1. Fraud in Motor Claims Insurance Institute of Bolton – CII
10 October 2017
Presented by
Stratos Gatzouris

2. Introduction Fraud – A voluminous area and topic
Discussing motor fraud but is all-pervasive
Awareness and gut instinct
Own experience
How presentation will benefit audience: Adult learners are more interested in a subject if they know how or why it is important to them.
Presenter’s level of expertise in the subject: Briefly state your credentials in this area, or explain why participants should listen to you.

3. Outline Fraud – What is it and extent of the problem
Profile of the Fraudster & fraud typology
Tools at our disposal – are they threatened?
Level of Proof required
The ‘Counter’ in Counter-Fraud – Defence, Sanctions & Recoveries
Current Reforms – Will they achieve their purpose?
Questions
Lesson descriptions should be brief.

4. Learning Objectives What fraud is How insurance fraud is perpetrated
The evidential means and hurdles in achieving an effective counter- fraud strategy
What the future might hold
Example objectives
At the end of this lesson, you will be able to:
Save files to the team Web server.
Move files to different locations on the team Web server.
Share files on the team Web server.

5. Fraud – What is it? Fraud Act 2006
- common law conspiracy offence retained
- created general offence of fraud – 4 ways of committing it:
i) fraud by false representation
ii) fraud by failing to disclose information
iii)fraud by abuse of position
iv)possession or control of articles for use in fraud
- Element of dishonesty & intention to gain or cause loss (except iv)
Criminal and Civil law implications

6. Extent of the Problem ABI 2014 stats in respect of 2013:
- 130,000 cases of detected insurance fraud
- combined value of £1.32billion
- 3% increase in value cf to 2013
- £837m related to motor fraud (67,000 detected)
IFB crash for cash hotspots, 2017
General trends – wider spread, less occurrences, greater value

7. Extent of the Problem – cont.
Costing & Profit Margin Example for Staged Accident (average case with 2 cars loaded)
Buy 2 written off cars: £3,000
Pay offs & expenses: £1,000
Total cost: £4,000
Reward:
Vehicles: £ 3,000
Storage & Recovery: £
Credit Hire: £ 7,000
Miscellaneous / Physio: £ 2,000
7 PI Claims: £20,000
Costs: £12,500
Total monies received: £45,000 – Profit of >£40K!
NB – Assumes some cases settled pre-proceedings, based on fixed costs and none have gone to trial – A Profitable business
Could be far worse – Taxis, hire cars, buses, fraud rings, Larger value cases

8. Profile of a Fraudster
What does it take? The opportunist, the exaggerator, the criminal
Motor Fraud:
- Staged (occurred but orchestrated) – Indicators?
- Contrived (orchestrated)
- Induced / Slam-ons (praying on the innocent, cash for crash)
- Bogus / Phantom Passengers
- Exaggeration, Fraudulent Credit Hire, LSI
- Or a combination of some of the above!
Extends to other areas e.g. Liability, NIHL, Health, holiday sickness, First Party (theft / burglary, fire, income protection, travel, life insurance etc.)

9. Tools at our Disposal
Intelligence – open source data e.g. Voters Roll, DVLA
Insurance data – MIAFTR, CUE, Past claims / data-bases, Insurance Proposals, IFIG, DPA requests
Secondary investigations: taxi licensing, weather, route feasibility, telematics, phone records, medical records, police reports, ANPR, dash- cam, CCTV
Witness Evidence and credibility
Forensic Evidence (engineering)
Looking for:
Inconsistency, lack of credibility, non-feasibility

10. Level of Proof Required
Criminal: Beyond Reasonable doubt
Civil:
- On balance of probabilities
- Concept of Fundamental Dishonesty – used in 2 contexts:
i) Costs exception to qualified one way costs shifting
ii) S57 Criminal Justice and Courts Act 2015
- What is the aim? Claimant has to prove accident occurred and loss suffered but Defence has to raise these issues e.g. Staged accident
Underlying theme: credibility

11. Level of Proof required – cont.
Consider:
Fraud & Liability
Fraud & damages
Fraud & causation
Fraud & indemnity

12. The ‘Counter’ in Counter-fraud
Defence & technical knock-out
Discontinuance
Costs (fundamental dishonesty, non-party costs)
Strike out in terms of S57 Criminal Justice & Courts Act
Counter-claim Damages (tort of deceit & exemplary)
General Enforcement
Contempt of Court & other criminal action
Private Prosecutions
Role of IFB, IFED, IFR, Fraud Taskforce, Regulation of CMCs, Medco
Publicity!

13. Current Reforms Whiplash related Fixing damages awards
Increasing Small Claims Track
Seeking to discourage minor/frivolous claims and take costs out of the system

14. The Future What about fraud in future? Consider:
- Case of Vnuk – accidents anywhere, on any type of ‘vehicle’.
- Large scale fraud e.g. buses, fraud rings
- Exaggeration
- Litigants in Person and ‘professional’ McKenzie friends
- Potential un-controlled activity from CMCs
- Application fraud
- Driverless Cars – Cyber, car theft
- Artificial Intelligence
- Other types of fraud
Will Fraud go away / increase / decrease? What do you think?

15. Questions?

16. Thank You!
Stratos Gatzouris