Evidence of fraud by association is used on a daily basis in the arena of fraudulent civil claims. The evidence of association, set out as similar fact evidence, is a powerful means of demonstrating that it is more likely than not (on the balance of probabilities) that the claim is fraudulent due to the claimant’s association with others involved in fraudulent claims of a similar nature.
In criminal proceedings the burden of proof is higher and therefore evidence of association alone will not be sufficient to establish that, beyond all reasonable doubt, the defendant is guilty of an act of fraud.
This does not mean that similar fact/association evidence has no role to play in criminal proceedings, but less weight will be attached to it than would be the case in civil proceedings. On this basis, not every successfully defended fraudulent civil claim will be suitable for criminal prosecution.
This is particularly important to remember when claims are being prepared for a referral to the Insurance Fraud Enforcement Department (IFED) of the police for prosecution of offences under the Fraud Act 2006.
In April 2008 Mr Wright was involved in a minor RTA in which a Volkswagen van reversed into his Mercedes car. Liability was admitted.
The Mercedes was taken to the premises of a firm called PJ Autos, a business run by Mr Wright’s uncle. Mr Wright’s claim was handled by an organisation called MJS Claims. There were four heads of claim:
- £806.67 for damage to the car;
- £1,200 for whiplash injury;
- £975.25 for recovery and storage costs payable to PJ Autos; and
- £9,090 for a replacement vehicle supplied by PJ Autos
It was suspected that the claim had been fraudulently exaggerated. Mr Wright was arrested in February 2011. The context of the prosecution was a substantial police investigation involving the activities of PJ Autos and MJS Claims which had uncovered some evidence of staged accidents and spurious claims.
In December 2012 Mr Wright was convicted of an offence of dishonestly making false representations contrary to s.2 Fraud Act 2006. He was sentenced to nine months’ imprisonment.
Lord Justice McCombe dismissed Mr Wright’s appeal against his conviction:
- The principal ground of appeal related to the admission of evidence concerning insurance claims by other members of the family. The Crown’s point at trial was that the jury had to consider the inherent unlikelihood of such a coincidence of similar genuine claims by different members of the same family.
- The trial Judge had properly directed the jury that the issue to be resolved was by reference to this one claim by Mr Wright alone. He told them clearly that there was no such thing as guilt by association.
- The simple point to be decided by the jury was: had this damage been caused deliberately after the collision or had it been caused by the accident? The evidence in this regard had been properly raised and dealt with.
- The prosecution’s case was overwhelming. The evidence of the expert was that the damage was consistent with it being caused by a forklift truck. Mr Wright accepted that he was a regular driver of such a truck. There was clear evidence that the damage had not been caused by the bumper of a van.