Esure beats claims using new legal tactics

Esure Sevices Ltd has become the first insurer to successfully use contempt of court proceedings to prosecute a fraudster involved in a ‘crash for cash’ scam.

During 2008 and early 2009, Esure identified 13 incidents that involved suspicious claims for damage and personal injury. It was found that the policies behind the claims were linked in various ways and that false identities had been used to set them up.

Esure was able to defeat all the claims, and after investigations passed the matter to the police, which chose not to pursue the case.

Esure then submitted an application for contempt of court, and fraudster Israr Hussain Shah, of Wellington Road, Bury, Manchester, has now been sentenced by HHJ Shaun Spencer QC at Bradford High Court to nine months in prison for his part in the scam, reduced to six months following mitigation.

Shah was a third party claimant in one of the claims defeated by Esure. He was described, as a “foot soldier on the frontline” in a professional and organised fraud operation.

Ronan McCann, partner at insurance litigation law firm Horwich Farrelly representing Esure, said: “This is an outstanding outcome for esure, and the insurance industry as a whole, in its continuing battle against the ever-increasing incidence of fraudulent claims.”

Matthew Gilham, head of financial crime for Esure, said: "We are delighted to secure this conviction which will help send a message to all those knowingly submitting false evidence to the courts about staged accidents. This case will give a new weapon to the industry against this type of insidious claim."

During the sentencing the Judge stated that "crash for cash" scams were prevalent in the Bradford area and were a very serious crime.

Contempt of court has previously been used in cases of exaggeration of injury, but not in cases of a wholly fictitious event.

Ronan McCann added: “Israr Hussain Shah is not an organiser of fraud on a large scale, nor was he a serial claimant. He was described as a ‘foot soldier on the front line’, but organisers of fraudulent activity need these types of foot soldiers.

“Indeed, it is these foot soldiers who submit the vast majority of fraudulent claims. Hopefully, today’s outcome will make many people, who might otherwise have thought about taking part in this type of criminal activity, think again.

“They have to know that the insurance industry’s net is much wider than just the organisers of fraudulent claims and includes anyone engaged in such activity. Despite being merely a foot soldier, the judge made it clear that Mr Shah’s crime was serious, stating that he had become involved with ‘organised professional criminals’.

“This serves as a stark warning to those who believe that merely lending their name to such claims is a minor offence, or is free of risk.”

Andy Nixon, fraud operations manager for Esure, said: "We hope this shows that where we have solid evidence, we will pursue fraudsters even if we have to find new ways or set precedents to secure prosecutions.

“We have successfully repudiated many fabricated claims but repudiation is clearly not a sufficient deterrent – especially in cases like this where there is a clear link to organised fraud. We have now shown we can – and will – find new ways to stamp out fraud against Esure and we hope the industry follows."