Motor insurers have become concerned in recent years with cases which seem to be pursued more for the benefit of the companies involved in facilitating the claim than for the claimants themselves.
Usually, these cases feature spurious heads of loss, usually for cognitive behavioural therapy or physiotherapy treatment, “bolted on” to claims following a road traffic accident. Commonly known as “layering”, the knowledge that any particular claimant may have of the specifics of a claim is questionable. In fact, for one recent case I dealt with on behalf of insurer LV=, Trehan v Liverpool Victoria Insurance Company Ltd, it turned out that the claimant had no knowledge of the claim which had been brought in his name!
Mr Trehan was involved in an accident on 31 August 2012. After taking his vehicle in for repairs, he sought assistance from one Adeel Karim, who described himself as a freelance agent for Accident Claims Assistant Ltd (ACA), a claims management company run by his brother, Haroon Karim.
ACA referred Mr Trehan’s claim to Bolton-based Asons Solicitors, and arranged for Mr Trehan to see a medical expert instructed through a medical agency that was (it was subsequently discovered) operated by Haroon Karim’s wife.
LV= declined to settle Mr Tehan’s £3,000 whiplash claim, taking the stance that the accident was a “low-speed impact” and as such the alleged injuries could not have feasibly been sustained.
The resulting litigation itself was initially unremarkable; the parties provided disclosure, exchanged witness statements and replies were provided to LV=’s Part 18 questions. The first suggestion that something was not right with the claim was when Mr Trehan failed to attend trial in September 2014. That resulted in his claim being dismissed and him being made personally liable for LV=’s costs of around £7,700.
The costs were not paid; therefore, LV= decided to pursue enforcement. That prompted Mr Trehan to lodge an application which contained some disturbing allegations, including that Mr Trehan had no idea proceedings had been issued and had not signed any of the documents bearing his name. This was just the first in a range of inconsistencies.
We were able to secure disclosure of Asons’ file of papers which showed:
- That they did not complete even basic identity checks on Mr Trehan.
- At no point did they contact him directly, instead sending correspondence via ACA.
- The first occasion that they spoke to Mr Trehan was just three days before the trial.
A handwriting report was commissioned, which supported Mr Trehan’s allegation that the signatures on the documents produced were not truly his. Asons, who attempted at different stages to escape litigation by offering to pay costs, applied to join Haroon Karim to proceedings, alleging that any wrongdoing was down to him. It was clear that the claim form and particulars of claim must have been signed in Mr Karim’s presence as he himself had signed a form of interpretation stating that he had translated the documents to the claimant.
Unable, therefore, to simply suggest that an employee must have been the driving force behind the scam, Mr Karim argued that Mr Trehan had sent an “imposter” to his office to sign the paperwork. Adeel Karim supported his brother’s evidence and both gave oral evidence at trial.
The trial took place at Nottingham County Court over a five day period between July and September 2017. After considering the evidence gathered as part of our investigations, the judge, HHJ Godsmark, concluded that:
- Adeel Karim forged Mr Trehan’s signatures on Part 18 replies.
- Haroon Karim forged Mr Trehan’s signatures on the claim form, particulars of claim and schedule of special damage.
- All other forged signatures were done by or with the endorsement of Haroon Karim.
- Asons never satisfied themselves that they were truly receiving instructions from Mr Trehan.
- Asons deliberately wrongly dated letters to generate a false trail as to what had been done and when, so as to disguise non-compliance with court timetabling.
As a result, the judge ruled that the original costs order made against Mr Trehan was to be set aside, and replaced with a costs order against Asons and Haroon Karim. They were also ordered to meet LV=’s and Mr Trehan’s costs of his application, which are estimated to be in the region of £40,000.
If the industry needed any proof that there are unscrupulous fraudsters working to line their own pockets at the expense of claimants and insurers alike, then this is it. Unfortunately this is not a unique case. It highlights how action needs to be taken in the industry to stop so-called “professional enablers”.
The financial rewards to these groups who engage in the inflation of claims or decide to carry on with claims, notwithstanding that they are without instructions, are potentially plentiful.
Insurers must be aware of this issue and satisfy themselves, on every case, not only that the heads of loss claimed have genuinely been incurred, but that the claimant is truly pursuing the claim.
Any cases in which this type of deception is identified should be robustly fought with the ultimate goal of driving dishonest operators out of the industry. Not only are insurers being targeted but, as originally the case with Mr Trehan, claimants could be left facing significant costs orders following litigation they did not authorise.
This case sends a clear message to professional enablers that insurers will not stop in their efforts to stamp out fraudulent claims.