Clyde & Co’s specialist fraud team has pioneered a new process with the insurance industry that capitalises on the previously little-used Section 57 of the Criminal Justice Act to ensure exaggerated personal injury claims are dismissed before coming to trial.
The firm has successfully used the process to have 18 cases dismissed or discontinued in 2017/18, generating savings of £2.2 million, excluding recoveries from dishonest claimants that totalled a further £80,000. The time taken to manage these litigated large loss cases was reduced to 12 months.
Commenting on the success of the project, partner Damian Rourke, specialist fraud team lead at Clyde & Co, said: “Exaggerated casualty claims threaten the efficient running of a sustainable insurance market. Our goal is to help insurers force claims to be pleaded accurately and thereby reduce leakage, which drives up costs for insurers, and ultimately insureds.”
Under Section 57 of the Criminal Justice Act, where dishonest exaggeration is proved, the claimant can lose not only the exaggerated elements of the claim but also the genuine elements and any entitlement to costs.
The claimant is also required to pay the defendant’s costs. The statute was specifically enacted to deal with claimants that exaggerate injuries and ensure that claims are brought accurately.
Rourke added: “Our process map and the additional tools we have developed to supplement it form an extraordinarily powerful weapon against high value, exaggerated claims. We’re very much looking forward to playing our part in helping develop the industry’s strategic response to the problem of exaggerated/dishonest claims.”
“We have had very good buy in from one of our key clients and are now looking forward to rolling this out to the rest of the industry.”
Clyde & Co, meanwhile, has obtained what it believes to be the single highest award of exemplary damages made in a motor fraud case in the UK.
Acting on behalf of motor insurer Admiral, Clyde & Co’s team obtained £70,000 in damages against Barnet-based accident management company MS Globenet (trading as ACE) and its director for 20 cases of fraudulent claims worth up to £2.5 million.
Commenting on the case, Susan Evans, head of counter fraud at Admiral, said: “These claims were part of a concerted effort by a number of individuals to defraud motor insurers across the industry. From an early stage we worked closely with Clyde & Co to fight the claims presented to Admiral and had significant success.”
“However, we felt it was important not let those who stood to profit from the fraud to walk away without being held to account. Therefore, we hope that the large award made in this case will serve as a deterrent to those thinking of committing fraud.”