Prisons and Courts Bill (Second sitting)

Suella Braverman Excerpts

Committee Debate: 2nd Sitting: House of Commons
Tuesday 28th March 2017 Public Bill Committees

[Nick Thomas-Symonds]

Q You just made a statement about 70,000 cases of detected fraud and you cannot even tell me how many of those are actually proven before the courts?

James Dalton: No.

[Suella Fernandes (Fareham) (Con)]

Q I have defended parties in low-velocity impact claims, and the guidance is generally set out when an allegation of fraud is going to form part of a defence; it is set out in the Court of Appeal guidance for Casey v. Cartwright. What do you think is the problem with that guidance and how will these proposals assist? It imposes a burden on the defendant to notify that fraud will be part of the defence and, importantly, in many cases it will allow them to adduce medical evidence on the issue of causation.

James Dalton: There are a number of tools at insurers’ disposal to address the type of cases that we have just been discussing. Whether insurers choose to use them is obviously a decision for them and, as I said, Rob might be able to explain what Aviva’s position is.

However, the Government have recognised that fraud is a big problem in insurance. They established an insurance fraud taskforce, which has reported and made a number of recommendations for reform. The Government have delivered. For example, there is now a fundamental dishonesty action that insurers can plead in court, so that those claims that are so flagrantly fraudulent are kicked out of the system. We need those tools and we are using them to get rid of fraud from the system.

Rob Townend: It is a good question; I will answer two questions together. We started defending claims at Aviva a couple of years ago. We stood back and said, “Look, we’re not going to back away quickly. We are going to trust the courts to support us,” and we took a defence excellence strategy on behalf of our customers. If they are saying, “There wasn’t anybody injured. I might have been liable, but the speed of the accident didn’t cause injury,” we have been defending our customers through the courts for the last couple of years. I think we have put 1,700 through the courts; we have a success rate of something like 70%. More recently, we have had great success with fundamental dishonesty and the judges are generally starting to support us. I think we have had 174 cases where we have had fundamental dishonesty.

If we go to the other gentleman’s comment about fraud, we do not pay one in 10 of our whiplash claims. Some of that disappears when we challenge it. I invest millions of pounds in investigation analytics capability technology and we will challenge plaintiffs at the first point where we think the claim is linked to a gang and is spurious. We do not pay one in 10 of our whiplash claims at Aviva.

[Suella Fernandes]

Q Does Mr Dixon wish to comment?

Brett Dixon: Yes, I would—thank you.

In some respects, the debate has moved on from fraud and low-velocity impact. That is because of the provisions that were enacted in relation to fundamental dishonesty, which are in the civil procedure rules at rule 44.16 and in section 57 of the Criminal Justice and Courts Act 2015.

If a defendant thinks that there is fundamental dishonesty involved in a claim, they have two opportunities to challenge it. They can challenge it at the conclusion of a case, when the case is unsuccessful, and then seek their costs. They can also challenge a case if it is successful but there is a question mark over what has been claimed, and that can lead to a claimant losing all of their damages and to a cost order as well. There are sufficient drivers in the system and levers that can be pulled to discourage any type of claim like that.

It is important, though, to understand this in context. First, the most important thing is to consider proven fraud. I see in practice, from different members of our organisation, many allegations of fraud or fundamental dishonesty that are not made out when tested by the court. You only need to look at a recent Court of Appeal decision by Lord Justice Briggs in Qader & Ors v. Esure Services Limited to see that there is a developing gaming of the system by insurers to prevent people from being able to challenge those cases properly. That case was about trying to prevent a claimant from having access to the same tools to fight the allegations as a defendant has to bring them.

There was an implicit recognition from the Court of Appeal in that judgment that it is important that a person who is accused of something like that has the ability and resources to answer it. It is a serious issue for somebody accused of it and it is about what is proven fraud, rather than vague statistics of about 70,000 cases, where we are not quite sure whether it is fraud, detected fraud or suspicion of fraud and what standard that is at. It is for the judiciary to decide if that is an issue and, if it is found to be an issue, that person should be dealt with. Equally, if you are going to have access to justice and equal rights on a level playing field, they need the ability to challenge it in appropriate circumstances.

[Chris Philp (Croydon South) (Con)]

Q Welcome to our panellists this afternoon. About three years ago, my wife and I were involved in a relatively minor road traffic accident. For the year that followed that, I was phoned up on my mobile almost every week by people talking about the accident and trying to make me submit a claim for a neck injury. No matter how many times I told them that neither I nor my family had suffered any injury, they persisted in trying to incite me to commit fraud. Mr Townend, why were they doing that?

Rob Townend: I spoke a bit about it earlier: it is encouraging you to make a claim so they can access the cash. The referral fee ban that was put in LASPO obviously is not working. There are marketing fees available for people to attract you to make a claim. I agree with Mr Dixon and his earlier comment about regulation of claims management companies. Insurers and lawyers are heavily regulated; I would still like to see more regulation of the legal fraternity by the Solicitors Regulation Authority. The regulation around CMCs has been pushed back, I understand, to 2019. The referral fee ban has not worked. There is too much money still in the system and they will keep pestering. We know that. We have got a lot of examples where vulnerable customers are being contacted repetitively, like you were, until they make a claim.