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Courts Crack Down On ‘Cash for Crash’ Fraud

In a powerful indication that the courts are prepared to take firm action to stamp out so called ‘cash for crash’ fraud, motor insurers have been granted permission to seek a jail term for a businessman accused of making a bogus six-figure claim in respect of a road accident that never happened.

The insurers argued that the businessman’s claim for personal injury compensation and reimbursement of more than £130,000 in replacement car hire costs following an alleged two-car collision was ‘based on a lie’. His account of the accident was said to be implausible and he was alleged to have colluded with others in a manner that amounted to a grave contempt of court.

Although he had subsequently abandoned his damages claim, the insurers accused the businessman of involvement in an ‘audacious attempted fraud’. It was submitted that there had been ‘no accident as alleged’ and that the damage to his car had probably occurred when it was stationary.

Granting the insurers permission to pursue a committal application, the Court found that, although the businessman had yet to respond to documents with which he had been served and had not appeared at the hearing, there was ‘strong prima facie evidence’ that he had acted fraudulently.

A spokesman for the insurers had stated in an affidavit: “This case illustrates the confidence of those who seek to abuse the civil justice system to perpetuate their crimes. Civil lists across the country are clogged up with injury claims contaminated by dishonesty. Unless and until some of the fraudsters lose more than a day at court, the status quo is unlikely to change”.