The rise of fraudulent compensation claims

With the political spotlight on the so called “compensation culture” and numerous news stories appearing in the press about “crash for cash” road accident claims, the courts are showing a greater appetite for giving prison sentences to claimants making fraudulent or exaggerated claims.

The tide began to turn in July 2010 when, in a case called Barns v Seabrook and others 2010 EWCH 1849, the divisional Court held that one party to County Court proceedings was entitled to go to the divisional Court to apply for a Committal Order for Contempt of Court where there was evidence of fraud.  There have been two other recent decisions which demonstrate the courts are getting tougher.  In MIB v James Shikell and others (March 2011) the claimant was sentenced to 12 months in prison for Contempt of Court.  He had sustained orthopaedic injuries and a possible head injury in an accident and submitted a £1.35m claim against the Motor Insurers’ Bureau, claiming to be suffering from extreme fatigue, physical restrictions and reduced levels of concentration which prevented him from playing football.  The insurance company who acted for the defendant obtained video footage of him taking part in a football game.  The Judge said she was satisfied that the only reason for him telling lies about his physical abilities was to increase his award of damages.  Mr Shikell’s father also received a 12 month sentence as he assisted his son in providing supportive witness statements and had heard false reports made by his son.

In Neil v Loveday the defendant was granted permission to take legal action over a personal injury claim brought by Mr Loveday in which he had exaggerated the extent of the back injuries suffered. Mr Loveday had claimed damages amounting to a six figure sum which he said arose from a road traffic accident, alleging he could not work or drive, that he often had to use a wheelchair and had to be cared for by his wife.  His wife gave a supporting witness statement.  The insurance company obtained surveillance footage which showed Mr Loveday was far more active than he claimed and a settlement of £1,850 plus costs of £1,570 was reached.  The insurance company applied to have him committed for Contempt of Court, which resulted in Mr Loveday receiving nine months in prison and Mrs Loveday a suspended sentence for supporting him.

It is hoped that these cases will deter those attempting to commit insurance fraud.  The approach of the courts is to be welcomed by all those who are involved in personal injury claims.

For further advice contact Nadina Edmondson on 01245 453728 or email nadina.edmondson@birkettlong.co.uk
 

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.