The defendant (represented by Keoghs) received an award of £67,250 exemplary damages plus costs against the claimant and the accident management company. Partner, Melanie Mooney who handled the case takes us through the twists and turns encountered.
This matter arose from a genuine motor accident between the parties on the 15th January 2012. Negligence on the part of the defendant was conceded from the outset. Two days post-accident, a claim was presented on behalf of the claimant by Barber & Co. solicitors to the at-fault insurer esure.
The claim included personal injury, the cost of repairs to the claimant’s Mercedes vehicle, the hire of a replacement and recovery and storage of the damaged vehicle.
On 27th January 2012 Barber & Co presented an engineer’s report setting out the estimated cost of repairs at £3,598.00. Sometime later a request was made for an interim payment to assist the claimant in the apparent mitigation of her loss and to enable her to cease hiring.
A without prejudice payment was released in September 2012 and court proceedings were subsequently issued in December 2012 with the claimant pleading the following losses:
| Repairs: | £3,598.00 |
|---|---|
| Hire: | £42,045.12 |
| Recovery and Storage: | £5,808.00 |
A Part 18 request for further information was made to the claimant via her representatives. The issue of the repairs to the vehicle were addressed within the request.
The replies, signed by the claimant personally, stated that repairs commenced on 3rd September and were completed on 11th September. The replies included an apparent repair invoice, rather surprisingly in the exact same sum as had been estimated.
As part of Keoghs’ hire and repair validation process the garage was contacted by telephone. The owner of the garage confirmed that he had not repaired the claimant’s vehicle and moreover that although the company details on the alleged invoice were that of his garage, it was not one of his invoices. He duly provided a sample of his invoice and signed a witness statement confirming his position.
The claimant duly served her own witness statement which confirmed that upon receipt of the interim payment she removed her vehicle from storage and took it to the repairing garage. She again relied upon the repair invoice previously presented.
At the point of witness statement exchange the statement from the garage owner was provided to the claimant and an explanation requested.
Matters then took an even more surprising turn; the garage owner had a visit from representatives of the accident management company, Accident Claims Consultants Ltd (ACC) and at that visit they presented him with a typed statement which said that having refreshed his memory he did recall repairing the vehicle. He refused to sign the statement and a further statement was prepared by Keoghs to deal with the issue.
Unfortunately, the garage owner was subjected to further harassment and intimidation but he was steadfast in his position that the vehicle had not been repaired by his company.
The matter was listed for trial, however that was vacated due to an application being made for permission to join in the accident management company and for the defendant to make a Part 20 claim in the tort of deceit and seek exemplary damages against both the claimant and ACC.
ACC were duly joined into proceedings for the purposes of costs and also in order that the court could order them to provide disclosure of documents.
The Part 20 claim was issued and served and again matters took an astonishing turn. Their defence accepted that the repair invoice had not been prepared by the alleged repairing garage but by themselves, seemingly upon the request of the garage owner as he had been ‘too busy’ to prepare it. This startling admission, in the light of the seriousness of matters and the claimant’s repeated reliance upon the document, alleging it to be genuine, unravelled the credibility of the whole claim.
Summary judgment was therefore obtained in respect of the claims for hire, repairs and recovery and storage. The claimant was ordered to repay the interim payment (which she has since done so).
The claimant resisted the application for summary judgment and sought to appeal the order, however the appeal was refused.
ACC failed to provide a list of documents in accordance with the court’s order and therefore they were debarred from defending the Part 20 claim against them and their defence was struck out.
At a further hearing, which was not attended by either the claimant or ACC, judgment in the tort of deceit was obtained and the claim was struck out in its entirety. The matter was then listed for an assessment of damages hearing which the claimant was to attend, bringing along with her a credit report. She was additionally ordered to file a witness statement which she failed to do until the day of the hearing. The matter, having been reserved to HHJ Butler, sitting as a High Court Judge in Preston County Court was listed for a hearing to assess any award for exemplary damages.
By the time of the hearing, the claimant’s solicitors had come off record however she duly attended, bringing with her further bank statements and a statement of her own. Permission for her to rely upon these documents was not opposed. The judge explained the position she now found herself in and made it clear she did not have to subject herself to cross-examination. Despite this, she chose to take the stand.
Further revelations ensued, despite stating that the vehicle had been recovered at the accident locus, she accepted that this was not in fact true.
She maintained that she had given the cheque for repairs to another party despite it being made out to her personally and it not appearing in any of the bank accounts she had disclosed.
She stated that she had been made to sign documents and that her husband, who worked as a mechanic for the accident management company, or an associated business, feared for his job although there was no credible explanation as to why this would be the case.
Finally, she revealed that she had not been provided with an Audi replacement vehicle as asserted on the hire documents but in fact a Mercedes.
She had signed previous statements of truth in respect of all these issues.
The judge commented:
“exemplary damages…are not principally compensatory. They involve an element of punishment. They are intended to make a party who has been guilty of unconscionable conduct suffer, to teach that person a lesson that tort does not pay, but also to deter others who might be similarly minded, tempted, or weak-willed enough to go along with such claims in a future situation.”
He added:
“…there is an epidemic, or a phenomenon of claims of this kind, and it seems to me that that has to be borne in mind by the court when, in a proper case, it can award exemplary damages”.
The claimant, attempted to verify, in her schedule of special damage, the sums for hire and recovery and storage before those sums had actually crystallised. That was of course very suspicious. The judge felt that there was no doubt that the accident management company had deliberately sought to present a dishonest claim on the back of an otherwise genuine accident.
Whilst he accepted that the claimant was not the “prime mover” of the claim, he was quite sure that had the trial not been vacated on the day it was listed, that the claimant would have gone into the witness box and given evidence in support of the claim.
Having found that there was justification for an order for exemplary damages against both the claimant and the accident management company, he awarded the sum of £7,250 to be paid by the claimant and £60,000 against the accident management company. The defendant’s costs of the claim and the Part 20 claim were also awarded.
In assessing the award the judge stated:
“In my judgment, this was a very serious false exaggerated claim. In terms of the second Part 20 defendant, ACC, it seems to me that there was not only a deliberate and unconscionable attempt to defraud the insurers of Mrs Cooper, and Mrs Cooper herself, and to mislead the court, but a deliberate attempt, even when caught out, to try to intimidate a witness…even after ACC had been joined, they saw fit to put in an utterly incredible, and I find dishonest, defence…it is hard to imagine a more serious case”.
Andrew Nixon, esure Fraud Operations Manager, said:
“In investigating and taking action against fraud, we will always consider the range of sanction actions available to us. Working in close collaboration with Keoghs, in this case, we believed that a tort of deceit was the most appropriate and effective option. This is an excellent result demonstrating how punitive financial penalties hitting the pockets of the dishonest can be used in the fight against claim fraud.”
The matter was handled by Keoghs’ credit hire technical director Melanie Mooney, assisted by Rachael Horridge.
Commenting upon the case Melanie said:
“This case clearly demonstrates how one phone call can unravel a whole case. It is difficult to understand the claimant’s and the accident management company’s actions in continuing to assert something which was clearly not true.”
“With the assistance of our insurer client, justice has been done and has been seen to be done”.
Melanie Mooney
The service you deliver is integral to the success of your business. With the right technology, we can help you to heighten your customer experience, improve underwriting performance, and streamline processes.
