Tackling fraudulent third party claims are critical in today’s society as they have the potential to save the industry approximately £100 million each year. With this in mind, Zurich fraud executives are confident that they are setting a ground breaking precedent which will leave these fraudulent claimants with no winning claims.
An example of fraudulent claims – a man from Stockport has brought forward a false claim. He stated that he has suffered life-changing injuries after falling off a forklift truck in the course of his employment. This accent allegedly caused him to fracture his ankle, and has had a detrimental effect to his future career. As a result, he is claiming £838,000 through his personal injury claim. His hearing is now preparing for a gruelling two days at the Supreme Court next week.
This man could face bringing a claim for no gain as a recent judgment has ruled in Zurich’s favour. This could lead to the industry no longer compensating the claims of third parties if part of the claim has been proven to be fraudulent.
John Latter, Zurich’s casualty claims director has described this hearing as having the potential of being “a real game changer” for the insurance industry. This would be if the majority of the five judges are in favour of Zurich’s bid of not paying the claimant a sum of £88,716. This was awarded to the claimant in 2010.
At Zurich’s London Underwriting Centre base, John Latter announced that this case is of vital importance to the insurance industry. He described it has a ground breaking decision and having the potential to create a landmark precedent for the industry of how to deal with claims which contain fraudulent components.
The whole point of the case is to try give insurers and claimants who are insured different remedies than those which are already being used. It is thought that the remedies in existence are not effective when combined with fraudulent claims. John Latter stated that he would like to overturn the current case law to allow insurers to deter fraudulent claims from being made and tackle the issue from the root.
A partner at Berrymans Lace Mawer, David Spencer, is representing Zurich. He explained that this case has reached stages so advanced in the legal process due to previous landmark cases of Shah v Ul Haq and Widlake v BAA. Zurich’s case plans to overturn both these cases in order to create new case law and have a positive influence on future cases in the sector.
Third party fraud claims are an issue with today’s compensation culture and increase of claims. With individuals being able claiming thousands through merely fabricating genuine claims and increasing their injury compensation, the current remedies available are not just in a modern democracy.
If Zurich’s claim does succeed and creates a landmark case for future cases, the industry will likely be able to deal with fraudulent cases in a more positive manner, making the current remedies unavailable to those fraudulent cases. This will not only deter fraudulent cases in arising, but also reduce the premiums of current remedies and have a beneficial effect on the UK economy.