It has recently emerged that the Government has accepted all of the 26 recommendations put forward by the Insurance Fraud Taskforce in their report last January.
Measures will include clamping down on unscrupulous solicitor behaviours; namely:
- A lower burden of proof before the Solicitors Disciplinary Tribunal (the civil, as opposed to the criminal, standard)
- Stronger fining powers for the Solicitors Regulation Authority (above the existing £2,000)
- Measures to discourage late claims
In respect of discouraging fraudulent late claims, the report recommended changes to the rules concerning the court, costs and evidence. Suggestions included the following:
- Reducing recoverable costs by 50% if a minor claim is notified six months or more after the accident
- Introducing a rebuttable evidential presumption that no injury occurred if claims are lodged after a certain specified period
- Older claims be allocated to the small claims track, with more recent claims proceeding as normal on the fast track
The Taskforce also recommended consulting on an obligation for referral sources to be included on claims notification forms (which would assist with fraud detection) and for claims to only proceed where this is completed.
A tougher stance was encouraged of the SRA, for example to carry out client identification checks in more cases.
The ABI was advised to discourage 'inappropriate use of pre-medical offers,' a proposal firmly supported by Law Society Chief Executive, Catherine Dixon, as the value of claims 'cannot be properly assessed against robust medical evidence.' The Chief Executive also implies that the report does not go far enough and maintains that it is critical for fraudulent and defendable claims to be defended.
The report also included proposals for insurers themselves, who were strongly invited to share data with the SRA in the event of suspected fraud or referral fee ban breaches. It was highlighted that guidance is required in respect of acceptable forms of contact between insurers and claimants, to ensure the latter has given instructions to their representatives.
The Government will outline how the proposals will be implemented 'in due course,' according to Treasury Minister Harriett Baldwin, who insisted on urgency, given the estimated cost of the problem to the country is £3bn.
Although the proposals are inevitably contested by claimant lawyers, it is hoped that they will work in conjunction with the measures announced in the Autumn Statement and the heightened claims management company regulation; in furtherance of the Government's commitment to crackdown on fraudulent activity.