A Tracker investigation has found aweb of confusion around claimsmade by the insurance industrythat “one in seven” personal injurycases “costing £392m annually” arelinked to ‘crash for cash’ scams.The Tracker commissionedfreelance journalist Nick West tolook into the claims made by theInsurance Fraud Bureau (IFB) afterThompsons Solicitors could findno evidence of organised criminalactivity among the thousands ofroad accident cases it handlesevery year.“If ‘crash for cash’ crime reallyaccounted for one in sevenpersonal injury cases, we wouldhave seen some signs of it in ourcase intake,” said Tom Jones, headof policy at Thompsons Solicitors.“We’ve seen media coverage ofseveral high profile cases so weaccept the problem exists, but theinsurers have been both recklessand irresponsible to publish figuresthat appear at best to beunreliable and at worst knowinglyfalse.”

Nick West’s research, whichinvolved eight Freedom ofInformation (FOI) requests topolice forces and severalinterviews, found that:

Five forces had no data relatingto ‘crash for cash’ and twoforces failed to reply

The one force that couldprovide information, Derbyshire,had undertaken only twoinvestigations into fraudulenttraffic accidents three years agoand none since

A ninth force, City of LondonPolice, could not provide anyinformation or explain thefigures

A spokesman for the IFB couldnot explain where the one inseven and £392m figures camefrom.

“Our researcher spent nearly sixmonths on this and continually ranup against a brick wall when tryingto get someone to explain thefigures,” said Tom Jones.“This has only served to confirmour suspicions that the insuranceindustry puts out figures that areexaggerated or false. Theimpression given is that there is a

‘pandemic’ of fraud and that’s whypremiums are so high and itappears that simply isn’t the case.“Thompsons is concerned thatwildly inflated claims made byinsurers are being used toundermine the law and damagethe justice system in Britain.“This investigation emphasises theimportance of the call made bythe House of Commons TransportSelect Committee for theGovernment to ensure that publicpolicy and police action oninsurance-related fraud is based onreliable data that has beenindependently verified.”The £392m ‘crash for cash’ figure isnot the only unexplained claimmade by insurers about the costof fraud.In May 2014, the Association ofBritish Insurers (ABI) said therehad been 59,900 ‘dishonest’ motorinsurance claims in 2013 with avalue of £811m; figures that theGovernment quoted whenannouncing its new measuresrestricting the rights of accidentvictims.

The Transport Select Committeesaid in a report published in Julythat it was not clear how the ABIarrived at these figures or whatcounts as ‘dishonest’.The cross-party committee ofMPs, which described theinsurance industry as “highlydysfunctional”, said: “TheGovernment should act to ensurethat there exists better data aboutfraudulent or exaggeratedpersonal injury claims, so thatthere is a stronger evidence basefor decisions.“Since the Government has citedthe ABI’s figures for dishonestclaims in 2013, it should explainhow the figures have been arrivedat and how ‘dishonest claims’ havebeen defined.”Nick West is a London-basedinvestigative journalist who haswritten for the Observer BusinessSection, the Guardian, the SundayTimes and the Scotsman.

Insurers’ ‘crash for cash’ claims are reckless and irresponsible

See inside for details ofour investigation into the‘crash for cash’ figures.

‘Crash for cashpandemic’

The Winterbottoms’story

Car insurers’ halfyear results

Innocent mistakesare not ‘fraud’

Issue 1 Tracking the insurance industry

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The mystery of the ‘crash forcash pandemic’ – research runsinto a brick wall

Thompsons condemnslatest AVIVA proposals to avoid paying propercompensation

The car insurers’ campaign to avoidpaying proper personal injurycompensation has moved up a gearwith new proposals to deprivethousands of accident victims of anychoice in their medical care or theright to legal representation.

