Insurance fraud is common, in fact, according to the Motor Insurers Bureau in Ireland, one in eight claims are deemed ‘suspicious’.
Since August last year, it has become compulsory that fraudulent claims are forwarded to gardai as part of a bid to combat misleading claims.
Fraudulent claims and providing misleading or false information is a criminal offence and if convicted, individuals can face up to 10 years in prison or a €10,000 fine.
Following a recent Judgment, President of the Circuit Court, Mr Justice Raymond Groarke examined the definition of fraud and the burden of proof required to prove that a matter is indeed fraudulent.
This was during the hearing of cases, Peter Slattery v Belinda McLoughlin & the MIBI, Ian Doyle v Belinda McLoughlin & the MIBI, Samantha Byrne v Belinda McLoughlin & Zurich Insurance Plc, and Jessica Byrne v Belinda McLoughlin & Zurich Insurance Plc. The Defendant in all four cases, Zurich Insurance Plc, contested the road traffic accident claims, alleging that they were staged.
Mr Justice Raymond Groarke commented, “There is a fraud where one party makes a material statement knowing it to be false, or without belief in its truth, or reckless, not caring if it is true or false. The conduct must be dishonest by the ordinary standards of reasonable and honest people. Carelessness alone is insufficient.”
When examining the burden of proof, Justice Groarke endorsed the views and approach taken by Justice Quirke, in Mary Farrell v Dublin Bus (2010) IEHC 327.
Justice Quirke stated that: “The burden is not as weighty as the burden which rests upon the state during the prosecution of criminal offences... I take the view that an adverse finding under s. 26 of the Act, has such grave implications and consequences for a Plaintiff that the court should not make a finding unless it is satisfied that it is highly probable that the evidence which has been given or adduced by the Plaintiff has been false or misleading in any material respect".
Justice Groarke also relied on Justice Henchy’s definition of when a Trial Judge should find that a claim is a fraud. In 1987 Justice Henchy said, "Proof of fraud is frequently not so much a matter of establishing primary facts as of raising an inference from the facts admitted or proved… If the Court is satisfied on balancing the possible inferences open on the facts, that fraud is the rational and cogent conclusion to be drawn, it should so find."
Zurich revealed that a number of passengers involved in the accidents in question were connected to each other. With this evidence, Justice Groarke "pushed the explanation of coincidence off the cliff".
Justice Groarke found all four claims were fraudulent, through planned accidents were willing participants.
There are a number of key learnings which can be taken from Mary Farrell v Dublin Bus. Justice Groarke provided a concise example of the current law and fraud in Ireland, placing the burden of proof upon the defence in order to prove that the matter is a fraud. It can also be taken from this case that the burden of proof in fraudulent insurance case is higher than the normal civil standard of "on the balance of probabilities" but not as high as the criminal standard of "beyond a reasonable doubt".
Mary Farrell v Dublin Bus follows in a string of fraulent motor insurance claims, including one made against BLM client, 123.ie. In this case, BLM succeed in saving 123.ie up to €1 million, in turn avoiding hiking premiums for customers. This is a crucial win as BLM continues to tackle potentially deceitful claims on behalf of clients. Such a monumental cost would have had a detrimental impact on the insurer and the primary sufferers of the fallout would have been the insurer’s customers, who would have seen an inexplicable increase in their motor insurance premiums. It is for this reason that BLM calls for policy reform in terms of motor insurance claims.