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May 28th, 2019

PI fraud tactics under review as Dishonest Claimant faces Contempt charge

Insurers and solicitors alike will have read with great interest a recent report in the Law Society Gazette concerning the case of ‘Zurich Insurance Plc v Romaine’. 

The Court of Appeal has issued a warning to dishonest claimants and their lawyers that they will not evade the consequences of unscrupulous conduct by simply dropping their cases when they begin to unravel.

Lord Justice Haddon-Cave overturned the High Court’s decision not to proceed immediately with contempt proceedings against 69-year-old David Romaine after he had claimed for noise-induced hearing loss against his former employer but gave false submissions about not playing electric guitar in a rock band. 

Romaine told the court his solicitors, the now-defunct Asons, told him it would lodge a claim of between £1,000 and £5,000 and would do paperwork which he understood would be ‘generic’. Romaine submitted that ’at no stage’ did he sign a statement of truth or see the Part 18 responses which contained an electronic signature which had been applied by Asons.

Romaine, now acting as a litigant in person had denied having any noisy hobbies and had sought £5,000 damages from his former employer for noise-induced hearing loss. Medical records obtained by the Defendant found that he was a professional singer and motorcyclist but when questioned, Romaine stated that he did not sing professionally and did not perform with a live band, instead only occasionally practising his acoustic guitar.  

It was not until searches were made on Romaine’s Facebook page that he was found to have played electric guitar and been lead singer in a rock-and-roll band, playing regularly at pubs, clubs and larger events.  In March 2017, the defendants made an application to strike out the claim as a result of dishonesty and committal proceedings were served in September 2017 which were opposed by Romaine.

In his judgment granting permission to bring committal proceedings, Haddon-Cave LJ made no assertion on those submissions but said claimants who discontinue cases when the ‘the game is up’ should face consequences. 

In his summing up Lord Justice Haddon-Cave commented ‘The stratagem of early discontinuance should not be seen to be used by unscrupulous claimants or lawyers as an inviolable means of protecting themselves from the consequences of their dishonest conduct,’. ‘It is clear that the modus operandi of some of those involved in fraudulent insurance claims has been to issue tranches of deliberately low-value claims for e.g. whiplash, slips and trips etc and when confronted with resistance or evidence of falsity, simply then to drop those particular claims, in anticipation that it would probably not be worth the candle for insurers to pursue the matter further.’ 

Insurers will welcome this decision and the deterrent effect that this will have. Acting for a range of clients, we continue to see, identify and successfully repudiate claims arising out of staged, exaggerated and contrived accidents. It is encouraging to see the Courts taking a hard line with this type of conduct and supporting the insurance industry message to make insurance fraud socially unacceptable.

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