Referral fee ban looms, but can it be enforced?

Today, I simply point you to an article in the Guardian (I found this article thanks to the CSC Bulletin) regarding the forthcoming, well proposed anyway, ban on referral fees... Those of us within the industry and in the know so to speak, fully realise the pointlessness of these politically derived proposals... they won't benefit claimants, society at large or the general public and will only benefit the massively wealthy Insurance sector in their never ending pursuit of even larger profits... That's if the ban can be enforced anyway!

The article's first lines indicate just how pointless the ban is, and more importantly, how difficult it will be to police "I pay a legitimate commission. You pay a shady referral fee. He pays a bribe. Welcome to the fierce debate over the impending ban on referral fees in personal injury claims".

So what is a referral fee? Yep, it can't be answered! Thankfully, the government has seen sense and decided against making the payment or receipt of a referral fee a criminal offence. It recognises the difficulty of defining a referral fee in such a way that ensures less straightforward arrangements are caught and lead to a conviction beyond reasonable doubt. While there is some sense in this, it also feeds the perception that the ban is more about politics and being seen to clamp down on the "compensation culture". In part this is because the bill includes a crucial get-out clause. A payment will not be a referral fee if the regulated person can show it was "consideration for the provision of services or for another reason".

So it looks like our wonderful Government are doing nothing more than blowing hot air up the you know what's of the you know who's in order to play politics and hope for more votes in the future!

Anyway, follow this link to read the article in full! http://www.guardian.co.uk/law/2011/dec/06/ban-referral-fees-looming?INTCMP=SRCH

Direct 2 Solicitors Ltd remains committed to assisting vulnerable and injured clients in the pursuit of a just settlement for the suffering that they have endured.

Beware liars and cheats - £40k Compensation Claims scammers found guilty

Some good news to come out of the courts in the last few days is the fact that two fraudulent lying friends who foolishly and illegally decided that they would claim against Zurich and Allianz Insurance policies in made up ‘slip and trip’ and ‘RTA’ claims scams have both been found guilty and been handed two year suspended sentences.

One claimant, Salina Seepersand managed to obtain the hefty sum of almost £40,000 from the insurers by making up claims against an employer for a car crash in a company car and later by inventing a fake slip accident in a shopping center and claiming against them for the fall. In both cases, it was indicated that a Jay Singh had witnessed the incidents.

In the first instance defendant Salina Seepersand, a lawyer for East Hertfordshire District Council made a claim against an Allianz insured shopping centre, after she claimed to have slipped on stairs in 2004. After spinning a web of lies, Allianz accepted liability as it had been claimed that the 3rd party had failed to dry the floor or provide sufficient signage after cleaning to highlight the risk of slipping hazards.

Allianz initially defended the claim on the basis that hazard signs had been displayed but eventually had to give in when witness Jay Singh came forward, supporting the claimant’s allegations. The claim was subsequently settled for just under £30 000.

In the second case, a claim was made against Zurich by Seepersand. The truth was that she had driven her BMW company car, insured by Zurich, into a stationary vehicle and was at fault. However, Seepersand created a fake claim involving her willing witness (Singh) in which he was alleged to have driven into the back of her vehicle. Zurich initially paid out £7,000 but instructed DAC Beachcroft to investigate the matter.

The law firm found the defendants were involved in the 2004 claim. They were reported to Surrey Police and arrested. Seepersand received 12 months for the first incident and nine months for the second, suspended for two years and 40 hours community service. She will also have to repay £18000 in the next 18 months.

Singh was handed eight months for the 2004 case and 12 months for the latter, which was also suspended for two years. The Crown will sell the car and credit the money to Zurich.

Scott Clayton, fraud investigations manager at Zurich said: "Cash for crash incidents are increasing and it’s a crime that affects all law abiding customers through increased premiums.

“Mrs Seepersand was a local government lawyer with experience of criminal law so really should have known better. We really want the message to get out that Zurich always looks to prosecute people who wilfully claim for things they aren’t entitled to, especially when “crashes” are staged. It’s simply not acceptable and you will be found out."

