Is it worth the cost of identifying fake whiplash injuries?

The government has expressed its concern about 'cash for crash' cases and there is to be a consultation on making it harder for claimants to recover damages for whiplash injury in the absence of objective evidence. While the consultation on how to do that rumbles on, insurers will continue to deal with substantial numbers of suspicious claims.

By its very nature the purpose of a fraudulent claim is to obtain money by deception. For an insurer to succeed in defending such a claim it requires cogent evidence that the claim is fraudulent and ?it may need to expend considerable resources to obtain that evidence. It is therefore inevitable that the costs incurred are significant.

Lord Justice Jackson was commissioned to investigate the costs of civil proceedings and he concluded they were dispro-portionate. The report focused on genuine personal injury claims. Defending fraud-ulent claims is even more disproportionate.

Suspicious claims

The recent case of SD and others v AR and another illustrates just how complex and costly these cases can be.

On 10 December 2009 a Citroen Saxo collided with the rear of a minibus. There was no doubt that the collision took place but suspicion was aroused by a number of factors. First, the driver of the car (the first defendant in the proceedings) failed to cooperate in any way with her insurers. Second, in addition to claims by her three passengers, a further 22 claims were made by passengers allegedly on the minibus. The problem was it only had 15 seats. Third, connections were uncovered between the first defendant car driver and a number of the claimants from the minibus.

Having been joined as a second defendant in the proceedings the insurers faced a dilemma: they were eventually satisfied that the driver of the minibus and one passenger, his colleague, were innocent victims but they were also sure that this had been a staged accident. They could not rule out the possibility that there were some other genuine claimants on the minibus but who were they?

Proceedings were issued for eight of the claimants from the mini bus. Significant investigation was carried out to consider the various connections between the parties and previous accident history. The defence stated that some or all of the claims were fraudulent. The trial judge accepted that this was a perfectly reasonable approach. Out of the eight claimants who issued only four turned up to trial alleging they suffered minor, soft tissue injuries.

The first issue to be determined was whether or not this was a staged accident. The judge held that the accident had been staged based upon the number of claims made exceeding the capacity of the vehicles, the evaporation of the majority of the claims, the connections between the first defendant car driver, a number of the claimants whose claims were not pursued and the fact that the minibus driver had recalled seeing the car in a layby before following the minibus, for which there was no logical explanation.

The judge also held that the four remaining claimants had been on the minibus and were unaware of what was going to happen, despite evidence of connections between the four and other claimants who had not proceeded with claims. The final issue was whether each ?of the four had been injured and if so to what extent.

The claim of KS was dismissed primarily because he had failed to disclose a previous accident and compensation received and had then, under cross-examination, attempted to distance himself from the earlier incident. The judge found that he had failed to prove that he had suffered injury in the latest accident.

The claim of LM suffered a similar fate because of significant inconsistencies in the histories given to his GP and his medical expert which the judge concluded rendered his evidence unreliable. Both KS and LM had performed badly when giving oral evidence. Correspondingly the judge found the remaining claimants to be credible and straightforward and they succeeded in their claims for damages.

The net result was that five of the remaining seven claims were dismissed with costs. Despite this long winded litigation the insurer is still faced with the possibility that some or all of the remaining 16 pre-litigated claimants could issue proceedings. The defence may have to be repeated through to trial for each. Given the amount of damages at stake it is grossly disproportionate.

Wider consequences

The current discussion about whiplash injuries centres on the fact that they are relatively easy to make. What is disturbing about this case is that our insurer client faced 25 such claims but had little option but to contest them all as the only way of gradually filtering out the genuine from those that were not. In the final analysis it was credibility in the witness box ?which counted.

The total damages awarded were £3,575; the successful claimants' costs were presented as £50,000 despite six out of the eight litigated claims failing. Whatever the outcome, the true cost to ?the insurer will be far higher than ?is equitable.

While insurers try to combat these claims even when they win, as in this case, there is still a large disproportionate cost, which ultimately motorists have to pick up in higher insurance premiums.

The public purse is further hit by a waste of court time dealing with fraudulent claims. Few would begrudge the costs involved in dealing with a seriously injured claimant whose condition could be medically proven. Whiplash on the other hand is primed for fraudulent claims. It can be easily faked at medical examinations with medical reports being largely a self-reporting exercise which relies solely on the honesty of the claimant. This is highlighted in the above case since all of the claimants could not possibly have been involved and therefore injured in the accident.

The question, which only the government can answer, is whether claims for compensation for minor whiplash injuries are a benefit or a burden to society?