AVIVA has unveiled a plan to provide‘rehabilitation only’ compensationthat they would arrange formotorists they deem to have sufferedonly ‘minor, short term’ injuries.And the insurance giant has alsocalled for motorists with claims likelyto be valued at below £5,000 to bebarred from access to legalrepresentation, increasing the limitfrom £1,000.AVIVA claims the measures wouldreduce premiums but has persistentlyrefused to disclose their tradingprofits from the UK car insurancemarket – despite questions inParliament and the issue beingreferred to regulators.Thompsons estimates that UKmotorists generate profits of £2billion annually for car insurers and iscalling for effective regulation of themarket to protect consumers.“The relentless drive to increaseprofit at the expense of access tojustice and with no regard to fairness- driving everything into the hands ofthe insurers - is as breath-taking as itis blatant,” said Tom Jones, head ofpolicy at Thompsons Solicitors. “Whyshould motorists trust anythingAVIVA say when they refuse todisclose their profits?“These latest proposals would putthe car insurers in the driving seatwith the injured motorist tied up inthe boot. The idea that they haveinjured people’s interests at heartwhen they have a vested interest inpaying out as little as possible islaughable.“They portray themselves as themotorists’ friend but the reality is thatthey want to boost profits and payouts to shareholders and avoid the'inconvenience' of paying propercompensation that has beenindependently verified.”

The media has widely quoted theclaim that “one in seven” personalinjury cases “costing £392m annually”were linked to ‘crash for cash’, butwhen Tracker checked the source ofthe figures - an Insurance Fraud Bureau(IFB) report published in November2012 – there was no explanation ofhow they had been calculated.“Thompsons has vast experience ofhelping people injured in road trafficaccidents, and the IFB’s claim that somany are not only fraudulent butlinked to organised crime seemedimplausible, to say the least,” said TomJones, head of policy at the firm.“But what was even moreextraordinary was the fact that aseemingly reputable report providedno footnotes or references that we -or the public generally - could use toverify the figures.“As the City of London Police had lenttheir name to the report, we naturallyassumed the figures must have beencompiled using data from police forcesaround the country and decided tocommission our own research on theissue using an experienced freelancejournalist.”The journalist, Nick West, submittedFreedom of Information (FOI)requests to eight police forces in May2014, but the responses suggest data isnot being kept in a format that wouldallow it to be collated into meaningfulnational statistics. Of the eight forces contacted, two(South Wales and West Midlands)have so far failed to reply and fourwere totally unable to provide anydata relating to fraudulent road trafficcollisions. Police Scotland said: “There is noclassification in our road crashrecording system to search underthese specific headings. Nor is itachievable to produce any meaningfuldata.” Greater Manchester Police said:“There is no specific Home Officecrime recording code for fraudulenttraffic collisions.”

The Police Service of NorthernIreland said: “It would require allincidents of road traffic collisions to bemanually checked.”And Thames Valley Police said: “Theinformation is not held in an easilyretrievable format.”

The only force able to provide specificinformation, Derbyshire Constabulary,said it had undertaken twoinvestigations into fraudulent trafficaccidents three years ago but nonesince. It also said that neither caseinvolved a connection with organisedcrime.In a meeting with the MetropolitanPolice, the eighth force contacted viathe FOI procedure, our researcherexplained the difficulties he was havingfinding out how extensive the problemof ‘crash for cash’ was and how the£392m figure had been calculated.However, the senior officer he metsaid, “I don’t know where they get theirfigures from” and agreed they madelittle sense unless explained.The Met referred Nick to the City ofLondon Police, the force that leads oncar insurance fraud and works mostclosely with the insurance industry. Buthe was told by the media officer atCity of London’s Insurance FraudEnforcement Department that the‘crash for cash’ statistics came from theIFB and he would need to speak tothem.

“This took our research back full circleto the authors of the report, who hadnot referenced their figures in the firstplace,” explained Nick.“I spoke to the IFB’scommunications controller andeven he wasn’t sure how thestatistics were compiled. However,he did suggest that the £392mfigure includes cases that aresuspected of being fraud and havenot been paid out.”Tom Jones added: “Scare-mongering about fraud andexaggerating its costs have theeffect of criminalising accidentvictims and those who representthem. If people have been injured,they deserve proper compensation,not to be made to feel guilty. “The insurance industry is relentlessin pressing for ever more legalchanges that favour theircommercial interests and limit ordeny access to justice for accidentvictims and it’s always dressed up asbeing essential to deal with fraud or‘compensation culture’.

e mostgenerous dcription the IFB’s gur is‘blued’. ere is anurgent need forclarity. Why is the IFBpublishing gurthat th can’t backup? Where is theindependent analysis?Will the Governmentnow agree to stopquing insuranceindustry claims unlth have beenindependentlyverified rst?

