Carpenters partner Donna Scully looks at the latest developments in the fight against insurance fraud
What a difference a couple of weeks can make. When the final meeting of the Insurance Times Fraud Charter 2016 took place in early November, the fight against fraud looked to be heading in the right direction.
Ben Fletcher from IFB set out the recent successes in fighting fraud. It was a long list: the Insurance Fraud Taskforce recommendations, closer working between the IFT and SRA, implementation of the Brady CMC Review, Axa’s Amanda Blanc joining the IFB, half the market now using the Insurance Fraud Register (IFR) and talking to another 30%, potential extension of the IFR to other members, the IFB’s ‘Strategic Threat Assessment’ and work on increasing the IFB’s resources.
DCI Little from IFED said they’d had a good year fighting bad enablers and had a good partnership developing with the market. They had even met Theresa May about the potential threat from fraud.
It was agreed the SRA should do more to target bad enablers. The SRA said they are pursuing this but that they are hindered by the burden of proof they require (beyond reasonable doubt) and the meagre fines that they can impose. They are lobbying government to get tougher powers to deal with bad lawyers.
Everybody agreed that it is crucial that insurers share more data with the IFB. It is also essential that insurers prosecute fraud and exaggerated claims. We cannot make it easy for fraudsters to operate. We need zero tolerance with a united front. It was also agreed that we need an agreed definition of fraud and whether it should include ‘suspected’ fraud too.
So – overall – a positive and upbeat meeting with advances made on several fronts and grounds for optimism that the market can be improved.
Fast forward two weeks. The Ministry of Justice publish its long-awaited consultation on “reforming the soft tissue injury claims process”. The proposals represent a systematic attack on genuine customers and not a single recommendation is targeted against fraudsters and bad enablers. If anything, they have the potential to encourage fraud by pushing claimants, and those who may not have claimed at all, into the arms of claims management companies.
The proposed reforms are short-sighted, unfair and may have the exact opposite effect to the one intended. The spurious questioning of the legitimacy to pursue justice and compensation for one injury only is deeply troubling. Condemning legitimate and reasonable claims challenges one of the very basic foundations of our centuries-old legal system and our system of restorative insurance cover.
The focus of these reforms should be to tackle fraud. Genuine customers should not be penalised. So much more can still be achieved by an open dialogue and working together to find real solutions to tackle fraudulent and other unwelcome behaviour. The reforms are, in my view, a very blunt instrument that will attack the good instead of tackling the bad and should be opposed by anyone with a sense of justice.