Personal injury awards much greater than those of other European countries are a “magnet” for people with no other purpose but to commit insurance fraud, an Oireachtas committee has heard.
John Farrell, head of claims at Aviva insurance, said making fraudulent claims in this country is a “risk free endeavour” and it is “too easy to go in to court, submit a fraudulent claim and literally walk out the door.”
He said rewards here are 4.4 times the rate of those in England and urged the Government to immediately put legislation into effect which will allow a process of reforming rewards to get underway.
“Our customers cannot understand why the Minister has not signed the Judicial Council Act into effect. Why are we waiting one more day? we call on him, sign it in today!”
Mr Farrell gave one example of a man from England who he said made a fraudulent claim that Aviva defended: “When he was called across to attend a medical for evidence for the claim he had submitted to us, he committed another single car accident on the day of the medical. So this is a very, very real problem.” he said.
In another case he said one of Aviva’s customers, involved in a minor fender-bender, with 80 euro of damage to the bumper. “There were no personal injuries reported at the time of the accident,” he said. “Some time after the accident we were presented with two personal injury claims. The first was awarded 105,000 the legal fees were presented as 98,000 subsequently adjusted down to 65,000. That was on one of the injuries. So there is a very real problem with compo culture in this country,” he said.
“It’s a common occurrence in court. People submit claims, they are fraudulent, and they do not happen in the manner that they were presented. In some case they are staged. And when these people are thrown out of court, even when they are thrown out of court, there is no effective follow up, there is no prosecution. There needs to be an effective deterrent.”
Mr Farrell said the need for follow up on fraudulent crimes is serious however there simply isn’t enough capacity in An Garda Síochána.
“We have a case of a businessman who burns down his premises. We plead fraud in open court. We have no obligation but to defend that case on behalf of innocent policy holders. We are forced to spend 21 days in the High Court at a cost of over one million euro. What happens is that that man walks away, he simply walks away from his claim.”
“That one million has to be paid by SME customers around this country. And when they say that they haven’t had a claim and why has their premium gone up, that is why. As long as claims in this country are a risk free endeavour people will continue to commit fraudulent claims. Please, we need assistance in this area and there has to be a far greater follow up on fraudulent crimes.” he told TD’s and Senators.
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