Payback: Using The Tort Of Deceit As A Weapon Against Fraudsters

Going on the offensive and pursuing sanctions against fraudsters remains a key area of focus for the insurance industry and there continues to be a good deal of discussion in relation to the different options that are available; contempt of court, strike outs, exemplary damages are all sanctions that can be imposed if once proceedings are commenced the claim is found to be fraudulent. What happens though if the 'fraudulent' claim is mistakenly paid by an insurer under the belief at the time that it was genuine and before any proceedings are commenced? In such circumstances the aforementioned procedural remedies will usually not be appropriate but that is not to say that a remedy does not exist.

The remedy

The tort of deceit is a cause of action that can enable insurers to recover financial loss that has been incurred as a result of being deceived; this can include the costs of investigating the fraud.

In order to succeed in a tort of deceit action the...