Seven insurers award damages in landmark civil case
A consortium of seven UK motor insurers has been awarded £300,000 in damages from 57 members of a 'crash for cash' fraud ring following a landmark civil case.
The award comprises the insurers’ losses as a result of the fraud as well as the cost of investigating the claims and bringing the civil action against the fraudsters.
The size of the award was compounded by the addition of £92,000 in exemplary damages – determined by the judge, Justice Holman, as proportionate to the serious nature of the attempted fraud.
Justice Holman said: “This was not a case of contrived accidents where two people seek to arrange an accident to defraud an insurance company. Ordinary members of the public were used and innocent drivers involved. Members of the public have been used as pawns. “It is no thanks to the defendants that few of the victims were injured at all, but even minor injuries can result in serious consequences. This is not to mention the inconvenience and expense that these innocent drivers were put to.
“The court needs to send a clear message to those who engage in conduct of this nature - that this will not be tolerated and in my judgement this award of exemplary damages is entirely appropriate.”
In the original liability judgment, Justice Wyn Williams summed up the dangers that the ‘crash for cash’ gang had posed to innocent road users: “Operation Orion has uncovered dishonest conduct on a large scale. Those orchestrating this conduct are guilty of serious criminal offending. Those who have allowed themselves to become involved in a staged accident and who, thereafter, have sought to benefit financially from it, for example the Defendants in this case, have also probably committed significant criminal offences.
“Such offences are not simply about money. Innocent drivers and passengers who had the misfortune to be in the vehicles targeted for staged collisions were put at significant risk of injury.”
Ursula Coulibaly, head of financial crime operations at LV – one of the insurers involved in the action, said: “This is an excellent example of insurers working together for the benefit of both the industry and consumers. Cash for crash fraud rings have a significant financial impact on the insurance industry but more importantly put law abiding motorists safety at a significant risk.
"LV is delighted the judge has seen fit to award these damages and we hope this will give insurers the confidence to bring civil action for similar cases in the future."
Kate Lotts, director of specialist claims at Direct Line - one of the insurers involved in the action, said: “This is a milestone victory against a fraud ring that carried out a well organised operation to cheat policy holders out of millions of pounds. The success demonstrates what a useful tool this kind of civil action is for insurers in bringing fraudsters to justice.”
Dominic Clayden, director of claims at Aviva, another of the insurers involved in the case, said: “This judgement sends out a clear message that insurers take the investigation of suspicious claims extremely seriously. We will always take action against the small minority of people who are dishonest and fraudulent, and fight to protect the interests of our honest customers."
Ruth Needham, partner and head of Keoghs’ fraud Rings unit, the firm who represented the insurers, said: “Criminal gangs see organised insurance fraud as a significant opportunity to obtain funds at comparatively low risk compared to other crimes such as armed robbery or drug-dealing. This result sends the strongest possible message to such gangs that the insurance industry is no ‘soft target’ - and will fight back using every tool at its disposal.”