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Fraudulent Claims – A Sledgehammer to Crack a Nut

14th June 2012

The insurance industry is justifiably concerned about the volume of fraudulent claims which continue to be brought by highly dishonest (and criminal) members of the public. These fraudulent claims reportedly cost the insurance industry millions of pounds annually and leading insurance firm, Keoghs, have identified Birmingham, closely followed by Liverpool, East London, North London and Bradford as the major hotspots of this criminal activity.

Insurers have put a lot of time and money into financing their “counter-fraud” strategy but this has not included sharing information and intelligence with claimant solicitors. The Motor Accident Solicitors’ Society, of which one of our partners, Tony Goff, is a former Chairman, has consistently told the insurance industry that claimant lawyers wish to work with them to eradicate this problem.

As an aside to this problem with fraud, the insurance industry appears to have persuaded the Government of the need to make claims for whiplash injury much harder to pursue in the future by creating a panel of agreed independent medical experts. They have also suggested an increase in the small claims limit for personal injury actions from the present £1,000 to £5,000 having dismissed such an idea out of hand only as recently as February this year.

This, I would suggest, is the wrong way of dealing with what is a genuine problem. Making it impossible for everyone to claim damages will doubtless stop fraudulent claims but it will also harm the thousands of genuine whiplash victims who will be caught up in the crossfire and will be unable to bring claims.

The Government needs to remember that access to justice is one of the main planks of a civilised society and that taking a sledgehammer to a problem is not always the best way of solving it.

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