Dan McCauley investigates how to tackle fraudulent claims based on intentional collisions.
The recent trial of Rashid Shaikh has seen the issue of motor fraud raise its head again. Although Mr Shaikh was cleared of making a fraudulent insurance claim following a crash, the driver, Mohammed Patel, previously admitted to conspiracy to defraud. The court heard that Mr Patel had made a profit of £46.000 by staging 92 collisions in three years. Yet despite heightened security, fraud is still slipping through the net, as Mr Patel demonstrates.
Fraud is on the increase
According to the Insurance Fraud Bureau (IFB), ‘crash for cash’ car crime is on the increase. The perpetrator targets an innocent motorist, often someone seen as vulnerable, such as a mother with children, or an elderly driver. The fraudster creates an accident by braking suddenly so that their car is shunted from the rear by the victim’s vehicle. Insurance details are exchanged and the fraudster then claims against the insurer for damage to the vehicle and injuries that were never sustained, sometimes even inventing injured passengers.
The IFB, funded by insurers, was set up to 2006 to fraud. That year, it set up a telephone service for tip-offs about suspect claims. It has since received more than 2,000 reports. Another factor in combating this type of fraud is witness evidence. Indeed, in the Patel case the authorities were alerted by office workers who could see the roundabout on which numerous ‘accidents’ had occurred, and noticed that one driver in the crashes was always the same man.
Insurers and their advisers also have access to the Claims Underwriting Exchange (Personal Injuries) database. The information on this database is provided by insurers and other compensators, and each record relates to a single claimant. The database provides claims histories, so a search may reveal related claims and identify patterns of similar claims against other insurers or compensators. It can also be used to make ad hoc enquires (e.g. it would allow a search to ensure that there are no previous claims involving the same witness and claimant).
Claimant must be put on notice
The court of Appeal has laid down rules for those who wish to allege that a road traffic accident was so minor that it could not have caused injury. Claimants must be told that causation will be investigated when there is suspicion that the ‘accident’ is an act of deliberate insurance fraud. Often the impact damage is so low that it is difficult to envisage that any injury could have been sustained. However, failure to notify the claimant that this point will be raised may prevent the defendant from getting permission to rely on expert evidence, which can be crucial to a successful defence. Accordingly, insurers and their claims speedily, and ensure that a low-velocity impact defence is considered at an early stage.
Full access to a claimant’s hospital and GP records is often crucial for an insurer’s defence. A claimant’s assertion that a particular accident was their first might be contradicted by their records, which can help to challenge both causation and a claimant’s credibility.
Given the economic downturn, incidents of fraud will increase. Although organised motor fraud is difficult to tackle, insurers and their advisers can adopt strategies such as those outlined above. In the long term, this will save money and reduce individual insurance premiums.
Dan McCauley is a solicitor in the commercial insurance team at Weightmans.