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Delaying tactics of Insurers

By Karen Fleming, Solicitor

Third Party Insurers increasing unwillingness to deal with claims efficiently and use of delaying tactics by making unsupported allegations of fabrication and exaggeration means that more cases are going to court.

You may recall that we previously advised of an increase in insurers making investigations into claims which they suggest may not be above board. In fact what we are finding is that Insurers will simply ask many questions which have little or no relevance to the claim and are put in such a way that they suspect the claim to be fraudulent without actually confirming so.

As stated previously it is as much in the interests of a law firm as an insurer to identify a fraudulent claim. Law firms do not benefit by having fraudulent claims in their case load as they are a waste of Lawyers time, money and effort and not to mention the effect it could have upon the firm’s reputation.

Third Party Insurers increasing unwillingness to deal with claims efficiently and use delaying tactics by making unsupported allegations means that more cases have to be litigated by Law firms in order to force insurers to act. Once a claim is litigated if an insurer wants to raise the issue that the claim is Fraudulent then this must be pleaded within the proceedings and this can only be pleaded where there is evidence to do so. This was upheld in a recent case which should be seen as a warning to Insurers.  In the case of Clarke v Maltby  the Claimant sought, and obtained an order  that the Defendant pay the entire costs of her action on the indemnity basis due to the Defendant’s conduct throughout the case. The claimant also argued that the application for indemnity costs was justified as the conduct in this matter was conduct which was as Lord Woolf C.J stated in Excelsior Commercial v Salisbury Hammer [2002] EWCA Civ 879 as being ‘outside the norm’.

This case is an interesting one not least because the Claimant herself was a Solicitor and who had given up her job due to her injury but also because it demonstrates the effects of cost consequences for making unsupported allegations of exaggerated and fabricated claims. In this case and during the course of the trial the Defendant alleged that the Claimant was exaggerating her symptoms and that there was no need for her to have given up her employment. Not only did these allegations imply that the client was acting dishonestly it also suggested that she was doing so purely in an attempt to exaggerate her claim for damages. In fact it should be noted that the medical experts who were called upon to give evidence on behalf of the Defendant were heavily criticised and their evidence was disregarded.

In order to consider the application the Court had to take two aspects of the defendants conduct into consideration.  These were firstly the approach of the defendants legal team to the trial and the defendants failure to put forward any realistic offers to settle before the case began or as it continued and became clear that things were not going as they had hoped..

On considering the first point the Court had to consider the following points:-

• The tone and content of the counter-schedule;
• The allegation that the Claimant had exaggerated her claim for damages;
• The allegation that in doing so she gave up her job without good reason;
• The complete absence of any support for the plea from one of the defendant’s medical witnesses;
• Lamentable performance of those witnesses  both in the reports prepared and in their oral evidence;
• And, the hostile and inappropriate tone and content of cross-examination

The Trial Judge Owen. J stated that when considering what order to make the Court must take into consideration the conduct of the parties and the manner in which they had either pursued or defended their case, a particular allegation or issue in accordance with CPR 44.3(4) and CPR 44.3(5).

The Judge confirmed that whilst it was appropriate for the Defendant to put the Claimant to proof in relation to the extent of her injury and the effect on her employment it was not appropriate to aggressively attack the Claimant by stating that she was exaggerating her symptoms when they had no proof of such and it had also not been pleaded. The Judge even went on to say that this was particularly nasty given the Claimant’s profession as a Solicitor whereby her reputation was important.

The lesson therefore to be taken by insurers from this case is that a case should never be advanced without  evidence to support such allegations.

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