Two alleged passengers brought claims arising out of an alleged road traffic accident said to have occurred in August 2019, against a backdrop of a total of six intimated passenger claims between the two vehicles. The two drivers involved claimed not to have known each other prior to the alleged accident.
It was disputed that the accident was genuine and a positive case of fraud and staged accident was pleaded in the defence.
Investigations had revealed:
- Both vehicles required unusual and non-direct routes from their alleged points of origin to alleged points of destination to arrive at the alleged “accident” locus: It was inherently unlikely that both vehicles would have adopted such unusual and non-direct routes to arrive simultaneously at the alleged “accident” locus unless by design;
- Given the layout of the road junction in question it was inherently unlikely that the two vehicles were not visible to each other for a substantial period of time prior to impact. More likely, if any such contact did take place at this location, the impact was caused deliberately;
- Despite both alleged drivers having stated to the insurer of the alleged offending vehicle (and each having signed a statement of truth) that they were unknown to each other prior to the alleged “accident”, both had placed the same vehicle (namely one Ford Transit van) on cover under their respective motor insurance policies on a number of occasions including an overlapping period between 27th September 2017 to 12th October 2017: It was the insurer’s case that it was inconceivable that the two alleged drivers could have both placed the same vehicle (namely the Ford Transit van) on cover on their respective insurance policies, both separately and simultaneously, without knowing each other at that time.
Both alleged passengers discontinued their claims in light of the positive pleading of fraud in the defence. However, prior to the discontinuance a Part 20 Claim was issued against both alleged drivers in the tort of deceit, based on the false representations they had both made in respect of the alleged accident and which had been relied upon by the insurer, seeking:
- recovery of an earlier PAV payment;
- the additional costs of investigating and uncovering the fraudulent actions;
- exemplary damages on the basis that both alleged drivers were knowing participants in a conspiracy to secure unjustified compensation payments from the insurer and their conduct in staging a contrived accident was calculated by them to make a profit at the insurer’s expense.
No response was received from either alleged driver and judgment was entered in favour of the insurer on the Part 20 Claim.
At the assessment hearing the insurer was awarded:
- Repayment of the PAV previously made;
- The additional costs of investigating the matter;
- Exemplary damages in the sum of £10,000 against each of the alleged drivers;
- Costs of the action on the indemnity basis.
In quantifying the award for exemplary damages, consideration was given to Axa Insurance plc v (1) Financial Claims Solutions (2) Mohammed Auranzaib (3) Hakim Mohammed Abdul  EWCA 1330 and the £20,000 exemplary damages awarded by the Court of Appeal against each of the three Defendants in that case.
It was submitted that the level of conspiracy and deception in Axa was greater than in the current matter because there was no criticism or allegation of deceit against any of the legal representatives who sent CNFs on behalf of the alleged injured parties (as there was in Axa) but the principled basis of exemplary damages remained a punitive award to deter and punish the conduct and behaviour involved, proportionate to that conduct and behaviour.
An award of £10,000 exemplary damages against each alleged driver was sought and the Court agreed that the sum of £10,000 was appropriate against each alleged driver given the circumstances of the case.
Anthony was instructed by Plexus Law Manchester office.