Liverpool Victoria Insurance Company v Samina Bashir (First Defendant) Faisal Rauf (Second Defendant) Kaneez Akhtar (Third Defendant) Mohammed Bashir (Fourth Defendant) Kamran Khan (Fifth Defendant)
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE SILBER,THE PRESIDENT |
| Judgment Date | 28 February 2012 |
| Neutral Citation | [2012] EWHC 895 (Admin) |
| Court | Queen's Bench Division (Administrative Court) |
| Docket Number | CO/2257/2011 |
| Date | 28 February 2012 |
[2012] EWHC 895 (Admin)
President of the Queen's Bench Division
(Sir John Thomas)
Mr Justice Silber
CO/2257/2011
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT
Royal Courts of Justice
Strand
London WC2A 2LL
Mr M Grant (instructed by Barlow Lyde & Gilbert and Liverpool Victoria Insurance Company) appeared on behalf of the Claimant
Miss R Hill appeared on behalf of the First, Second, Third and Fourth Defendants
The Fifth Defendant appeared in person
The court has heard today an application by the Liverpool Victoria Insurance Company to commit the defendants for contempt. The four defendants who presently remain in the proceedings have admitted that they are in contempt arising out of false statements they have made in the case of what can only be described as a claim relating to a contrived collision.
Before setting the background to the pleas, we need briefly to explain the facts.
The facts
In April 2008, the first defendant, Samina Bashir, began proceedings in the County Court at Liverpool against Manni Kounoto, who was claimed to be the driver of a BMW. There was a claim for damages to the car and for personal injuries, which were said to have arisen out of a collision with a car that she was driving in Handsworth in Birmingham on 6 January 2008 and the BMW. Another car that was said to be involved in this collision was a Peugeot driven by the fifth defendant to these proceedings, in which there were two passengers. The second defendant was the husband of the first defendant and the third and fourth defendants, her parents; all said they were passengers in the car being driven by the first defendant.
The proceedings in the County Court proceeded ordinarily until 20 January 2009, when the insurers filed an amended defence alleging that the claim was fraudulent and there had been no collision. In the reply that was served, a denial was put forward that the claim was fraudulent. On the day the trial was to start, 17 February 2010, none of the defendants appeared. Judgment was given for the insurers, who had been joined to the proceedings.
The proceedings in the Divisional Court
These proceedings were subsequently commenced by the insurers in May 2011, and they were given leave to proceed. Last week, on 22 February 2012, the first four defendants admitted the entirety of the case made by the insurers; that is to say that they had been involved in putting forward statements in support of a claim that was fraudulent, in that no collision had occurred. The entire claim was contrived. They have admitted that the statements when made were untrue, that they were made in such a way that they would interfere with the course of justice in a material particular and they were made by them in the knowledge that the statements were untrue.
It is quite clear by their admissions and on the detailed investigations carried out by an employee of the insurer's solicitors, Mrs Alison Kirkham, that the claim was fraudulent. In the evidence that she gave to the court today, it is clear that a very painstaking and detailed investigation was carried out based on another collision that had been said to have occurred in September of the preceding year.
The matters that seem to have brought the case to the position where the insures were able to prove the fraud arise out of a coincidence between the fact that the driver of the BMW, his wife (or a relative of his who lived at the same premises as him) had been involved in the previous alleged accident In September 2007 and the driver of the third car (the fifth defendant in the proceedings with which we are concerned) and the two passengers with him had also been involved in that previous alleged accident.
When we began the case today, we had no real idea of the explanation that the four defendants who had admitted the allegations made by the insurance company were going to give. However, in the course of the proceedings today, they have provided information which is accepted by the insurers to be helpful and to be put forward in good faith.
The scale of fraud in the insurance market
Before setting out that information, it is important to set out the background of the very grave problems the insurance industry faces and why this claim is such a serious one. We were told that in the year 2010 insurers uncovered 133,000 fraudulent insurance claims—that is to say 2,500 every week—an increase of 9 per cent in the amount of such claims over the previous year. When describing fraudulent claims, the insurers are referring to two types of claim: one where there has been an accident or an incident where the claim has been exaggerated, and cases such as the present, where there has been no accident and no incident at all and are, therefore, in the real sense, bogus or contrived. Both are fraudulent but the latter category is far, far more serious.
This fraud has occurred in the area of motor insurance. It appears that in 2010 dishonest motor insurance frauds occurred on an extensive scale. There were 40,000 of them. Motor frauds were, of all the frauds, the most costly. They totalled over £466 million. The insurance industry estimates that insurance fraud costs £2 billion a year, adding on average an extra £44 a year to the insurance bill for every UK policyholder.
The detection of such fraud is very difficult. The diligence of the insurers in this case is to be highly commended. We were told that until relatively recently the police have not had the resources to investigate this type of fraud. Although, as this case illustrates, this type of fraud involves relatively small sums of money in each claim, together such claims give rise to the very large figures to which we have referred. At the beginning of this year the City of London Police have been funded by the insurance industry to set up a motor insurance and insurance fraud enforcement department which has the capacity to deal with 100 cases per month. As was said by counsel for the insurers today, that is the tip of the iceberg.
The fraud by the first to fourth defendants
We say that all by way of background to the disturbing facts which have been put forward by the defendants as to their explanation as to how they came to make this contrived and bogus claim.
It is apparent from their detailed financial records that have been put forward to us that, although the husband of the driver of the car is now at work, he was not at the time. It appears that he and his wife were at that time under some financial pressure. They were approached by a person called Manni Kounoto, the person who had been the driver of the BMW alleged to have been involved in the bogus collision said to have occurred on 6 January 2008. He had a friend called Ahmer Saddique, who is said to operate companies known as Claims UK, Claims 2000 and Claims Assist. The first and second defendant were told that they could earn some money if they put forward a claim in respect of a bogus collision. For this they were paid £600 in cash. They were provided with what they describe as a crib sheet for what they were to say to the medical doctor who wrote a report and for the statements that were provided.
A solicitors firm called Armstrongs in Liverpool acted in the claim to which we have referred. We were told that they were paid a referral fee of £500. It is said by these defendants (and of course it is right to point out that we have heard nothing from Armstrongs or from Ahmer Saddique) that they were provided with statements setting out the account of the bogus accident; and, secondly, the reply to which we have referred, which denied the claim was fraudulent, is said to have been drafted by an employee of the solicitors without any reference to them. They say that when the claim was dismissed, they were never asked for any fees by the solicitors. The solicitors never sat down and discussed the case with them or the consequences of what had happened.
The supporting evidence of the fifth defendant
Their account has support from the position of the fifth defendant. He represented himself. When the case was opened to us today, he told us what his defence was: that his signature was not on the statement; he had not been involved in the previous accident which had taken place in September of the year before the bogus accident. He had nothing to do with it. In the course of one of the adjournments we have had today to deal with the issues, he produced his passport to the insurers. The insurers checked his signature on the statement against his signature on documents that are lodged in Companies House in respect of a confectionery business in which he has an interest. As a result of that, the insurers took the decision that they would discontinue the proceedings against him as they were satisfied that the signatures on the statements said to have been made by him in relation to the collision were not his. We mention that fact because it seems to us that this provides considerable support for the account put forward by...
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