Lawyers and insurers collaborate in fraudulent claim crackdown

Solicitors are being encouraged to register their practices before the implementation of a new service aimed at preventing fraudulent claims from entering the compensation process.

Representatives from claimant solicitor organisations and the insurance industry have collaborated to establish the askCUE PI service, which will become compulsory to use from 1 June 2015.

askCUE PI will allow approved solicitor organisations to check their client's records held on the service's database. These records relate to personal injury or industrial illness incidents reported to insurance companies, which may or may not give rise to a claim.

The service will open on 5 May. Registration will allow claimant solicitors to make an unlimited number of enquiries during a 12-month period for a fee.

However, those solicitors who only submit a small number of claims each year can register for a set enquiry package which provides up to ten searches per annum for no charge.

The work on the service has been led by the Association of British Insurers (ABI), the Motor Insurers' Bureau (MIB), the Motor Accident Solicitors Society (MASS), the Association of Personal Injury Lawyers (APIL), and the Law Society, and forms part of recent updates to the pre-action protocol for low value personal injury claims in road traffic accidents (RTAs).

Claimant representatives processing claims covered by the Ministry of Justice's RTA protocol will be required to use the service from 1 June before submitting a claim notification form for a personal injury claim through the claims portal.

Fight against fraud

The director of general insurance policy at the ABI, James Dalton, said that the service represents a step forward as the insurance industry and claimant communities join forces in the fight against fraud.

'The development and delivery of the service is a tangible demonstration of what can be achieved when our sectors work together. There's plenty that we disagree on, but getting the fraudsters and cheats out of the personal injury claims system is something we all agree on which is why the delivery of askCUE is an important milestone in the on-going fight against fraud,' he added.

Susan Brown, the chairman of MASS, remarked: 'Having worked towards this for the last four years, MASS is delighted that insurers and claimant solicitors will now be able to share information at an early stage in a claim that might indicate potential fraud. This is an important first step in greater collaboration across the industry and we look forward to actively exploring how further data sharing might contribute to the fight against fraudulent claims.'

The past president of APIL John Spencer welcomed the opening of the service: 'This is a really good first step for the sharing of information to tackle fraud.'

Catherine Dixon, the chief executive of the Law Society, commented: 'This new system means the legal profession and the insurance industry can crack down on fraudulent claims. The collaboration between lawyers and insurers is a huge step forward showing that we can all work together to achieve a common objective which will benefit consumers.'

Bus crash scam

The issue of insurance fraud remains a hot-button topic to those both inside and outside the legal profession. Recent research from the AA found there are now 71,000 personal injury claims made each month.

Whiplash and associated claims cost motorists £2.5bn a year, according to Aviva. The insurer has claimed that such claims add £93 to the average insurance premium.

A jury at Manchester Crown Court today found ten people guilty of conspiracy to defraud in one of the largest scams of its type ever detected. A further five people had already admitted their involvement.

The case, brought by the Cheshire Constabulary, centred around stage-managed accidents involving First Group buses on routes in the Chester area. In each of the seven collisions a car, and in one case a van, deliberately drove into a bus. In total 218 bus passengers submitted personal injury claims adding up to more than £1m as a result of the collisions.

The ringleader of the scam, John Christopher Smith, was found guilty earlier this month and was given a custodial sentence of six and a half years. It was claimed in court that Smith had benefited to the tune of around £157,000 from referral fees alone on 177 of the claims arising out of these collisions.

A total of 13 other people involved in the fraud were given jail terms for conspiracy to commit fraud and were given sentences ranging from nine months to three years.

'It is good to see that the judiciary is sending a strong signal to anyone considering making a fraudulent insurance claim with this sentencing,' said Ronan McCann, a fraud partner at Horwich Farrelly, which represented insurer ERS in the case.

'Our clients are prepared to commit significant resources to investigating and fighting such attempts to defraud them and it's important for the courts to back up this commitment with sentences that will act as a deterrent to anyone contemplating undertaking this type of large scale fraud.'

 

John van der Luit-Drummond is deputy editor for Solicitors Journal
john.vanderluit@solicitorsjournal.co.uk | @JvdLD