142 linked potentially fraudulent claims

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Various Claimants (4 in number) v Cardiff Council [2016]

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For the last 3 years, Cardiff Council has faced 142 personal injury tripping claims all from the same North West based firm of solicitors. It was believed that most, if not all, of the claims were fraudulent. The defence against these claims culminated recently with the 4 claims that were litigated either being struck out or discontinued. It appears that no further claims will be received from the firm of solicitors in question and no proceedings have been issued in the remaining pre-action claims.

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Suspicions

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Most Local Authorities are familiar with receiving rafts of claims from claimant firms based far afield. This always raises questions as to the source of such claims and the veracity of the same. However, whilst suspicions are raised, issues such as how such claims were initiated and how the claimants came to instruct solicitors from far afield tend to remain fairly peripheral.

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When Cardiff Council received the vast majority of these 142 claims from one firm of solicitors over a period of 13 months, the Council decided to act on its concerns. 

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The defence was assisted by information that we had received from anonymous individuals, namely:

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1. A telephone call from someone who identified that they had worked for a Cardiff based claims management firm who were allegedly paying potential claimants £50 to make a false claim against the Council. The individual identified that this company was allegedly referring claimants to the firm of solicitors and estimated that about 90% of the claims were fraudulent.

2. Contact by 2 other individuals who each knew different claimants represented by the said firm of solicitors and who both identified that each claim was made up.

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Investigations

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Some initial consideration of Facebook identified some links between the claimants and so Cardiff Council instructed Netwatch Global Limited to carry out some more detailed data mapping and social media searches on approximately 50% of the claimants to ascertain the extent of the links. Netwatch were able to identify numerous links between 53 of the claimants through Facebook and illustrated the same by reference to a convoluted spider web. By way of example, one claimant was ‘friends’ on Facebook with 22 other claimants and several others had over 10 such connections.

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Tactics

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On receipt of this information, the Council decided that from that point onwards, no payments would be made pre-action on any of these claims and that any claims that were litigated would be robustly defended to trial.

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A robust pre-action approach by the Council’s Claims Handlers, B4 legal, and then Gallagher Bassett, meant that many of the claims were successfully repudiated.  

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4 of the claims were issued. We were instructed and took the view that these 4 cases were likely to be a ‘toe in the water’, with more to follow in the event that the 4 claims were successful.  

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Aside from the social media links, these were cases that were going to be difficult to defend. Admissions of breach of duty had been made pre-action and there was not much to go on to dispute causation. Several had supportive medical records as to the occurrence of the injury and there were limited inconsistencies as to the circumstances. Further, on 3 of the 4 cases, the claimants did not have any social media activity and so there was no evidence of direct links between these 3 claimants and other claimants. Therefore, the main thrust of the Council’s defence was that the numerous links between the claimants as a whole, together with the tipoffs received, were too many to be mere coincidence; essentially the Council’s case was that these 4 claims were part of a larger alleged fraud ring relating to all of these claimants.

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At the outset of each of the 4 claims, we raised Part 18 Requests for Information, with the particular purpose of identifying any witnesses and any inconsistencies in accident circumstances. The claimants’ solicitors objected to all of the Part 18 Requests and we had to issue Applications and obtain Court Orders requiring the claimants to respond. This was an important tactic as on two of the cases in which we had been unable to identify any direct links between the claimants and other claimants, we were able to obtain witnesses’ names, which were investigated to identify links between the witnesses and other claimants, thereby bringing them into the alleged fraud ring. 

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In addition to making the social media links, the defence team worked to cross reference accident locations, photographs and witnesses, to find a number of other factors that indicated potential fraud, in particular:

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1. Multiple claims by the same claimants;

2. Several cases of the same defect causing a number of accidents, and;

3. In some cases, exactly the same photographs being relied upon by different claimants.

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Evidence

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Evidence was adduced in the form of 3 Witness Statements, from:

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1. The Council’s Operational Risk Management Officer as to the number of claims by all claimants and the crossovers with the same defect, multiple claims and use of the same photographs; 

2. Our Clare Hoskins as to the alleged anonymous tipoffs of fraud received by us;

3. Netwatch as to social media links. In order to keep this Witness Statement proportionate, only a selection of the claimants were used when illustrating the links. This was a careful balancing exercise that required us to ensure that a sufficient number of strong links were evidenced, but that the Witness Statement did not become too voluminous, convoluted and disproportionate.

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The 3 Witness Statements, together with the voluminous enclosures, took up 4 lever arch files on each case.

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Procedure

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Once the evidence was finalised, we amended the Defences to plea the links and to allege fraud. We obtained an Order consolidating all of the cases so that they would be heard together. This was important from a costs perspective and also so that the impact of the totality of the links could be assessed in those 3 cases with the weaker links.

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Outcome

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Shortly after consolidation, the 4 cases started to fail as follows:

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ER v Cardiff Council

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The claimant had no social media activity and so, on the face of it, we had no evidence of any links with other claimants. However, the Part 18 Request identified that the claimant was with his ex-partner at the time, and she was going to give witness evidence on his behalf. We identified that she was also bringing a claim and had a number of social media links with other claimants.

