Supreme Court Tackles Insurance Fraud

A recent ruling in the Supreme Court opens up for reviews of fraudulent injury claims, a decision that will be important for insurers and those advising personal injury claimants.

Fraudulent misrepresentation

Colin Hayward’s settlement agreement was set aside by the Supreme Court after his employer’s insurers, Zurich Insurance Group, presented the Court with evidence that Hayward had exaggerated the extent of a back injury he suffered at work.

Hayward was granted a settlement figure of £135,000 in 2003, a sum the county court reduced to £14,720 when it was revealed that Hayward had fully recovered a year before the settlement. After the Court of Appeal overturned the county court’s decision on the basis that Zurich had been aware of the claimant’s fraud at the time of the incident, the Supreme Court agreed with the county court’s decision and ordered the reduced sum to be paid.

Huge boost for counter-fraud initiatives

The Supreme Court’s decision is welcomed by insurers, as evidence obtained after a fraudulent settlement can now be used to recover the proceeds of fraud. The ruling comes on the heels of the Criminal Justice and Courts Act 2015, which allows the courts to dismiss personal injury claims where the claimant is found to have been fundamentally dishonest.

Catherine Burt, head of counter fraud at DAC Beachcroft’s claims solutions group, who represented Zurich, says the Supreme Court’s judgment “makes clear to fraudsters that insurers will be able to tackle fraud where it is material, regardless of when the evidence is discovered.”

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