“

“

Thames Valley Police Chief Constable Sara Thornton CBE QPM

Headquarters

Oxford Road

Kidlington

Oxfordshire

OX5 2NX

Mr Nick West 124 Hanover Rd London NW10 3DP

Telephone: 101 Direct dial: 01865 846329

Email: publicaccess@thamesvalley.pnn.police.uk

Our ref: HQ/PA/001484/14 06 June 2014

Dear Mr West, I write in response to the above-referenced Freedom of Information Act (FOIA) request submitted on 20/05/2014. Thames Valley Police has now considered this request, which for clarity, has been repeated below:

Request 1. a. How many criminal investigations have you recorded in relation to organised crime being involved in fraudulent road traffic collisions? b. How many criminal investigations have been reported in relation to organised crime being involved in fraudulent road traffic collisions? 2. a. How many criminal investigations into individuals have you recorded regarding fraudulent road traffic collisions? b. How many criminal investigations into individuals have been reported regarding fraudulent road traffic collisions? 3. a. How many fraudulent claims have the insurance industry reported to you as matters to investigate? b. Of those, how many led to a criminal investigation? c. Of those, how many have resulted in a successful prosecution? 4. Please provide the recorded cost to the insurance industry of fraudulent claims that resulted in criminal prosecutions? Please can you provide this information relating to questions 1 through 4 for the following periods?

to date March 2013

April 2011 March 2013

Response This request is being refused under Section 12(1) of the FOIA.

Section 12 of the FOIA allows that public authorities do not have to comply with section 1(1) of the Act if the cost of complying would exceed the appropriate limit. In accordance with the Freedom of Information Act, this letter represents a Refusal Notice for this request.

This information is not held in an easily retrievable format and would require a manual search of in excess of 1000 fraud records. It is estimated that this would take approximately five minutes per record and would therefore take at least 83 hours to undertake. This will exceed the appropriate time and cost limit of 18 hours.

Section 16:- Further advice & assistance

Thames Valley Police cannot further advise how this information might be retrieved within the constraints. However, we can advise that since December 2012 all fraud has been reported to Action Fraud, therefore, you may wish to contact them.

Thompsons tracker newsletter#Chosen.qxp_Layout 1 29/08/2014 11:16 Page 3

Car insurers’ half yearresults – £650m bonanzafor shareholders, no joyfor motorists

Car insurance giant Admiral hasreported another sharp rise inprofits and plans for a big dividendpay out to shareholders – but nocut in premiums for motorists.

In the half year to the end of June2014, Admiral said its UK carinsurance profits rose 8% to£207.7m and announced that it willpay a further £133m in dividendsin October, taking Admiral’s totalpay-out to shareholders since 2102to £650m. Contrary to Government claims of insurers suffering from‘compensation culture’ and fraud,Admiral’s chief executive HenryEngelhardt admitted Admiral isbooming because of much fewerclaims than expected.He said the claims environmentdating as far back as 2009 has beenpositive and that this would allowthe company to continue torelease cash from reserves.

These results followed shortly afterhalf year results announcementsfrom AVIVA showing overall groupprofits rising by 4% to £1.05 billion,alongside a 4.5% increase in thedividend to shareholders.AVIVA continues to refuse todivulge separate figures for the UKcar insurance market, hiding themunder ‘general insurance’, whichmade a £263m profit in the period.Labour MP Richard Burdenrecently asked in Parliament whyAVIVA is not complying withinternational financial reportingrequirements to disclose profitsaccounting for more than 10% ofthe total. However, AVIVAcontinues to resist pressure fortransparency.

Ombudsman saysinnocent mistakes arenot ‘fraud’

The Financial Ombudsman hasreprimanded insurers for usingmistakes made by policy holdersto get out of paying claims.

