Faking it

We all remember the news article from the Manchester Evening News which sparked debate and dismay about the problem with bogus claims and the effect they have on the genuinely injured person. In this case, all the RTA claims were completely staged which of course differs from the element of bogus claims where a person who has been injured exaggerates the effect an accident has had on them. However, for the purposes of this article, it is important to link the two.

One client was made a very precise offer at a settlement meeting last year of £50,000, inclusive of costs, or running the risk of going to prison for fraud. Damaging video evidence had been served showing the client, who had alleged he could not work or ride his motorcycle, doing exactly that on no less than 15 occasions.

It is an ongoing concern for any solicitor that they may accept instructions to act on someone's behalf when on the face of it and certainly in the initial stages of the claim everything appears to be correct and above board. Time is usually the key ingredient to uncovering the unsavory reality that your client is being somewhat less than honest with their instructions. Unfortunately, the majority of solicitors do not enjoy the resources or the access to databases which insurers have and clearly until such time that something strikes a chord of deceit or dishonesty we have to take our clients very much at face value. Once dishonesty is suspected or proved we are then placed in the difficult position of having to extricate ourselves from the problem and of course there is usually a cost to us which is unlikely to be recoverable from the dishonest client. While we have the benefit of reporting suspicions under POCA and the ability to come off record, that does not prevent the problem occurring in the first place and the claim may not have been litigated.

What is worrying is this person was able to commit a very serious crime over a period of three years and on 93 occasions. It is inescapable that despite the immense resources of the insurance industry he got away with it for a long period of time and would possibly have continued to do so if it had not been for the intervention of a member of the public. The fact that he tried and was successful for a long time, is indicative that 'truly' bogus claims are here to stay and will have the ability to increase on the introduction of the new RTA claims process, where speed of settlement is promoted and the thorough investigation of claims will be diminished because of cost. If Jackson LJ's proposals for costs shifting are introduced, this too could see the escalation of the problem as 'Mr Unscrupulous' will quickly take advantage of this.

Damaged reputations

There is considerable concern among lawyers that once the new electronic claims portal is up and running, its use will extend in time to the general public thus seeing an increase in third-party capture. This could see a rise in fraudulent claims. If the insurance industry cannot quickly detect bogus claims now, will they really try in the future and to what extent will this be detrimental to the honest claimant and the cost of insurance premiums in the longer term? Sadly, the insurance industry has always been somewhat shy in providing information and access to databases to claimant solicitors, who could work with them to actively try and prevent bogus claims from being made in the first place. Claimant solicitors have no interest in helping a dishonest claimant. It is not cost effective and offends the principles of the claimant lawyer. It also puts us in conflict with our own conduct rules.

Fraudulent claims in whatever guise '“ be it staged accidents or exaggerated symptoms '“ can only damage the reputation of the genuine claimant and the lawyer who represents them. Moreover, the insurance industry receives sympathy and justification for third-party capture. While we find the principle of third-party capture abhorrent and can never justify its use, we do regard 'fraudulent' claimants as a menace. Fraudulent claims lead to higher premiums and it is not only genuine claimants that suffer, we do as well.

Harsh sentencing must be the only deterrent for staged claims, and exaggerated claims should sound severely in costs such as in Carver v BAA [2008] EWCA Civ 412 and Kirk.

The insurance industry could help by sharing a database of suspect claimants that we could check against, a bit like the old vexatious litigant list, then solicitors wouldn't touch them. If the insurance industry wants to compensate them through an online claim, then at least we will not be the ones to blame.

In this changing face of PI litigation, we have to be vigilant so that the finger is not pointed at us and further damage to a profession already castigated by some does not fall victim to further criticism.