Direct Line Insurance lost their case against Mark Noble this week in the High Court. In 2008 the insurers had to pay Mr Noble £3.3 million following a motor cycle accident which had taken place in 2003. After the case was settled a neighbour contacted the Insurance Fraud Bureau to say that Mr Noble was not disabled.
Direct Line then decided to have Mr Noble secretly filmed. In 2009 Direct Line obtained an order freezing Mr Noble’s assets and later the case was re-opened to see if Mr Noble had been guilty of fraud and whether the award of damages should be set aside. Therefore there was much at stake both for Direct Line and for Mr Noble during the hearing which took some 8 days. Judgment was given this week in favour of Mr Noble who will keep his damages.
Widespread criticism of Direct Line has followed the news report on this case.
How far should insurers go to detect fraud?
In Mr Noble’s case it appears that the insurers went after an innocent man. Having acted for both defendants and claimants I know that there are times that claimants do not tell the truth. Insurers are on occasion justified in secretly filming a claimant when fraud is suspected. There have been cases when secret surveillance has provided clear proof of fraud and/or exaggeration. In Mr Noble’s case the insurers appear to have gone after the wrong man and have failed in a somewhat spectacular way. I anticipate that Mr Noble’s relations with his neighbour who contacted the Insurance Fraud Bureau might be a little frosty in the near future too!
Marek Bednarczyk, Partner, Civil Litigation
Showing posts with label insurance companies. Show all posts
Showing posts with label insurance companies. Show all posts
Friday, 18 March 2011
Tuesday, 15 March 2011
Compensation culture - a harmless merry-go-round or something more sinister?
Some mornings it seems that representatives of the insurance industry are queuing up to appear on the radio complaining about the so called ‘compensation culture’. Many people are surprised to learn however that they are actively participating in the increase in the number of claims about which they so bitterly claim.
The House of Commons Transport Select Committee has recently shone some light on the murky world of these referral payments. Essentially insurance companies put people who make a claim on their insurance in touch with panel firms of solicitors who pay the insurance companies referral fees reportedly averaging between £200 and £1,000 per case. The law firms then make claims on behalf of these clients which are often dealt with by other insurers who then complain about the rise in claims but in particular that element of the cost of those claims which represents legal costs. Common sense suggests that the presence of these referral payments in what the Committee referred to as ‘a merry-go-round’ must increase the cost of the overall process somewhere. Surely a simple solution for these insurance companies who complain so bitterly about this would simply be to stop paying these referral fees such that costs would be reduced. Unfortunately the insurance industry makes a lot of money from these referral payments. In one sense of course the insurance companies do not necessarily lose out from a rise in premiums. A relatively harmless merry-go-round or something more sinister – what do you think?
Paul Grimwood, Partner, Civil Litigation
The House of Commons Transport Select Committee has recently shone some light on the murky world of these referral payments. Essentially insurance companies put people who make a claim on their insurance in touch with panel firms of solicitors who pay the insurance companies referral fees reportedly averaging between £200 and £1,000 per case. The law firms then make claims on behalf of these clients which are often dealt with by other insurers who then complain about the rise in claims but in particular that element of the cost of those claims which represents legal costs. Common sense suggests that the presence of these referral payments in what the Committee referred to as ‘a merry-go-round’ must increase the cost of the overall process somewhere. Surely a simple solution for these insurance companies who complain so bitterly about this would simply be to stop paying these referral fees such that costs would be reduced. Unfortunately the insurance industry makes a lot of money from these referral payments. In one sense of course the insurance companies do not necessarily lose out from a rise in premiums. A relatively harmless merry-go-round or something more sinister – what do you think?
Paul Grimwood, Partner, Civil Litigation
Monday, 7 March 2011
Legalised profit increase for insurers!
Insurers must be jumping for joy. Legalised profit increase!
I don’t pretend to know how premiums are calculated (all information welcome) but it was always my understanding that insurers claim they use statistics. In other words a young male is more likely (statistically) to have an accident than a young female of the same age. In other words young males are more reckless drivers so their premium is more. Similarly if you live in a high crime rate statistically you are more likely to have your car stolen than if you live in the country.
When we seek a quote all this information is apparently applied in setting our individual premium. Is there anything wrong with that? Is applying reality and real life discrimination? There is already talk of breach of age discrimination in calculating premiums. Older driver’s premiums tend to be less – because (it is argued) they have more experience and drive more carefully (probably because as you get older you become aware of your own mortality!!). It is important to avoid discrimination of any kind and the law has worked hard to ensure that individuals and organisations act honourably, fairly and treat everyone equally.
However reality should not be ignored. Older people are more likely to die than younger people. Older people do have more experience. It is a fact of life and applying the reality of life is surely not always discrimination – or is it?
Bettina Brueggemann, Managing Partner, Hart Brown
I don’t pretend to know how premiums are calculated (all information welcome) but it was always my understanding that insurers claim they use statistics. In other words a young male is more likely (statistically) to have an accident than a young female of the same age. In other words young males are more reckless drivers so their premium is more. Similarly if you live in a high crime rate statistically you are more likely to have your car stolen than if you live in the country.
When we seek a quote all this information is apparently applied in setting our individual premium. Is there anything wrong with that? Is applying reality and real life discrimination? There is already talk of breach of age discrimination in calculating premiums. Older driver’s premiums tend to be less – because (it is argued) they have more experience and drive more carefully (probably because as you get older you become aware of your own mortality!!). It is important to avoid discrimination of any kind and the law has worked hard to ensure that individuals and organisations act honourably, fairly and treat everyone equally.
However reality should not be ignored. Older people are more likely to die than younger people. Older people do have more experience. It is a fact of life and applying the reality of life is surely not always discrimination – or is it?
Bettina Brueggemann, Managing Partner, Hart Brown
Subscribe to:
Comments (Atom)