Is Fraud Worth The Price Of Admission? Court Orders Rescission Of RTA Portal Agreement

Clyde & Co's fraud team have recently concluded a successful application to rescind a contract agreed following the Claimant's acceptance of the insurer's MOJ portal offer. This Application was made after concerns were raised that the claim resulted from a staged accident.

The Court agreed that it was in the interests of justice to allow our insurer client to withdraw the pre-action admission of liability also made in the portal.

Background

The collision allegedly occurred on 24 January 2016. Liability was admitted in the Portal on 29 March 2016 with the Claimant accepting a Portal offer on 7 September 2016.

Later investigations by the insurer suggested the accident was staged. The insurer informed the Claimant that further enquiries would be undertaken and the accident circumstances needed to be verified.

Surprisingly, the Claimant did not make any attempt to enforce the compromise but did not issue proceedings until just before limitation. Proceedings were issued against both the alleged driver of the Defendant vehicle and the Defendant insurer. Given indemnity had been withdrawn from the driver we were instructed to act on behalf of the insurer only.

The Particulars of Claim did not seek to rely upon the existing compromise agreement, instead pleading the action in negligence. We filed a defence denying liability that outlined the following issues:

Concerns with the accident circumstances Inconsistent and unreliable accounts of the accident and the aftermath Inconsistencies in the Claim Notification Form (CNF) and medical expert's report Evidence suggesting that the insured driver and the Claimant (who were related) had substantial shared business interests in accident management companies. Application

Shortly after the Defence we obtained instructions to issue an application to rescind the agreement reached in the Portal and to withdraw the liability admission.

The Claimant only sought to recognise and rely upon the existence of the compromise agreement when filing their response to the application.

Outcome

The judge described the insurer's allegations of fraud as not "just smoke and mirrors" and found there was a reasonable prospect fraud may be established.

In considering the factors under Practice Direction 14 7.2 where a Court may permit the withdrawal of an admission, the judge noted:

(a) Conduct of parties

The claim in the CNF was put forward on a potentially erroneous basis given the medical report contradicted it. This was not...