ï Integrity of motor insurers to stamp out fraud now in spotlight
ï Evidence questions the ëindependenceí of Autofocus from insurer solicitors
In the latest chapter of what is possibly the largest fraud on the civil justice system, Lord Justice Moses and Mr. Justice Irwin have granted Accident Exchange permission to apply to commit seven former employees of Autofocus to prison for contempt of court.
Former Autofocus rate surveyors Nathan John George-Broom, Elaine Carlton-Walker, Andrew Watts, David James, Laurence Gray, Keel Broom and Duncan Sadler could also face further charges of fraud if the Attorney General sees fit. Mr. Justice Irwin also raised concerns that the former owner of Autofocus, Colin McLean, should not escape prosecution.
The proceedings will increase the intensity of exposure on some of the biggest motor insurers who were beneficiaries of the alleged ëindustrial scaleí fraudulent practices of Autofocus from 2004 until they went into administration in 2010.
The seriousness of the issues raised by Accident Exchange also prompted Lord Justice Moses and Mr. Justice Irwin to direct that the evidence uncovered by Accident Exchange be sent to the Attorney Generalís office in order for them to consider whether it is appropriate to bring criminal charges for fraud.
Lord Justice Moses said: ìIt seems to appear so grave at first blush that the mind boggles. We are dealing with allegations of perjury on an industrial scale. If that does not attract the Attorney General and Director of Public Prosecutions then I donít know what will. I was flabbergasted when I read this case.”
The hearing, held at the Divisional Court in London on Wednesday 1st February 2012, follows the judgment in the Court of Appeal on 1 December 2011 of Lord Justice Aikens where evidence deployed by Autofocus in thousands of court cases on behalf of motor insurers was found to be ìtaintedî and ìdishonestî.
In the transcript of his findings which was released this week, Lord Justice Aikens said of the evidence uncovered by Accident Exchangeís anti-fraud investigation team:
ìWe are satisfied that this proposed fresh evidence, if it had been adduced at the trials, would probably have an important influence on the results in each case. If the judge had concluded that the Autofocus evidence was tainted in each case and that he could not therefore rely on it, then he would have had to say, it seems to us, that the defendants had not demonstrated that the BHR (Basic Hire Rate) was lower than the credit hire rate than was actually charged. That would mean, prima facie, the claimants would have recovered the full credit hire rate in the absence of any other evidence.î
Up to four thousand cases involving innocent motorists who were provided onward mobility by Accident Exchange, in cases where Autofocus evidence had been deployed, are now being processed for appeal.
Commenting on the success of the application, Steve Evans, Chief Executive of Accident Exchange Group, said:
ìWe alerted the insurance industry to our concerns about the dishonesty at Autofocus in 2009 and we were ignored. Over three years, and at great expense, it has taken a herculean effort to identify, to prove and then to prosecute those responsible for the fraud against Accident Exchange whilst insurers turned a ënelsonian eyeí to the issue. As directed by the Divisional Court, we will now also be sharing the considerable amount of evidence we have amassed with the Attorney Generalís office and, if required, the Director of Public Prosecutions.
The challenge now is for insurers to do the right thing and balance the books from a fraud where they were, and remain still, the beneficiaries of the proceeds of crime.î
The two leading insurers involved in the four cases heard by the Court of Appeal last December have since reached a compromise with Accident Exchange and settled all of their outstanding cases affected by Autofocus evidence.
ìUnfortunately, others have adopted a different approach,î says Evans ìWe are now confronted with different solicitors acting for different insurers all with the aim, apparently, of finding an innovative legal argument to avoid settling their dues.î
It seems that raising a complaint about a whiplash claim is enough for the combined might of the insurance industry to bring Jack Straw off the back benches, to dominate the headlines in our popular press, to convene the Transport Select Committee, to trigger a market study by the Office of Fair Trading and to influence changes in the Civil Justice System which will ultimately make it harder for the man on the street to make a rightful claim against an insurer.
ìWhen those same insurers have benefitted by tens of millions of pounds from the biggest fraud against the civil justice system ever and when Lord justice Moses confessed to being ëflabbergastedí, then the focus now needs to be on the integrity and commitment of insurers to unwinding the benefit they have gained. And for the future, the focus needs to be on the safeguards necessary to protect consumers from the power that large organisations can wield and from this situation ever repeating itself.î
According to Autofocus records, three firms of defendant solicitors (Morgan Cole, Lyons Davidson and Keoghs) made the greatest use of Autofocus evidence and five insurers (Aviva, AXA, RSA, Brit and NFU Mutual) derived the highest financial gain from its use. Whatever diligence was undertaken by those insurers and solicitors was clearly inadequate as they continued to deploy evidence from Autofocus as a matter of course long after Accident Exchange voiced its concerns in 2009.
The case returns to the Court of Appeal on 16th February 2012.
Accident Exchangeís unique anti-fraud investigation team, APU, thwarted more than £5m worth of bogus motor insurance claims in 2011. In the last quarter alone, its evidence saw the successful prosecution of fifteen individuals involved in motor-related fraud and criminal activity leading to a total of more than 80 years imprisonment.