Fraudulent Claims Result In Custodial Sentences

Contempt proceedings were brought on behalf of Admiral Insurance following the failed attempt by the three Defendants to make fraudulent insurance claims in relation to a staged road traffic accident.

The decision has important ramifications for those involved in fraudulent claims. Whilst the first and third Defendants had filed witness statements directly refuting Admiral's allegations of fraudulent behaviour, the second Defendant did not.

In addition, all three Defendants had abandoned their original claims before going to a trial.

Whilst the failure by the second Defendant to file a witness statement mitigated against the offence the Court still handed down custodial sentences to all three Defendants.

Historically, the vast majority of committal proceedings have involved claimants who went to trial and lied in the face of the Court. In this instance, none of the three Defendants went that far and all of them purged their contempt prior to the final hearing. This decision suggests that a claimant who knowingly pursues (and issues) a fraudulent claim is likely to receive a custodial sentence.

Background

The respondents had been involved in an alleged motor vehicle collision which formed part of a larger fraud ring, and had pursued their individual claims for personal injury. Evidence was presented which indicated that the collision had been staged.

When presented with Admiral's concerns about the validity of the claims, the Defendants reiterated that the claims were genuine. Going further, they also threatened to pursue indemnity costs against our insurer client on the basis that the allegation of fraudulent activity was false, and expressed a degree of outrage at what they termed a "baseless allegation".

Following evidential developments, the Defendants abandoned their original claims and committal proceedings were brought.

Outcome

The Court made it clear that it takes a very dim view of fraudulent insurance claims, stressing that they waste huge amounts of time and costs.

The Court did acknowledge that the claims had not proceeded to trial, and thus the Defendants had not given evidence on oath. Furthermore, the Defendants had made full and early disclosure of their contempt once committal proceedings had commenced.

However, the first and third Defendants were sentenced to 6 months imprisonment, reduced from 9 months due to mitigation.

The second Defendant was sentenced to 4 months imprisonment, his reduced sentence due to the fact he...