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Keoghs and Liverpool Victoria uncover fraud ring guilty of ‘wicked conspiracy’

News And Events24/04/2019

Elderly insureds targeted by organised fraudsters, as collaborative investigation results in successful defence of multiple litigated claims with more trials pending

Keoghs Counter-Fraud and Intelligence teams have combined to expose a fraud ring that sought to exploit older drivers by inducing a series of minor collisions predominantly in supermarket car parks.

Trials to date have seen insurers awarded over £35,000 costs and £25,000 exemplary damages following judicial condemnation of a ‘wicked’ ring.

Background

LV= instructed Keoghs in November 2016 to defend a claim relating to an “accident” that had occurred in a supermarket car park. Although the insured driver accepted reversing from a parking space into contact with the claimants’ vehicle, he stressed he was moving at very low speed when the other car appeared from nowhere, travelling in the wrong direction.

Evidence

Working closely together, Keoghs and LV= undertook extensive investigations and database interrogation culminating in the identification of a significant body of claims sharing numerous troubling commonalities.

Every incident involved a defendant policyholder aged 60–90 years, the oldest being 102, who had hit another vehicle at low-speed in a supermarket car park or while pulling away from the roadside.

All occurred within a one mile radius in Rochdale with consistency in solicitor, motor engineer and credit hire company.  On a number of occasions the same hire car also featured.   

A ring uncovered

Concerned by the mounting evidence, Keoghs liaised industry-wide in terms of 23 connected “accidents” all of which were probed on behalf of affected insurers.

An Operation was promptly established focussing primarily on those subject to active proceedings with Amended Defences entered drawing out the striking similarities and to plead fraud.  Counterclaims were also issued in the Tort of Deceit and case management directions obtained to have certain cases listed consecutively.   

Trials

The first cases were heard in 2017 in Manchester County Court, found to be fraudulent on the claimants not attending and LV= awarded indemnity costs of £35,000.  Keoghs’ enforcement team were tasked with recovery and recently received the last instalment of the full amount.

Two further actions were tried at Manchester County Court in January 2019.  The claimants in the first failed to show leading to dismissal with the learned judge finding the defendant driver had been deliberately targeted.  The counter claim was awarded in full alongside £25,000 exemplary damages.

The second matter proceeded immediately after with the claimant present but dismissal, a finding of fraud and successful counterclaim with additional exemplary damages was once again the outcome.   

Overall savings in the latter two claims alone exceed £55,000; others within the Operation are due in court over the next few months.   

Deputy Director of Fraud Rings, Sarah Moat, was delighted with the results, saying;

“It is sadly plain that fraudsters have no qualms in targeting potentially vulnerable road users. The robust defence of these claims by Keoghs and LV= should send a very clear message to anyone orchestrating that they will not be tolerated.”

Matt Crabtree, LV= Linked and Organised Fraud Manager, said;

“This is a great result for LV= and proof that intelligence-driven investigations are key to defeating organised crime gangs.  Working with Keoghs we were able to uncover those preying on potentially vulnerable customers and bring them to justice. Awards of exemplary damages sound a decisive warning that fraud doesn’t pay, as we will always pursue the strongest possible financial and criminal sanctions when confronted with fraudulent claims.”

 For further information, please contact Sarah Moat