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Finding other people’s hands in your pockets

Fox & Ors. v McLoughlin & LV=

The bringing of contempt proceedings is a useful tool in an insurer’s armoury and can prove to be a strong deterrent against those who attempt to bring fraudulent personal injury claims, especially those who are serial claimers.

DWF Partner, James Pinder takes a brief look at how the threat of contempt proceedings in this case, in which he acted for LV= was enough to convince a group of individuals, who had dishonesty sought damages for personal injury to pay LV= £25,000 in damages and costs.


The claimants had all suggested that they had been injured in a road traffic accident on 13th December 2013, when two cars, each containing four people, collided. LV= received seven injury claims, all supported by reports from medical experts, plus associated special damages. Some payments had been made pre-litigation.

Intel searches revealed that the claimants had been involved in previous similar accidents and postings on social media revealed the parties were all friends. Upon proceedings being served, a defence of fundamental dishonesty was filed, together with a counterclaim for repayment of the sums paid pre-litigation. The claimants’ solicitors came off record, and DWF were successful in applying for the case to be struck out, with judgment on the counterclaim. The court also ordered the claimants to pay the costs of the action.

The defendant then began contempt proceedings on the basis that the claimants had made statements that they knew were not true and shortly thereafter, the claimants offered to purge their contempt and pay £25,000, representing the counterclaim at c£12,000, together with the costs of the action and the costs of the contempt proceedings of around £13,000.

The following points emerge:

  1. These claimants were on the face of it ordinary people with decent jobs. They clearly regarded insurance fraud as something of a risk-free hobby. These claims were not their first. However, they were their last.

  2. Having paid over £25,000, it was felt that little purpose would be served by pursuing the contempt proceedings any further. In these circumstances, most judges would be reluctant to make a formal finding of contempt and even more reluctant to impose a custodial sentence. It is important to understand the purpose of contempt proceedings. The justice of the Old Testament is all very well in theory, but what is our purpose in fighting fraud?

- To defeat the fraudsters

- To restore clients to their ‘pre-fraud’ position by ensuring that they are not out of pocket as a result of the fraud – as was the case here.

- To deter further claims – our client felt that these claimants had certainly learned their lesson.

Indeed, so we understand, the repayment was obtained at least in part from the claimants’ parents who were understandably none too pleased! Often a financial penalty can hurt as much as, if not more than, imprisonment.

It goes to show that the Utopia of restorative justice and defeating fraud can go hand in hand.

DWF receives Data Analytics Excellence award for tech-driven counter fraud innovation

DWF has been awarded the ‘Data Analytics Excellence’ accolade at this year’s Insurance Times Tech & Innovation Awards, which recognise the insurers, brokers and law firms whose innovative solutions are transforming the insurance landscape.


For further information please contact James Pinder, Partner on 01772 556 677.

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.