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Landmark victory for insurers as fraudster is jailed for contempt of court

Acromas Insurance Company Limited, formerly Saga motor insurance – advised by law firm Keoghs – has secured a landmark victory in the fight against fraud as a couple who tried to file a large fraudulent insurance claim have been successfully convicted of contempt of court.

The couple, Graham and Susan Loveday of Port Talbot, South Wales, attempted to claim a large sum in damages for a serious personal injury following a minor traffic accident.

The fraud was revealed after the couple posted images on a social networking website which contradicted the claims of disability by showing Mr Loveday driving from South Wales to Lake Garda in Italy for a holiday.

Mr Loveday, who denied charges of contempt, was jailed for nine months while Mrs Loveday – who admitted partial liability – was given a six-month suspended sentence.

The victory is financially significant for Saga customers, as the seven figure value of the claim, had it been paid out, would have added approximately £1.50 to every insurance policy provided by the firm.

This is the first time a fraudster has been convicted of contempt of court since a ground-breaking ruling last July which opened the way for insurers to bring the proceedings. This has provided a major new weapon in the fight against the endemic problem of insurance fraud.

Roger Ramsden, Chief Executive of Saga Services said: “Insurance fraud is not a victimless crime – it affects all consumers who have to pay for the consequences.

“Saga has a very active and professional team of investigators who defend Saga customers against fraudulent claims.  We employ a range of investigative techniques and Saga is determined to use all means at our disposal to pursue fraudsters.

“However it is also vital that this is backed up by the legal system and this victory represents a major step in the right direction.

“Our investigations team currently have some 3,000 people in their sights – and although not all are claiming £1.8m – we will use every tool at our disposal to pursue each and every claim.”

Neil Southern, partner at law firm Keoghs which represented Saga during the case said: “This is a very positive step for the insurance industry as well as for policyholders across the UK.

“Insurers are facing a rising tide of insurance fraud and this is driving up the cost of premiums for everyone, ultimately having a strong negative impact on the economy.

“The insurance industry has been taking a zero-tolerance approach to dealing with fraudsters – putting a lot of resources into detecting, investigating and defending against suspicious claims.

“This result shows that the Judiciary are now also taking these crimes seriously and this is allowing the industry to send a clear message to would-be fraudsters that there are severe consequences to making bogus claims.”

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