The biggest accomplishment in the battle against claims fraud should be realised in April 2020 with the introduction of the full range of reforms to the whiplash claims process. The introduction of tariffs for whiplash injuries and the expected increase in the small claims track are squarely aimed at discouraging claims which have made the UK the 'whiplash capital of Europe'.

However, this success should not mean that insurers and defendant representatives can rest on their laurels. Fighting fraudulent claims remains high on the agenda, and the fraud team at Clyde & Co have continued to be at the vanguard of these efforts, securing several major victories ranging from pre-action to Trial successes, providing precedent for dealing with fraudulent claims.

In a case believed to be the private prosecution by an insurer for public liability fraud, Clyde & Co acted for Aviva in bringing a 'slip and trip' fraudster to justice. Farida Ashraf's wholly dishonest and fraudulent claim for £60,000 had been dismissed in 2016, when CCTV footage revealed two female accomplices placing a pallet of orange juice cartons on the floor of a supermarket so that Ashraf could pretend to stumble over it. She was sentenced to a suspended jail sentence of 21 months.

Moving from multiple accomplices to multiple identities, our investigations in another claim resulted in a government lawyer being sentenced to 8 months in prison for contempt of court. The claimant, Muhammad Bilal, used a complex web of connections and false identities to successfully ensure that an accomplice received compensation, before pursuing his own claim. This was struck out for dishonesty. Due to his position, it was deemed in the public interest to pursue a contempt of court finding.

Our success last year in applying for the committal of three parties for contempt of court demonstrated that the historic and restrictive use of committal proceedings where claimants have lied in the face of the Court at trial has changed. Our success demonstrated that a claimant who knowingly pursues (and issues) a fraudulent claim is likely to receive a custodial sentence; the balance has been tipped further into the favour of insurers and defendants by the cases of Zurich Insurance v Romaine and Jet2 Holidays Limited v Hughes & Hughes.

In Romaine, the Claimant issued proceedings for a noise induced hearing loss claim, then later discontinued as a means of escaping a strike out application, only to then be served with committal proceedings. The judge issued a warning to claimants that "dishonest claimants cannot avoid being liable to committal proceedings merely by discontinuing their original fraudulent claim."

The Court of Appeal in Jet2 Holidays decision went even further, finding that committal proceedings could be pursued even though the Claimants had not issued proceedings. The Claimants had served pre-issue witness statements signed with a statement of truth in support of a holiday sickness claims. Evidence from the Claimants' own social media discredited the rejected claims and committal proceedings were successfully pursued on appeal.

These decisions demonstrate that Courts are taken an increasingly hard line on fraudulent behaviours. The easy 'get outs' for claimants of discontinuance or not issuing proceedings are no longer valid for those hoping to avoid further sanction for advancing fraudulent claims.

Steering back to the usual battlegrounds of fraud claims, we successfully defended a fraudulent claim that bore all the hallmarks; high occupancy in the Claimant vehicle, the Defendant reporting unnecessary braking and being handed a crib sheet of details immediately after, and previous accident histories. Our suspicions were validated when the Court found the Claimants' claims to be fundamentally dishonest and ordered they pay the Defendant's costs.

Our Scottish office defended a claim valued at £900,000 brought by a claimant who allegedly suffered serious injuries sustained on a ski slope. Targeted surveillance, and monitoring social media, resulting in footage being obtained of the pursuer competing in go-karting events despite his claim he was significantly incapacitated by his injuries. The case was discontinued 8 weeks before trial.

We also successfully defended an opportunistic claim brought by a teacher who alleged she was almost knocked off her bicycle by a van. In the absence of any supporting evidence from the claimant, the Court ordered her to pay the entirety of our client's legal costs of £12,500.

In order to prevent being told to get on their bike at trial, fraudulent claimants will often hope for a quick admission of liability to remove the risk of being investigated further. Last year we demonstrated that such hope can be misplaced when we were successful with an application to withdraw a pre-action admission of liability made in the portal after concerns arose that the Claimant's claim was fraudulent. The judge found it was in the interests of justice that our client be permitted to withdraw their admission.

The Courts also provided guidance on additional points of relevance in fraud matters. In Patel v Arriva Midlands, it was found that a quantum trial was not required in order for an insurer's application to strike out a personal injury claim for fundamental dishonesty to succeed. Liverpool Victoria Insurance v Zafar provided guidance on the punishment for medical experts who are found to in contempt of court, having signed a false statement of truth. Conduct such as this needed to handled strongly due to the reliance of experts required by the court system.

Whilst case law continues to provide the most fruitful avenue for discussions on how to tackle fraudulent claims, it is hoped the reforms will demonstrate that removing financial incentives from whiplash claims will be the strongest deterrent. However, determined fraudsters will continue to probe systems in an effort to make money, both in motor claims and other casualty lines.

Within motor, we identified in late 2018 that prognosis creep and 'tariff plus' should be a cause for insurers and defendants. Anxieties about how non-whiplash injuries will interact with the new tariff system will remain in the absence of hard data. The hard-learned lessons regarding fraudulent motor claims should also be converted to other casualty insurance lines. We expected to see examples of organised fraud moving into other areas to test systems, processes, checks and balances of other insurance lines.

It should be noted that whilst the Government gave the whiplash reforms with one hand, they also took a little from insurers with the other as a result of the changes to s152(2) the Road Traffic Act. From 1 November, insurers are no longer be able to place reliance on a declaration obtained after an accident date which confirms their entitlement to void a policy, therefore avoiding liability to third party victims under the Road Traffic Act.

These declarations were a valuable tool managing fraudulent policy inception activity. In the absence of the option to void policies after the event, insurers may be susceptible to ghost brokered policies and opportunistic claims.

Finally, last year also saw confirmation that Qualified One Way Cost Shifting will be introduced to Scotland. By placing the onus on defenders to show that pursuers have made fraudulent representations or acted fraudulently before a defender can recover the costs of a successful defence there remains the risk that QOCS could put pressure on insurers to settle claims where some fraud concerns exist.

Such settlements would be in the knowledge that even if they successfully defend the case, they are likely to be liable for their own litigation costs. That is of course against a background where Scots law still does not allow for a claim to be struck out on the basis of fundamental dishonesty.

With a seat on the personal injury committee of the Scottish Civil Justice Council Clyde & Co (Scotland) continues to lobby the Scottish Government on behalf of the insurance industry to introduce a Scottish equivalent to section 57 of the Criminal Justice and Courts Act 2015. At the same time, and following on from the landmark decision in Grubb v Finlay in 2018, we are also pushing the Scottish judiciary to recognise the concept of fundamental dishonesty in the common law of Scotland.

In the ongoing case of Martin v Fife Council, although unsuccessful in having the case struck out for fundamental dishonesty, the Court did find that pursuers are obliged to fully answer any detailed allegation of fundamental dishonesty that is made by the defender during the course of a case. The pursuer must meet that challenge with a detailed written response supported by disclosed comment from experts where appropriate. It is a significant change from the previous position that the pursuer could avoid properly engaging with a claim of fraud until trial.

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