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Keoghs Insight

We keep you up-to-date on emerging market issues and their impact on the insurance sector, through a variety of publications, events and our leading market initiatives.

Author

Karen Berry

Karen Berry

Associate

Keoghs enforcements team celebrates landmark year with some dramatic case highlights

Blogs||25/08/2017

Team recovered £1.8m for insurers over the last financial year.

Keoghs enforcements have posted record figures for the period June 2016 – June 2017, chasing down a large number of fraudsters unwilling to pay the penalties handed down to them in court, and recovering a total of £1.8m for insurers in the process.

The team operates as part of Keoghs’ leading counter-fraud services division, with last year’s tally a testament to the skill and persistence of the enforcements officers allied with the strength of Keoghs’ intelligence capability. By employing this full range of skills and tools, Keoghs continues to play a vital role in locating debtors and assessing whether they have sufficient means to make enforcement a viable option.

Four recent cases illustrate some of the lengths fraudulent claimants will go to in order to avoid paying the penalty for their dishonesty, and the strategies the Keoghs enforcements team use to secure costs owed to insurers.

Massive saving for client

Following a case where all three claims were struck out, the file was transferred to the Keoghs enforcements team to recover costs totalling £51,231.99.

Up to date searches revealed ownership of property with an estimated equity of £118,000, and directorship of two companies which had dissolved with a likely substantial dividend having been paid to the claimant.

A letter before action was sent and the claimant’s solicitors responded with a payment offer of £3,000 per month. An up to date counter offer was made, providing the balance including interest and requesting an increased offer plus a charge on the property to secure the client's interests until such time as the instalments had paid the debt.

When no response was received to this offer, Keoghs instructed agents to issue a statutory demand. This elicited a response, with the debtor making an application for relief from sanctions via the court, which allowed the claimant until two weeks prior to the hearing to file points of dispute.

Given the courts leniency, counsel was instructed and a response to the application was served opposing the application.

Despite the claimant filing a second application to adjourn, the hearing took place with the claimant not in attendance and their application dismissed by the court, leading to a further £3,186 awarded in costs. We then instructed our agent who personally served the claimant with a new statutory demand for £59,872.85 at their sole owned property.

Despite the fact that the person who accepted the demand provided ID, we received a call from the claimant stating he had not been served. We therefore suggested that the person who did take receipt had therefore committed fraud. At this point the claimant backed down and asked for more time to pay. We refused.

No payment was forthcoming and so a bankruptcy petition was filed with the High Court. Despite a further attempt by the claimant to set aside the judgment, the High Court hearing went ahead with the claimant seeking leave to appeal the county court’s previous order. When we suggested that this would not succeed, they offered a charge on their property instead of bankruptcy which we rejected given that the circumstances did not warrant such action. The district judge eventually granted the bankruptcy, much to the audible chagrin of the claimant and his solicitor.

In total we recovered £66,538.23 for our client.

Intuition pays dividends

This case is a perfect example of a hunch resulting in a five figure sum being recovered for a client, with a slim prospect transformed into full payment.

Here, despite the claimant apparently having no assets, Keoghs instructed a High Court Enforcement Officer to attend the claimant’s property. Despite not actually meeting the claimant, the officer did see a £40,000 Land Rover on the drive.

At this point the claimant alleged that he was receiving jobseekers allowance and pleaded poverty, applying to the court for a stay of enforcement with a request for his mother to pay the debt in instalments of £100 per month.

Keoghs responded, stating that the debt would never be repaid at £100 a month and there was no course of action against his mother. Given he clearly stated he couldn’t pay his debts, when they fell due he would technically be bankrupt.

Meanwhile, Keoghs Intelligence uncovered that the claimant enjoyed an expensive two week holiday in Vietnam in November 2016 followed by a lavish wedding in March 2017. Added to this was the question of who actually owned and was paying for the Land

Rover. Furthermore he was registered as the director of a company, flying in the face of the supposed fact that he was unemployed.

Given the mounting evidence revealed by Keoghs, the court adjourned the hearing to allow the claimant to file further witness evidence.

However, a clearly spooked claimant called to advise that his mother had agreed to pay the outstanding amount of £19,161 in full, which was indeed received within 24 hours… from shot in the dark to shining a light on a claimant’s fiscal lies!

Caught between an ATE and a hard place

Following a noise induced hearing loss claim being discontinued, a costs contribution of £7,500 was transferred to our enforcements team when the claimant’s solicitors advised they were chasing the ATE insurer for payment.

Following a Final Costs Certificate being issued, and 12 months after entering the agreement, we received a cheque payment. However this was returned as costs had been incurred in making the application. The solicitors then advised they were in dispute with the

ATE insurer and asked we hold any enforcement proceedings, scheduling a telephone conference in the meantime.

In response, we stated that;

The claimant solicitors then instructed a barrister who argued that our client would not be prejudiced if they had to wait further for payment. We countered that neither would the claimant solicitors and that the court order was clear as to the terms of payment.

At the hearing the district judge asked if we would accept payment of the original amount with the remaining to be paid at a later date. Whilst we agreed, the barrister for the claimant solicitors stated he had no instructions and, much to the annoyance of the judge, the hearing was adjourned.

On resumption the barrister advised that he was not able to agree to the proposals as the claimant solicitors only had £5,000 in their client account.  The district judge then ordered that the application by the claimant solicitors be dismissed, awarding a further £750 costs against the claimant and stated that the claimant solicitors should have prepared for this eventuality.  

The hearing then lead to the claimant solicitors and ATE provider entering discussions, with the ATE provider has since made payment on several cases including this one.

As Seen on TV

Our final example was the result of a fraudulent claim which was struck out with the three claimants ordered to pay costs of £20,000.

Whilst all three were covered by ‘after the event’ insurance, the provider would only pay out for one claimant as they deemed the other two to have been fraudulent. Enforcement action was commenced against all three and, although contact was made, there was little movement. Eventually the officers became impatient and started to remove the family car, which in the context of the amount owed, had little value at £2,000. At this point the claimants made a part payment and the vehicle was released.

An arrangement plan was entered into following which the claimant’s solicitors became involved and eventually full payment of the costs and interest was made via the ATE provider (even though fraud had been pleaded). This resulted in a full recovery and is due to air on the TV programme Can’t Pay? We’ll Take It Away!

For more information please contact:

Karen Berry
Associate
T: 01204 677261
E: kberry@keoghs.co.uk

Annara Rodger
Litigation Executive
T: 01204 677279
E: arodger@keoghs.co.uk