APIL call for independent investigation on insurance fraud cost

This article was published on: 06/7/16

The Association of Personal Injury Lawyers (APIL) has urged the Government to launch an independent investigation into motor insurance fraud figures cited by the Ministry of Justice, in relation to low-value personal injury clams.

Responding to the findings of a review set up by the MoJ and HM Treasury, which suggested that fraudulent low-value personal injury claims were costing UK insurance policy holders up to £50 each per year, APIL president, Neil Sugarman, questioned the availability of evidence to prove the findings.

“There is no independent evidence available, as far as we are aware, which paints a clear picture of the situation, and we know figures for personal injury fraud are routinely distorted by the insurance industry.”

Mr Sugarman went on to suggest that insurance fraud was actually only at a fraction of the level suggested by the insurers and accused policy holders of ‘over-egging their own claims’.

“The facts suggest that only 0.25% of the motor claims are actually proven to be fraudulent. That includes policyholders over-egging their own claims, or making false declarations when they apply for insurance. Only a fraction of those will be whiplash claims.”

Scott Rees & Co Partner, David Byrne (pictured), offered his support to APIL’s appeal, emphasising the importance of fraud being tackled fairly and in the right way.

He said: “It is a well known fact that the insurance industry has been guilty of massaging figures relating to fraudulent claims within the profession and this is definitely an issue that has to be taken into account when looking at ways to tackle insurance fraud moving forward.”

“It is not as simple as insisting on reforms that remove access to justice for the genuine personal injury claimant, just for the sake of tackling the fraudulent claimant. There are other methods of tackling this issue, and I fully agree with Neil Sugarman, in that it is critical that the government aims at the right target.”

“The right way forward is for an independent and unbiased research investigation to be commissioned by the Government, so that the real cause for fraud within the profession can be uncovered. It is not right to just base information on the word of the insurers themselves, when they have a vested financial interest in personal injury claims being quashed on the whole.”

“It is time to look at how, previous fraudulent offenders are able to gain further policies, which facilitates their means, to give just one example.”

Last week, the justice minister, Lord Faulks, rounded on solicitors to act on insurance fraud and announced that they would release an action plan of their own in due course. He claimed that a ‘concerted effort’ was needed by all of those involved in the insurance process to tackle the problem, in order to reduce the bill created by fraud within the profession, which he projected to be more than £3bn.

Lord Faulks said: “The Government will do what it can to assist and, in order to make sure that all of the recommendations are actively pursued, we will seek an update on progress later in the year.”

In response to Government’s Autumn Statement last year, David Byrne, suggested that one way to help tackle fraud was to introduce a prescribed amount of damages for soft tissue injuries in road traffic accidents, that had to be diagnosed and signed off by a qualified medical professional, before any offer of damages can be made.

This point was reiterated by the Law Society, Chief Executive, Catherine Dixon, who insisted such steps should be taken to bring an end to pre-medical offers.

Further to this, spokesperson for the A2J campaign, Andrew Twambley, said that there was no reliable figure to assess the cost of insurance fraud.

“The Government has accepted figures from the Association of British Insurers which are nothing more than guesswork. A2J strongly supports efforts to crack down on fraud, to bring down the cost of insurance, but the best way to do so would be for insurers to share their data, and more importantly to prosecute suspected fraudsters in the courts.

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