Staged accidents: Similar fact evidence – Operation Percutter
Ostrach v McGreal and Others
21 August 2013
Central London County Court
In a judgment handed down on 21 August 2013, following a 13 day trial in the Central London County Court, HHJ Mitchell dismissed claims for damages arising out of eight road traffic accidents.
James Stevens, Associate in DWF’s insurance fraud team, was instructed by QBE, RSA and KGM Insurance in relation to four of these cases. In all four the Designated Civil Judge for London made a finding that the accident had been deliberately staged.
James explains the background to the investigation and the judgment which sends out strong messages to both prospective fraudsters and the solicitors who bring these cases.
Background and investigation
Similar accidents had previously been the subject of Operation Percutter, a Metropolitan Police investigation into suspected deliberately induced collisions in the London area. DWF was instructed to investigate and defend claims arising from 17 road traffic accidents that the insurers believed were linked to this organised fraud ring. Following a robust repudiation by DWF and its insurer clients 13 of these cases were not pursued by the claimants. Four however proceeded to trial. The total value of all the DWF cases exceeded £1.2 million, including claims for personal injuries, vehicle damage and credit hire charges.
The insurers, through the use of their own and DWF’s sophisticated fraud detection processes, were able to identify a pattern of road traffic incidents where their insured drivers had reported irrational braking manoeuvres on the part of supposedly non-fault drivers. In all cases the insured was driving a commercial vehicle. Such vehicles are often targeted by fraudsters due to their slow braking ability and the likely guarantee that the vehicle would be insured. Furthermore, in all cases it was suspected that the claimants were acting in cahoots with a further untraced vehicle ahead which executed a manoeuvre that was intended to provide the claimants with a legitimate reason for braking. The insured drivers however alleged that the claimants had braked excessively in the circumstances to either a halt or a near halt. They also alleged that certain individuals who had presented claims for personal injury and loss were not the individuals that were present at the accident scene.
A further common feature was that the claimants would then use the services of a handful of accident management companies that the insurers were able to link together due to relationships between the directors of those companies. All of the claimants were then represented by The Nesbit Law Group.
During the course of the litigation DWF became aware that Keoghs were acting on behalf of other insurer clients on a number of road traffic accidents also linked to the same organised scam. DWF approached Keoghs to discuss conjoining the two groups of cases and were instrumental in ensuring that the cases were case-managed together and tried consecutively before one judge. Common ground was recognised between the various insurers and it was agreed that a “strength in numbers” approach would benefit all. It transpired that over 50 road traffic accidents could be identified as being linked to this scam. The defendants in both groups of cases asked the judge to provide a composite judgment on all cases following his consideration of similar fact evidence that the insurers contended indicated a pattern of organised insurance fraud.
Similar fact evidence
DWF obtained similar fact evidence statements from DC Roger Crawley at the Metropolitan Police and also obtained and adduced surveillance footage, taken by G4S Investigations, detailing the three road traffic accidents that formed part of the original police investigation. This evidence was relied upon by all defendants across both groups of cases. The judge considered this evidence when reaching his findings. The criminal investigation had previously led to five suspended sentences and one custodial sentence for the individuals who were found to have conspired to stage these three road traffic accidents.
HHJ Mitchell dismissed all of the claims arising out of the eight road traffic accidents. He also concluded that a number of individuals who had presented claims, to include the drivers and passengers of some vehicles, were not actually present at the accident scene. In his concluding remarks he sent out a strong message, saying
it is manifest that dishonesty was rife… I hope the message going out from this Court will be that if people lend their names to this kind of swindle they risk going to prison… I do hope that some publicity can be given to this case so that members of the public can be made aware of the consequences of members of the public getting involved, namely prison.”
He also sounded a note of warning to solicitors who consider bringing these cases that they
should think long and hard when there are no witnesses being called to corroborate the accident. This may be a pointer to the fact that the accident is staged and in my judgment it could be an abuse of process to proceed with such claims.”
DWF and its insurer clients are currently considering the next steps to be taken including whether to pursue committal proceedings.
For further information please contact James Stevens, Associate, on 0161 603 5186
This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.