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IFB joins battle in the fight against EL and PL injury fraud

Today’s announcement by the Insurance Fraud Bureau that it is to look to extend its remit beyond “cash for crash” motor fraud, will come as little surprise to industry watchers. The good work that the IFB have done in tackling motor fraud has meant that the Bureau can afford to shift its focus away from that problem, to other types of fraud that occur in other categories of risk. Partly as a result of the Bureau’s hard work and also the government’s reforms in the area, organised criminals have started to move away from motor fraud and into other areas of organised liability fraud, including “slip and trip” claims and industrial deafness claims.

Since its formation in 2006, the IFB’s work has led to 1,000 arrests and 260 years prison time for motor insurance fraudsters and the experience that the IFB has gained in the area of motor fraud will serve it well as it looks to execute its new five year strategy. A move into tackling fraud in other classes of claim seems an obvious progression.

It was an inevitable outcome of the focus on tackling motor fraud that fraudsters would look to move into other areas and the ABI figures for 2014 suggest that undetected general insurance fraud is estimated at £2.1bn. In our view, it will take some time before the true scale of liability fraud emerges (as it did with cash for crash claims) but our experience of being involved in the largest cross industry PL fraud operation, leads us to conclude that the IFB are right to look at combatting fraud away from motor claims and their announcement is most welcome.

It will of course take time and planning before the IFB becomes as adept at tackling liability claims fraud as it is with motor fraud. The Bureau recognises that it is starting at a different point in its efforts to tackle other areas of fraud. When the Bureau first looked to tackle motor fraud there was already a wealth of data available, but the industry data that is available in other areas is neither “as rich” or consolidated and work will be needed to address both of those issues. Data will be the key to success, the Bureau recognises.

The IFB’s move to tackle fraud in other areas is also likely to be supplemented by government initiatives. As it looks to drive through its reforms in whiplash claims, it would not be surprising if the government sought to implement some of its proposals into other classes of claim. Some have already identified that the introduction of a preliminary claims check, as proposed for motor claims, could leave other classes of claim more vulnerable to fraud and the MoJ may extend that process into the EL and PL Claims Portal. Once Medco has been established, perhaps accredited medical experts might also have a part to play in tackling fraud away from the motor arena. Clause 49 of the Criminal Justice and Courts Bill, the fundamental dishonesty clause, is also likely to assist in tackling liability fraud, once it becomes law.

Of course the IFB will continue to support the industry in the fight against motor fraud, but it is likely that it will aim to do so through a more streamlined process and by offering more trend analysis and threat assessments.

Read the IFB’s “Evolving the Insurance Industry’s Fight Against Fraud” here(pdf) 

By Marcus Davies

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.