They told insurers that allegingfraud is a serious matter and theyshould not ‘think’ a claim isfraudulent and focus on whathasn’t been disclosed to find away of rejecting it.“We take the view that aconsumer should be given an

opportunity to explain anyinconsistencies in their account ofwhat happened,” said thewatchdog’s annual report.“After all, there may well be aninnocent explanation. People canmake mistakes, and insurers arenot always clear in what they’reasking the consumer to tell them.”The Financial Ombudsmanhandled 7,190 complaints aboutcar insurance last year alone and itwas only Personal ProtectionInsurance that received morecomplaints.

The human cost of thecar insurance industry:the Winterbottoms’ story

Donald and Enid Winterbottomwere badly injured on 12 January2012 when a car overtaking fromthe opposite direction hit their carhead-on. Enid was airlifted tohospital with a severe whiplashinjury.

The next day while Enid was still inhospital, and with no discussionwith her, their legal expenseinsurers, Cogents, started a claim. Cogents projected that bothDonald and Enid, aged 81 and 79,would recover from their injurieswithin 7 months and estimateddamages for Enid at £1,800 –£2,000. But Donald and Enidrejected this offer and moved theirclaim to Donald’s old union, Unitethe Union, in November 2012. InJuly 2013, Thompsons Solicitorssettled Enid’s case for £8,000, fourtimes the estimated damages putforth by Cogents.

The lawyer at Thompsons who ranthe case, Hazel Webb, found thatCogents had failed to take properinstructions from theWinterbottoms. They referredthem to the wrong type of medicalexpert who missed the long-termimpact of one of Enid’s injuries –namely, numbness in her handwhich needed an orthopaedicspecialist to whom Thompsonsreferred her.Enid explains, “We didn’t ask forCogents’ involvement and we canonly assume that they got ourdetails from our car insurancecompany. We were in shock afterthe accident yet we were harassedwith phone calls pushing us tomake a claim. The way we werethen dealt with was so impersonalwe felt like we were just a statisticand the staff were consistently rudeand unhelpful. Their letters were inlegal mumbo jumbo and westruggled to make any sense ofthem.

It’s been a verytraumatic period inour liv. Ourconfidence complelycollapsed, and it isonly rently in thepast few months thatwe have started to feellike we are on the way to rovery. We can’t

str the differencethat was made to ourperience as soon asompsons ginvolved.

Scan here to view ashort video clipabout theWinterbottoms’story and how

Thompsons has helped them intheir bid for justice.

““

Thompsons tracker newsletter#Chosen.qxp_Layout 1 29/08/2014 11:16 Page 4

We say:

Car insurers should cut premiums now – or face a windfall tax ontheir profits

This broken market should be reformed to protect consumers andstop profiteering

Accident victims should be free to choose their own lawyer withoutinsurers trying to influence their decision or make money from theirchoice.

Head of policy at Thompsons Solicitors, Tom Jones,explains more about the lucrative car insurance industryand Britain’s so called ‘compensation culture’ in this briefthree-minute video clip.

Justice for motorists

£BILLION

DIVIDEND ROAD

MOTORISTS = LOSERS

DIRECT LINE AND ADMIRAL HAVE PAID OUT £977m IN SHAREHOLDER DIVIDENDS IN THE LAST TWO YEARS – THAT’S £130 FOR EVERY POLICYHOLDER

SHAREHOLDERS = WINNERS

#CutPremiumsNow

£977mDIVIDENDS

www.thompsons.law.co.uk

Close relationsAn investigation by the Guardian revealed the long-standing financialrelationship between the Conservative Party and the insurance industry.Among the most prominent donors uncovered by the investigation wasa £71k donation to Chris Grayling (then Shadow Home Secretary) bythe founder of Direct Line, Peter Wood. Source: Guardian – 16/09/11

Contact usThompsons Solicitors has been standing up for the injured andmistreated since Harry Thompson founded the firm in 1921. Thefirm has fought for millions of people, won countless landmarkcases and secured key legal reforms.

Thompsons has more experience of winning personal injury andemployment claims than any other firm – and uses that experiencesolely for the injured and mistreated.Thompsons refuses to represent insurance companies andemployers, invests specialist expertise in each and every case andfights for the maximum compensation in the shortest possible time.

Visit us at www.thompsons.law.co.ukCall us on 0800 0 224 224

The Thompsons Tracker is all about standing up forconsumers and injured people and sets out toexpose insurance industry double standards andfalse claims.

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