SPECIALIST motor insurer ERS has made its first private fraud prosecution, resulting in not only a custodial sentence but a hefty fine, covering ERS' legal fees.
At a committal hearing at the High Court on October 23, Mr Justice Eady heard how Raymond Fearnon had attempted to defraud ERS by making a third party claim against a minibus policy.
Mr Fearnon said he was a passenger in the minibus at the time of a reported accident when in reality the only people present in the vehicle were the insured and two members of his family.
ERS' Claims team questioned the validity of the claim and, with the help of thorough evidence supplied by the insured, ERS pleaded fraud and the claim was discontinued.
However, the Lloyd's syndicate decided the evidence was compelling enough to take this case further and it therefore served declaration proceedings for contempt of court.
Mr Fearnon pleaded guilty to dishonesty of making the claim and Mr Justice Eady sentenced him to a six month custodial sentence, to be suspended over two years, under the order that he paid £5,000 to ERS to help cover its legal fees.
Claims Director Peter Smith said: "This is a really pleasing result for ERS and it sends an extremely powerful message: not only have we pursued a fraudulent claimant, we have also made them pay for us doing so.
"Fraud remains the scourge of the insurance industry and fraudulent claims that are as blatant as Mr Fearnon's are evidence that many still believe they can take the risk and the worst that will happen is they will have their claim declined.
"The capability and dedication of our Claims team means that is simply no longer the case with ERS. If anyone is considering making a "quick buck" in this manner then hopefully this case will give them second thoughts. If we believe we can successfully prosecute against fraud then we will, every time."
DWF partner James Pinder said: "The judge made it quite clear that insurance fraud is not a victimless crime and approved of ERS' committal proceedings. Further, it is a condition of the suspended sentence that £5,000 is repaid to ERS towards its costs.
"The clear message from the High Court is that anyone committing a fraud against insurers faces not only a custodial sentence, but a financial liability many times higher than any amount they could hope to gain from their fraudulent claim."
ENDS
For more information please contact:
Liz McMahon
ERS
0770 4542318
liz.mcmahon@ers.com
Notes to Editors:
About ERS
ERS has been providing insurance products for more than 60 years and provides insurance to more than 500,000 policyholders through Lloyd's syndicate 218. ERS offers a diverse range of products, including private car, classic car, van, motorcycle, taxi, minibus, fleet, haulage, agricultural vehicle and motor breakdown.
