The Court of Appeal has found against Admiral Group in an appeal case the company brought as a result of a personal injury claim where it was proved that the claimants included a bogus passenger in their claim. Admiral based its appeal on the belief that it should not have to pay personal injury compensation to any of the claimants in a case where they have knowingly conspired to commit fraud by supporting claims for injury to bogus passengers. This decision has wide reaching implications for the insurance industry and for the millions of honest motorists who pay higher premiums to cover the cost of insurance fraud.
Admiral has issued the following statement:
We are disappointed with the verdict from the Court of Appeal.
Insurance fraud is not a victimless crime. The Association of British Insurers calculates it costs the industry around £2billion each year. This in turn means that around 5% of all car insurance premium covers the cost of fraud. So it is ultimately the honest motorists who pay through higher premiums.
The background to this appeal illustrates the lengths to which dishonest people will go in order to commit fraud. In January 2008, one of our customers was involved in a road accident in Birmingham. Our customer was at fault for the accident and so as her insurer, Admiral was responsible for the personal injury of the third parties, in this case a husband and wife in the car that was hit.
When we received the claim for whiplash from the couple, they had added a third person to the list of claimants; the mother of the wife involved. Our customer was adamant that this lady definitely was not in the car and the third party was trying to defraud us and claim personal injury damages for a person not injured in the accident.
At the County Court hearing into the case, the presiding judge agreed that the third lady was not in the car at the time of the accident, but that Admiral should still pay for the personal injury to the man and his wife.
Unfortunately fraudulent cases like this happen too frequently, and County Courts have made different decisions as to whether all claimants should lose the right to claim compensation for their injury if they try to commit fraud by supporting claims for bogus passengers. These conflicting decisions have cost the insurance industry millions of pounds.
This has meant there is no precedent in law, and this is one reason we decided to appeal in this case and take the matter to the Court of Appeal. Our policyholder was willing to testify for us and we felt we had a very strong case, however the judge found against us.
Had he found in our favour, this would have become a precedent and Admiral and all other insurers would have been able to throw out all cases where dishonest people try to claim personal injury compensation for bogus passengers.
Although disappointed by today’s decision, we will continue to fight for honest motorists and contest cases such as these and any others where we believe a fraud has been committed.
We have not ruled out further action in this case, including the possibility of criminal proceedings.
