovery by reason of very minor crimes, it is likely that pressure will mount for a change to the 1999 Agreement.