Mihir Pandya, fraud manager at Allianz added: "This conviction sends out an important message to would-be insurance fraudsters. Ordinarily these crimes would carry a custodial sentence, had it not been for mitigating circumstances that had to be considered for both guilty parties.

“The case highlights just how vigilant the insurance industry now needs to be as fraudsters are no longer relying on one type of scam to cheat the system. “Allianz continues to take a zero-tolerance approach to perpetrators of fraud in order to protect honest policyholders.”

So be warned cheats, you are not welcome and you will be found out. We welcome cases like this as the honest claimants need access to compensation. If fraud is allowed to be carried out, it jeopardises claims for the innocent and genuine claimants.

Beware of the fraudulent multi-occupant RTA claims

One of the largest sectors of the Personal Injury Claims market is Road Traffic Accident claims (RTA). It's hardly surprising when you take a second to think just how many vehicles are crammed on to the busy roads of our cities and towns. There are millions of drivers and millions of vehicles driving millions of miles every year. Therefore, there is bound to be a fairly high level of accidents involving those cars. In these accidents, the occupants of the cars often sustain injuries such as whiplash or trauma and often wish to pursue Personal Injury Compensation claims. As the law currently stands, the person deemed to be non-fault in the accident (and any passengers from any vehicle) have the right to pursue a No Win No Fee Personal Injury claim.

However, it's not as simple as just having an accident and reporting it, we and the rest of the No Win No Fee sector have an obligation to ensure that the claims made to insurers are genuine and that fraudulent claims don't get through our scrutiny of the applications made.

Unfortunately, there is a very small underbelly of fraud within the Road Traffic Accident claims market. It has been documented before, but this fraud is dominated by claimants from an particular background. The way the fraud tends to be carried out is that an accident does occur (some would say that a number of the accidents are not accidents, but in fact staged collisions of vehicles) and that one of the vehicle drivers registers a claim with their insurers to report the accident. Then the insurer receives claims from numerous family members who claim to have been passengers in the vehicle or vehicles and have been injured. In a way, it's an easy scam to pull off... If two drivers know each other, agree to 'have an accident' and one party take the blame whilst the other makes a claim and they can then split the insurance payout. If they can get a few family members down to the Doctors to complain of neck pain and get that recorded on their medical records, they can then submit Personal Injury claims for the lot of them and potentially receive thousands and thousands in compensation.

Direct 2 Solicitors Ltd is committed to taking every step possible to ensure that we do not submit any such claim.

Whilst this fraud is not exclusively limited to the community in question, it is dominated by them. I have no idea why, but somewhere along the line, the word has got out to them that this is a way to make a fast buck.

Fortunately, the Insurance industry is now aware of this problem and investigates any such multi-occupant Road Traffic Personal Injury claim in detail. Those found guilty of fraudulent claims now face jail - as has happened in the past years. You won't normally find me supporting the insurance sector, but on this matter, we are united. Fraudulent claims do no good to anybody. They make my industry look bad and there are plenty of people and organisations only too willing to fire across our bows, and they cost us all money.

Only yesterday, we were approached by a gentleman from this community, wishing to claim for whiplash and shoulder pain further to an alleged RTA in December 2010. Alarm bells started to ring when he told us he was a passenger in a 7-seater vehicle driven by a family member. He was apparently accompanied by his Brother, Brother-in-Law, Sister, Mother and a Nephew and said that they all wanted to claim. We took the instructions and details from him and then immediately checked things out with the insurers. Unsurprisingly, the Insurers reported that the accident is under investigation for fraud. A number of the details we had been given didn't match up to what the truth was and it seems that this is a claim that is not genuine and shouldn't be pursued.

Thankfully, our investigations and determination not to get involved in any fraudulent activity has saved us a considerable sum of money. If we had tried to pursue this claim, we would not receive any payment - No Win No Fee means a Solicitor only receives fees if they are successful - and would have spent a large sum of money and time on pursuing a Personal Injury claim that had no basis.

So, the moral of the story is - Beware, Beware, be very, very aware!

I should point out that we do help a large number of genuine claimants from all backgrounds!

Should you wish to pursue a claim, please call us for free on FREEPHONE 08009177456. You can also follow us on Twitter: @D2Solicitors