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The claimant discontinued the claim shortly after the 4 claims were consolidated.

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AP v Cardiff Council

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This claimant had social media links with 10 other claimants. Whilst the claimant had attended hospital as a result of a fall, there were some inconsistencies in his alleged circumstances, and he failed to identify the name of the person who had just dropped him off from their vehicle prior to the accident.

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We obtained an Order for Part 18 Replies to be provided. The claimant failed to provide those replies and failed to comply with the Direction in relation to disclosure. We promptly issued an Application to strike out the claim. The claimant’s solicitors issued a counter Application, however, as the Part 18 Replies and the disclosure had still not been dealt with, the claim was struck out. 

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JB v Cardiff Council

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Again, this was a case in which the claimant had no social media activity, and so, on the face of it, there appeared to be no links with any of the other claimants. We were, however, able to identify that 2 members of his family had previously made claims against the Council, albeit through different Solicitors, and between them they had links with 6 of the claimants.

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The claimant’s solicitors refused to disclose the claimant’s hospital records. We obtained an Order requiring the claimant to provide disclosure of his medical records to us. The claimant did not comply with this Order.  

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In addition, we raised questions of the claimant’s medical expert, who refused to provide us with his answers until we had paid his fee. We notified the claimant’s solicitors that under CRP Part 35 6.2, it was for them to pay his fee, but they did not.  

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Further, although we had been served with an unsigned Witness Statement from the claimant, the claimant’s solicitors failed to serve a signed Witness Statement in accordance with the Court Order. We, therefore, issued an Application to strike out the claim for the claimant’s failure to comply with a number of Court Directions. 

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The claimant’s solicitors came off the record the day before the hearing, and the claimant, as a litigant in person, identified that he did not want to proceed with the claim. His claim was, therefore, struck out.

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TS v Cardiff Council

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This was a highway trip with no witnesses. However, the hospital records were consistent and confirmed an attendance the following day with a description of a fall on a highway defect. The claimant had no social media activity herself, and initially there appeared to be no evidence to support any links between her and any of the other claimants. It looked like the Court might accept that this was a genuine claim.  

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However, in response to our Request for Further Information, the claimant identified the name of the friend whose company she had just left immediately prior to the accident occurring. Social media searches identified that whilst the friend was not one of the other claimants, she had links with 5 other claimants. Whilst the evidence against this claimant was not at all strong, forcing the claimant to identify the name of the friend was sufficient to raise some doubt as to whether the claim was genuine.

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Eventually, this was the last claim which discontinued.

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Costs

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These were QOWCS cases. Consequently, the prospects of obtaining enforceable Costs Orders against the claimants would only arise in limited circumstances; where the claim was struck out or where the Court found that there was ‘fundamental dishonesty’. It was, therefore, important to issue Applications to strike out those claims, where circumstances arose to justify such an Application, as promptly as we could.

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In relation to the AP claim that was struck out, we obtained an enforceable Costs Order for the Council’s assessed (not fixed) costs under CPR part 44.15, on the basis that the claimant had lost the protection provided by QOWCS as his failure to comply with the Court Order was preventing the just disposal of the proceedings.

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However, on the cases that discontinued, whilst Costs Orders were obtained, they were not enforceable. In order to obtain enforceable Costs Orders in the discontinued cases, it was going to be necessary to obtain an Order that the claims were ‘fundamentally dishonest’. That would have required the Council to apply to the Court in order to seek such a finding. It was likely that the Court would want to hear the evidence before it could make such a decision and there was a real risk that ‘fundamental dishonesty’ would not be proven.  

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Further, it was anticipated that if such a finding was reached, the ATE Insurers would withdraw cover and that recovery of any costs from the claimants themselves would be an uncertainty.  

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The Council took the view, therefore, that it had attained its goal of disposing of the claims successfully and that there was limited merit in seeking enforceable Costs Orders against the claimants.

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Summary

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Whilst the evidence of fraud on each individual case was not particularly strong, the totality of the links did create a picture that, in the view of the entire defence team, was too surprising to be accepted as coincidence and raised real concerns as to the existence of a fraud ring.  

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These were cases that would probably have been settled had this linked approach not been taken. Settlement of these cases would have likely led to further claims being issued. Consequently, the robust approach taken by the defence team has led to significant financial savings for the Council.

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The Council and its advisers will monitor closely receipt of any future claims from the firm of solicitors in question, in addition to seeking to establish any claims generated by the Cardiff based claims management company, the subject of these entire claims.

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These claims highlight the benefits of data capture, and where patterns and trends arise, putting in place at the earliest opportunity a specialist defence team comprising of Local Authority Officers that understand the topography and local issues associated with such claims, effective claims handlers and their specialist providers, to include lawyers, to ensure that patterns and trends are effectively investigated and analysed so that the evidence is fully understood and tactical decisions and considerations made that best protect the position of the Defendant.