Crash for cash drivers to pay £300,000

Mr Justice Holman said: "This was not a case of contrived accidents where two people seek to arrange an accident to defraud an insurance company. Ordinary members of the public were used and innocent drivers involved. Members of the public have been used as pawns.

Could have been injured

"It is no thanks to the defendants that few of the victims were injured at all, but even minor injuries can result in serious consequences. This is not to mention the inconvenience and expense that these innocent drivers were put to.

"The court needs to send a clear message to those who engage in conduct of this nature - that this will not be tolerated and in my judgement this award of exemplary damages is entirely appropriate."

But the police have yet to act on the fraudsters involved in what became known as operation Orion. The boys in blue are blue in the face from prosecuting a previous fraud ring (operation Contract). And two of the defendants in this case had to leave court to be sentenced in the other case.

Investigation

Ruth Needham from Keoghs investigated operation Orion. "A couple of drivers had phoned their insurer to say they had hit a car on a roundabout but that they were suspicious because there had been no reason for the car to stop. It happened that both insurers instructed us to investigate," she says.

"Both drivers had kept the piece of paper with the other driver's details and, although they had different names and addresses, they both had the same mobile number."

All insurers were then notified, though the Insurance Fraud Bureau, to look for that number and 80 cases were flagged up. In just 30 of them had the innocent driver kept the original piece of paper - the evidence the lawyers needed.

Fear they will be killed

A "Mr Big" paid drivers to drive round quiet, rarely used roundabouts, often in industrial areas, until a car was behind them, and then to stop suddenly.

They would then claim not just for the damage, storage and hire car, but for between two and five passengers having 12-18 months of whiplash. Each claim would cost insurers about £30,000.

Despite each defendant being offered the chance to be removed from the court action if they would name the "Mr Big" in a prosecution, all refused saying they feared they would be killed. The lawyers know the name. The law prevents us revealing it, protecting the criminals, not the innocent.

Homes galore

In the end the insurers sued 57 people over 30 accidents throughout Greater Manchester between October 2005 and October 2006. Some 47 settled in advance with 10 saying they would contest it. Just five turned up to court (two having to leave to be sentenced for another fraud half-way through).

They said they could not pay - obviously. But Keogh had already done land registry searches, for example, and several had to admit to owning houses - one had three homes. Another said in court he had, the day before, transferred his house to his son. Keoghs has registered claims against their properties.

Stop the cheats

The insurers are clearly delighted. Aviva and insurers owned by RBS - NIG, Churchill and Direct Line - had the bulk of the cases.

Kate Lotts, Direct Line's specialist claims director said: "This is a milestone victory against a fraud ring that carried out a well organised operation to cheat policy holders out of millions of pounds. It demonstrates what a useful tool this kind of civil action is for insurers in bringing fraudsters to justice."

Dominic Clayden, Aviva's director of claims said: "We will always take action against the small minority of people who are dishonest and fraudulent, and fight to protect the interests of our honest customers."

Working together

Ursula Coulibaly, head of financial crime operations at LV, another of the insurers involved in the action, said: "This is an excellent example of insurers working together for the benefit of both the industry and consumers.

"Cash for crash fraud rings have a significant financial impact on the insurance industry but more importantly put law abiding motorists safety at a significant risk. LV= is delighted the judge has seen fit to award these damages and we hope this will give insurers the confidence to bring civil action for similar cases in the future."

Police response

But now it is up to the police. None of these fraudsters has yet been arrested because the police are too busy. And the Mr Big who paid all these fraudsters is still at large. Well done to the insurers. It's time the police caught up.

Anyone with information on insurance fraud should call the Insurance Fraud Bureau's free and confidential Cheatline on 0800 3282550 or contact them online at www.insurancefraudbureau.org.

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Insurance Fraud Bureau
Keoghs
Aviva
Churchill
Direct Line
NIG
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