Keoghs helps enforce eight year bankruptcy for motor insurance fraudster after tort of deceit action

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Keoghs has successfully petitioned for two fraudulent claimants to be made bankrupt, which has led to one of the claimant’s bankruptcy orders being extended to eight years.

With the standard length of a bankruptcy order being one year, the firm’s pursuit of the fraudsters, on behalf of Churchill Insurance, has been viewed as another strong message to anyone looking to submit false claims.

The original claim stemmed from a collision where Churchill’s insured allegedly hit the rear of the claimants’ vehicle, which was said to be driven by a Mr Shajahan, with the second claimant, a Mr Moynul, being a passenger.

The initial trial took place in July 2014, with the judge finding the claims to be fraudulent and both claimants having been dishonest in their evidence. Both were ordered to pay Churchill’s costs on an indemnity basis, including interim payments on account of costs. When these interim payments failed to materialise, the costs orders were passed to Keoghs’ enforcement team who put a charging order on one of the claimant’s properties while further action was taken.

Given the additional expenses and payments Churchill had incurred prior to the fraud being discovered, the insurer decided to run a tort of deceit case, led by Keoghs’ associate solicitor Hamida Khatun. In November 2014, a claim was issued against both claimants for recovery of the payments that had been made, along with exemplary damages.

At the second trial, both Shajahan and Moynul failed to serve any defence or witness evidence and did not attend court.

Not only did the judge find that the deceit had been proven and awarded the compensatory losses as claimed in the sum of £7,192, the judge decided to show the displeasure of the court at their conduct and awarded exemplary damages in the sum of £7,500 – over 100% of the insurer’s actual loss. Additionally, costs were awarded in the sum of £16,000 against both claimants.

Given a continued failure to pay, the claimants were made bankrupt on 13 January 2016. In February of this year, the official receiver decided to enforce an extension of Mr Shajahan’s bankruptcy to eight years.

Keoghs’ Khatun, said: “This is an important reminder to fraudsters that fraud is taken seriously and, having put an insurer to significant expense in investigating and defending a fraudulent claim, they should not expect to ‘walk away’ without any sanction or penalty.

“The unique feature of this case was that, in extending the claimant’s bankruptcy order to eight years, the official receiver took into account the court’s finding of fraudulent conduct in the action that led to the original debt.”

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Marek Handzel

Marek Handzel is the editor of Claims Magazine. Marek welcomes articles, letters, or feedback from readers and can be reached by emailing marek.handzel@barkerbrooks.co.uk