Fraudulent behaviours have been seen in NIHL claims for some time now. On 10 March, DWF looked at some of the issues and the strategies for dealing with fraudulent NIHL claims at a briefing to over 50 clients. In 2014/15, DWF had dealt with c80,000 NIHL claims and claims were currently being received at c6,000 per month. With a lack of heavy industry, a contracted construction sector and long standing legislation in place to control noisy atmospheres, the panellists looked at what was driving those figures, figures that were typical of the wider insurance industry and what could be done to tackle fraudulent claims.
Speaking at the briefing, Ian Macalister, Partner and Head of Occupational Disease, suggested that the introduction of fixed costs in NIHL claims work “would take some of the skin out of the game”, reducing as it would the amount of costs that claimant law firms could recover. The introduction of a “MedCo like system” to expert evidence might also assist, but would need to be approached with caution in Macalister’s view.
The reforms in the whiplash claims space, together with the reduction in portal costs and the extension of the portal to EL and PL claims has seen claimant’s solicitors “follow the money” and begin handling NIHL claims, where costs are still recoverable on an hourly rate basis. This in turn has to led to a rise in the number of NIHL claims being submitted, as claims management companies farm claims, using the same approach and systems that saw the successful farming of motor claims. It is worth remembering, that claims brought after April 2013 benefit from the Qualified One-way Costs Shifting regime, and the protection afforded to claimants under that regime is well worth having when submitting speculative claims.
Fraud in this area can be classified in four broad ways:
Pure invention (a staged claim) – typically a dissolved company is identified, where there might be a lack of employment records and/or liability evidence. Claims are then presented to dissolved employer’s insurers (located via the ELTO) by individuals who might never have worked for the dissolved employer. Employment history schedules, may either be doctored, so as to suggest the claimant worked for the employer, or it might be suggested that the claimant was paid “cash in hand”, tying in with a period in time when the HMRC employment schedule shows no record of employment.
Partial invention – the claimant was a genuine employee of the company, but did not work in a noisy atmosphere (although it will have been suggested that they did), or the claimant may have worked in a noisy atmosphere, but it will be suggested that no hearing protection was provided, when it was. The claim will be supported by an audiogram that suggests significant hearing loss.
Exaggerated claims – such as claims for hearing aids that are not needed, a suggestion that the claimant is suffering from tinnitus (which, like whiplash is difficult to objectively diagnose) and a failure to concede constitutional, or non-negligent causes for any hearing loss.
Represented claims – some claimant law firms purchase claims from other practices, or buy claims from CMCs that have already been “used” once. Such claims will already have been submitted to an insurer and rejected. When the claim is submitted a second time, it will be with medical evidence and an audiogram that supports the claim. In some of these cases, the claim may be being brought without the claimant’s knowledge. This category could also include claims that have successfully been pursued and the claimant fully compensated.
Some behaviours and some counter strategies
Audiometry reports and expert evidence
For a claimant to successfully pursue a claim, they must present supportive medical evidence, in the shape of an audiometry report and a report from an ENT surgeon. Our experience suggests there is a need to review the medical evidence carefully.
Audiometry tests are often carried out in dubious circumstances, leading to questionable audiometric results. If in doubt, have the claimant retested. We have experience of retested claimants performing far better, second time around and producing results that do not suggest any hearing loss:
The first test was produced in support of the claimant’s claim and demonstrates a downward “notch” at the frequency of 4kHz, which is a key requirement for a successful NIHL diagnosis. The second test shows the outcome: note how this time the notch has disappeared. As a result of having the claimant tested a second time, it was possible to demonstrate that the claimant was not entitled to compensation.
Evidential issues do not stop with the audiometry test. A review of cases handled by DWF, suggests that, a small group of ENT surgeons are responsible for producing expert reports in a significant proportion of cases. In 50% of the cases received from the five firms most regularly encountered, the same three ENT experts had provided the medico-legal report and six ENT surgeons were responsible for providing the medico-legal report in 80% of the cases we received from those same five firms, yet there are over 1,300 medical practitioners operating in this field, according to ENT UK.
This is an unhealthy state of affairs and inevitably leads to the kinds of issues that lead to the introduction of MedCo to whiplash claims. In the case of Ferguson v Jewson Ltd, heard in Liverpool County Court, where DWF acted for the defendant, the claimant’s second ENT expert (he had dispensed with the first one) was cross examined about how passages of his report were identical to passages in the first report, even though the expert claimed to have never seen the first report. That claim was discontinued half way through the trial.
This actions of the expert in that case are very similar to the actions of the claimants’ medico-legal expert in the RTA case of McIntyre & Anor v The Home Office (2014), where the same expert had produced a medico-legal report for both claimants and where Mostyn J identified “..the identical replication of language in each report casts considerable doubt on the professional objectivity..” of the expert who reported in that case.
Inconsistencies in dates of knowledge and the date that the CFA was entered into
In a number of claims that were submitted to a dissolved company, the Form N251 submitted with the claim form, suggested that the claimants had entered into CFAs with their solicitors on 31 March 2013, but when the claimants served statements dealing with limitation, those claimants were arguing for a date of knowledge that was later than would be suggested, had the signed CFAs in March 2013 and would therefore be brought within the 3 year limitation period.
Incorrect certification on bills
Inflated costs bills are hardly a new concept, but the ability to claim hourly rates and success fees in NIHL claims, means that abuses are rife. The level of a fee earner’s experience is significant as it dictates the hourly rate that can be claimed. There have been a spate of instances where solicitors have claimed an hourly rate for a fee earner, which would mean that that fee earner has more experience than they actually have. So for example, it has been claimed that the fee earner with conduct had 4 years experience as a litigation executive, when they are either:
- not qualified as a legal executive; and/or
- do not have 4 years experience
Through the use of intel techniques, it has been possible to demonstrate that the fee earner in question did not have the relevant level of qualification and/or experience to be able to be described as the grade of fee earner claimed in the bill of costs.
This is an area where any strategy to deal with these types of issues, calls for a close liaison with disease teams, intel teams and costs teams. In some instances, whole bills have been struck out.
What is being done to tackle abuses?
In July 2015, the MoJ asked the Civil Justice Council to look at what could be done to tackle the spiralling number of NIHL claims and the types of behaviours discussed here. In September 2015 a CJC Working Group was set up to identify claims handling improvements and the basis for a fixed costs regime (not the level of those costs). The Working Group are due to publish their final report in April, although work will still be needed to decide on what level any fixed recoverable costs should be set.
Might the CJC suggest a change in the pre-action protocol that would see more claims being submitted to the Portal? As things stand, only 1% of NIHL cases settle in the Portal.
In their final report, the Insurance Fraud Taskforce supported reform in the NIHL claims arena and also identified a need to improve the quality of medical evidence seen in NIHL claims and perhaps in the future, we may also see a “MedCo like approach” to the commissioning of medical evidence.
We have touched upon some of the kinds of abuses that have been seen in NIHL claims. It is worth remembering that where it can be demonstrated that the claimant has acted in a way that is “fundamentally dishonest” and the claimant is dismissed, then a claimant who brought their claim under the QOCS regime, could lose that protection in accordance with CPR r.44.16, leaving the defendant free to enforce their costs.
The strategies deployed by claimant law firms to pursue these claims are constantly evolving and it is important be alive to new approaches tactics. Data, predictive analytics and market analysis all have key roles to play, alongside good claims handling.