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Exemplary damages awarded for ‘very serious’ exaggerated claim


Leading defendant law firm, Keoghs, represented insurance company, esure, in an extraordinary case which resulted in both the claimant and their accident management company being ordered to pay exemplary damages totalling £67,250.

The matter arose from a genuine motor accident between the parties (Mrs Hassan & Mrs Cooper) on the 15th January 2012 with negligence on the part of the defendant conceded from the outset. Two days later a claim was presented to the at-fault insurer, esure, for personal injury, repair costs, the hire of a replacement plus recovery and storage of the damaged vehicle. Following the submission of an engineer’s report for estimated repairs of £3,598 and an interim payment request, a without prejudice payment was released in September 2012. Court proceedings were subsequently issued in December 2012 with Mrs Hassan pleading total losses of £51,451.12, including over £42,000 hire costs.

However, when a repair invoice was submitted by the claimant for the exact sum estimated, the owner of the garage was contacted as part of Keoghs’ hire and repair validation process. He confirmed that he had not repaired the claimant’s vehicle and the invoice had not been issued by his company. Following Keoghs’ request for an explanation from the claimant, matters took an even more surprising and sinister turn. Representatives from ACC, the accident management company, paid the garage owner a visit whereupon he was presented with a typed statement saying that he did recall repairing the vehicle. After refusing to sign this statement, the garage owner was subjected to further harassment and intimidation over a period of time.

Keoghs took action, applying for ACC to join court proceedings and making a Part 20 claim in the tort of deceit to seek exemplary damages against both the claimant and ACC. At this point the defence for the claimant and ACC accepted that the repair invoice had not been prepared by the alleged repairing garage but by themselves, due to the garage owner being too busy. This startling admission, in light of the seriousness of matters and the claimant’s repeated reliance upon the document, unravelled the credibility of the whole claim. As a result, a summary judgement to recoup the interim payment (successfully recovered) and a judgement in the tort of deceit were both obtained.

The hearing to assess an award for exemplary damages was held at Preston County Court on 2nd March 2015.

The claimant voluntarily took the stand with further revelations ensuing. Despite previously signing statements of truth, Hassan admitted that the vehicle hadn’t been recovered at the accident locus and she had not been provided with an Audi replacement but, in fact, a Mercedes. She also claimed to have given the cheque for repairs to another party whilst being made to sign documents because her husband, who worked for the accident management company or associated business, feared for his job – a claim unsubstantiated with any credible explanation.

The judge, having found justification for an order for exemplary damages against both the claimant and the accident management company, awarded the sum of £7,250 to be paid by the claimant and £60,000 against ACC. The defendant’s costs of the claim and the Part 20 claim were also awarded.

Whilst the judge stated he was quite sure Hassan was not the ‘prime mover’, he was equally sure she would have given supporting evidence if necessary, going on to say:

“…there is an epidemic, or a phenomenon of claims of this kind, and it seems to me that that has to be borne in mind by the court when, in a proper case, it can award exemplary damages.”

HHJ Butler went on to state that ACC had deliberately and unconscionably attempted to defraud the insurers and the policyholder as well as intimidating a witness, continuing:

“…even after ACC had been joined, they saw fit to put in an utterly incredible, and I find dishonest, defence…it is hard to imagine a more serious case.”

The matter was handled by Keoghs’ credit hire technical director Melanie Mooney, who commented:

“This case clearly demonstrates how one phone call can unravel a whole case. It is difficult to understand the claimant’s and the accident management company’s actions in continuing to assert something which was clearly not true. With the assistance of our insurer client, justice has been done and has been seen to be done”

Andrew Nixon, esure Fraud Operations Manager, said:

“In investigating and taking action against fraud, we will always consider the range of sanction actions available to us. Working in close collaboration with Keoghs, in this case, we believed that a tort of deceit was the most appropriate and effective option. This is an excellent result demonstrating how punitive financial penalties hitting the pockets of the dishonest can be used in the fight against claim fraud.”



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