Insurance firms under fire after ‘industrial-scale’ perjury

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Insurance firms under fire after ‘industrial-scale’ perjury

12th March 2012

An expert in Road Traffic Accident work has said allegations that witnesses working on behalf of insurance companies may have lied under oath are deeply disturbing.

Bhooshan Saidha, a solicitor at Fentons Solicitors LLP, was speaking after a High Court judge granted the go-ahead for a full scale criminal investigation into allegations of fraud and perjury committed by expert witnesses whose job it was to research credit car hire charges on behalf of insurance firms.

“The offences are alleged to have taken place over at least three years between 2007 and 2010 and means that an astonishing 20,000 cases may have to be re-heard,” said Bhooshan. “The fact that this kind of industrial-scale fraud and perjury could have affected so many cases is shocking.”

The accused expert witnesses are seven former employees of the now liquidated vehicle surveyor, Autofocus, who are alleged to have inflated car hire charges in order to back claims by insurance companies that they were being overcharged.

The case, which concerns the cost of high-end replacement cars, was brought by the West Midlands based credit car hire firm, Accident Exchange Ltd (AEL) which supplied vehicles made by firms such as Aston Martin, Ferrari and Mercedes. 

After the discovery of falsified evidence which had been used in a previous case, AEL sought court approval to access data held on Autofocus company computers to investigate whether the firm had lied to them before.

AEL, who mounted a High Court bid to have the seven former Autofocus employees jailed for alleged contempt of court, states it has ‘overwhelming evidence’ that hundreds of calls the seven claimed to have made investigating local car hire rates, simply never happened.

“Insurance companies had repeatedly accused AEL of submitting claims with over-inflated car hire charges,” said Bhooshan. “The supposed evidence behind these accusations came in reports compiled by Autofocus which quoted much lower costs. The fact that Autofocus allegedly falsified this evidence and did not actually conduct any research to establish supposedly correct hire costs is scandalous.”

After Autofocus company data was examined it was discovered that figures had been falsified in up to 20,000 cases involving 40 different credit hire firms, with approximately 5,000 cases involving AEL.

Following these repeated challenges by insurance companies that their claims were over-inflated and unreasonable, AEL were forced to lay off hundreds of staff and suffered losses of over a million pounds.

“This isn’t the first time credit car hire companies have complained about dubious practices employed by the insurance industry, and if these allegations are proved, they will undermine the industry’s credibility,” said Bhooshan.

“It is important that the insurance industry co-operate fully with the on-going investigation and understand that criminal behaviour on this scale not only incurs huge costs, but also leads to the loss of people’s jobs,” he added. “Regardless of the outcome of the Autofocus investigation, there will be increased vigilance amongst claimants regarding potential malpractices in this area and rates evidence served by insurers in future will be subject to even closer scrutiny than before.

“This case could have serious implications for the industry as a whole yet I find it interesting how the story has been largely ignored by the national press. Had a similar fraud involving significant sums of money been committed by a claimant the news would undoubtedly have received a lot more coverage.”

Read more: BBC