Insurers' poor motor claims in court

Chris Wheal

Mar 19th 2010

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A court case a against a former employee of a firm called Autofocus - egged on and commented on by credit hirer Accident Exchange - has brought into the spotlight the scandalous state of motor insurance claims.

Have a shunt that's not your fault and firms such as Accident Exchange lend you car on credit and bill the insurer. This bumps up the costs of claims. They argue, correctly, that they provide you with the service you are entitled to. If insurers offered that level of service these firms would be redundant.

But instead of trying to improve their own service standards, insurers have tried to cut the costs of the credit hire firms. Many have used a firm called Autofocus to produce reports questioning the costs firms such as Accident Exchange have billed. And courts have struck down those costs.

Day one in court

The court case, which is the first of many, raises questions about whether Autofocus was being accurate in its presentations to the courts too.

Accident Exchange reported some details in a statement to the Stock Exchange this morning. It covers the case of Helen Whyshall, heard in the Northampton County Court on 15 March 2010 before HHJ Waine.

"It is a matter of public record that Helen Whyshall admitted that she was in contempt of court by verifying a witness statement for use in proceedings with a statement of truth when it was false to her knowledge or when she did not believe it to be true.

Three further cases

"Miss Whyshall informed the court that she was also guilty of three further similar contempts of court.

"HHJ Waine imposed an order committing her to prison for 28 days and ordered her to pay costs. In mitigation Helen Whyshall said, through her counsel, that she was a relatively senior employee of Autofocus at the time of her contempts.

"She said that she took part in a system whereby she signed off reports which were in fact prepared by someone else and that she did so with the consent of a Director [of Autofocus].

Bonuses

"She said that the bonus arrangement was such that she was paid additional income depending on the number of reports she produced. She said that she had ceased to be employed by Autofocus in September 2009.

"Her prison sentence was suspended for 12 months based on her honesty in admitting the offences.

Autofocus denies being responsible. It says: "Ms Whysall left Autofocus' employment in September 2009, shortly after her evidence was questioned in the matter of Adam Glossop v Salvesen Logistics.

Other employees have left

"Autofocus understands that the issue giving rise to the finding of contempt against Ms Whysall, arising from the Glossop case, was that Ms Whysall had allowed another employee of Autofocus to prepare the rates survey, but that Ms Whysall had then signed the witness statement as if she had conducted the rates survey. That other employee has also left Autofocus.

"Autofocus is not aware of any finding by the Northampton County Court that the reported hire rates in Ms Whysall's statement were incorrect or inconsistent with market rates.

"Autofocus continues to defend vigorously the claim being pursued against it by Accident Exchange and is confident of success.

Carry on regardless

"The events at Northampton do not affect what is happening in other courts around the country. Our rates surveyors have attended court regularly since the allegations were first made in September 2009.

"The courts found in favour of the Insurer in seventeen out of the eighteen Accident Exchange claims that have been subjected to a full trial and an award by the court.

"The total claim value was £258,141 and the court awards for the eighteen claims totalled £72,362 (28.0%) of the amount claimed. Period was reduced by the courts in 9 of the 18 claims.

Missing the point

It is a fascinating saga and will run for sometime to come. But it masks the real issue of insurers offering poor services.

They all know that if they can get to an accident and provide the replacement car to the innocent victim straight-away - a well any physiotherapy or other medical help they might need to reduce their whiplash injuries, they can cut costs and make drivers think better of them.

But they fail, time and again, to even respond to claims let alone respond in a positive and timely manner. And if they do offer a replacement car it is often a Ford Ka, when the credit hirers till offer a proper replacement of a similar standards.

I'd like to say that insurers deserve the extra costs, but unfortunately those rising claims costs are going to be passed on the driving public through higher premiums.