Thursday, 22 December 2011
Watch out! The insurers are after you! Ali v. Esure Services Ltd.
The insurance industry's worst kept secret is that there is a boom in fraudulent claims. It seems that most insurers now have fraud investigation departments who are increasingly active in hunting down dubious or downright fraudulent claims. And why not? Fraudulent claims are criminal and result to some extent or another in increased premiums for the average consumer. Fraudulent claimants cause genuine ones to run the gauntlet of intrusive questions and enquiries by insurers.
Esure has just gained the distinction of a Court of Appeal judgment arising from an alleged accident in the town where my office is, Huddersfield. The report is on a technical legal point which has little general interest but you can read it here:-
The story behind it, though, is much more interesting. The Claimant was represented by solicitors in Bromley, Kent, despite the fact that the accident took place hundreds of miles away and despite Huddersfield being perfectly well supplied with PI lawyers. Nothing too novel about that though. A claim was issued in Medway County Court, later transferred to Huddersfield, and Esure defended it on the basis that they were not in fact the insurers of the named Defendant. So after the filing of the Defence in August 2009, the Claimant discontinued the action by a notice of discontinuance. There things lay until September, when Esure applied to revive the action. Now this seems on the face of it rather odd. After all, they had got out of the case, so why get it going again? The answer lies in what happened next.
Once the trial of the claim had taken place, with the Claimant, unsurprisingly, not taking any part and the claim being dismissed, Esure applied to transfer it to the High Court for their application to commit the Claimant to prison for contempt. They said that the Particulars of Claim were in reality a sham. They pointed to the provisions of CPR Part
32.14, which provides that:-
"(1) Proceedings for contempt of court may be brought against a person if he makes, or causes to be made, a false statement in a document verified by a statement of truth without an honest belief in its truth."
In other words, if you make a claim which may be fabricated, don't assume that it's pretty much risk free. You may secure a no win no fee deal with your lawyer but the statement of truth is not an empty formality. The Claimant is alleged to have authorised the Particulars of Claim, complete with statement of truth, it is said, and containing particulars which were untrue. Now as yet we have no idea whether this attempt to send him to prison will succeed. The Claimant has made it clear that he will defend it and denies authorising anything. What is quite sure, though, is that he is bound to experience many sleepless nights awaiting the trial and its outcome.
The gauntlet has been thrown down by the insurers – if you thought you were in for a free ride, think again!