Allianz Insurance v Fitzhugh Stephenson
Fitzhugh Stephenson originally submitted a claim for vehicle damage and hire, which was paid by Allianz after an insured builder’s forklift truck had reversed into his vehicle. 19 months post-incident Stephenson submitted a further claim for personal injury, triggering an investigation by Keoghs and Allianz.
These inquiries uncovered a raft of evidence to suggest the personal injury claim was fraudulent. A call recording of Stephenson reporting the original incident to his insurance broker included an admission that he wasn’t in his vehicle at the time of impact. A letter from his original claim also backed up the assertion that his vehicle was unattended when the original collision occurred.
Further damning proof was provided by two witnesses who attested that Stephenson was actually in the yard shop at the time of the incident, whilst GP records confirmed he hadn’t sought treatment, despite stating that he had visited his GP on several occasions.
Given this wealth of evidence, Allianz’s defence was amended to fraud, following which Stephenson unsurprisingly discontinued his claim.
However, despite the option to accept the discontinuation, Allianz and Keoghs decided to take a stand given the brazen nature of the fraud, and commenced a private prosecution.
A summons was issued at the Magistrates Court and the case transferred to the Crown Court due to the serious nature of the matter. At Crown Court the claimant pleaded guilty, admitting in the pre- sentence report that he had been the subject of a cold call by a claims company and had been encouraged to make an injury claim. Submissions were also made on behalf of Allianz detailing the impact of fraud on the insurance industry as a whole and the knock-on effect to the cost of premiums.
In sentencing, the court considered the fact that the fraud persisted for a considerable period of time (over 2 years) and that Stephenson had signed various court documents containing statements of truth which proved to be false.
Even taking into account his previous good character, the court deemed the fraud serious enough to warrant an immediate 12 month custodial sentence with no suspension. Allianz also recovered all costs of the private prosecution to be paid from central funds.
When sentencing, HHJ Robinson stated;
“There is no dispute it crosses the custody threshold. The issue is whether I should suspend … I do not accept that the factors indicating that suspending a custodial sentence should apply. In my judgment the appropriate punishment can only be achieved by immediate custody."
Following the result, Keoghs case lead and Associate Solicitor, Nigel Parker, said;
"This is a rare and important prosecution which fires a stark warning to those tempted to submit fraudulent claims for injury, especially when it is as a result of a cold call from a claims company. The insurance industry invests a huge amount in investigating fraudulent claims, and this case sends a message that insurers won’t tolerate fraud of any kind, and are willing to take the appropriate steps to fight it."
James Burge, fraud manager, Allianz Insurance, commented;
“The fact that Allianz took this landmark decision to pursue a private prosecution, which is the first of many to come, just highlights the investment we are continuing to put into fraud detection. We are very pleased with the outcome of this case and believe that it demonstrates that committing insurance fraud can have extremely serious consequences. I hope that those considering fraudulent claims and the claims management companies involved in encouraging such behaviours take heed of this ruling.”