The courts are getting heavy with dangerous drivers who stage accidents to put in dodgy insurance claims. A crash-for-cash ring which targeted innocent drivers in Manchester has been hit with record damages of almost £400,000 after a judge decided to crack down on the practice.
"The court needs to send a clear message to those who engage in conduct of this nature that this will not be tolerated and, in my judgement, this award of exemplary damages is entirely appropriate," said Mr Justice Holman at a Manchester court recently.
He awarded £92,000 exemplary damages against the 57 criminals – on top of the £300,000 of damages won by the seven motor insurers which had brought the case. Exemplary damages are a tool that judges use to make an example of someone they feel has committed a serious act of dishonesty.
The group staged 30 accidents throughout Greater Manchester between October 2005 and October 2006 with the circumstances the same in every case. Their modus operandi was simple: the dishonest drivers stopped suddenly – and unexpectedly – at a quiet roundabout meaning the innocent driver behind would crash into the back of their car. Claims were then submitted for both damage to vehicles and personal injuries.
Crash-for-cash crooks risk the lives of their victims as well as pushing up the cost of insurance premiums - the Association of British Insurers reckons fraudulent claims cost the industry £4m every day, which adds nearly £40 to cost of the average motor policy.
But it's the dangerous nature of the crime that Justice Holman highlighted. "This was not a case of contrived accidents where two people seek to arrange an accident to defraud an insurance company. Ordinary members of the public were used and innocent drivers involved. Members of the public have been used as pawns," he said.
"It is no thanks to the defendants that few of the victims were injured at all, but even minor injuries can result in serious consequences. This is not to mention the inconvenience and expense that these innocent drivers were put to," the judge added.
The crooked claims came to light after insurers noticed links between the accidents. Further significant discrepancies in the claims were uncovered during in the four-year investigation known as Operation Orion.
In the original liability judgment in November, Justice Wyn Williams said: "Operation Orion has uncovered dishonest conduct on a large scale. Those who have allowed themselves to become involved in a staged accident and who, thereafter, have sought to benefit financially from it, have also probably committed significant criminal offences. Such offences are not simply about money. Innocent drivers and passengers who had the misfortune to be in the vehicles targeted for staged collisions were put at significant risk of injury."
Insurance companies welcomed the judgment and said they will do all they can to stamp out the menace of crash-for-cash. "This judgment sends out a clear message that insurers take the investigation of suspicious claims extremely seriously," said Kate Lotts, director of specialist claims at Direct Line.
"This is a milestone victory against a fraud ring that carried out a well organised operation to cheat policy holders out of millions of pounds. The success demonstrates what a useful tool this kind of civil action is for insurers in bringing fraudsters to justice. This result sends the strongest possible message to criminal gangs that the insurance industry is no 'soft target'."
Research last year from moneysupermarket.com suggested that the recession encouraged a million motorists to consider trying to raise money by staging a motor accident to make a claim on their insurance. But anyone caught not only faces a fine. People found guilty of crashing-for-cash can have official "fraud marks" added to their licence which can make it almost impossible to get cover in the future.
Anyone with information on insurance fraud should call the Insurance Fraud Bureau's confidential Cheatline on 0800 3282550 or contact them online at www.insurancefraudbureau.orgReuse content