Accident Exchange updates hire costs row

Accident Exchange this morning said the evidence that some Autofocus staff had been dishonest in their cuts to the firm’s hire costs charges had improved its relationships with some insurers and speeded payments.

“The group has enjoyed improving relationships and has negotiated more efficient settlement protocols with a number of insurers and solicitors acting on their behalf,” it said.

“A limited number of larger well known insurers and their solicitors have, however, remained supportive of Autofocus and persevered with their evidence in an attempt to reduce the recoverability of our hire charges.”

Proceedings

The company said: “The group was successful in obtaining permission from HHJ Waine in the Chesterfield County Court to commence committal proceedings against two former employees of Autofocus in respect of their submission of dishonest evidence in the cases of Glossop v Salvesen Logistics and MB Glass v Den Boon.

“The action against one of these former employees has been stayed on the basis that she has given Undertakings to the court which involve her co-operating with Accident Exchange and providing evidential support in respect of the principal action against Autofocus in the High Court.

“The committal hearing in respect of the second former employee, Helen Whyshall, was heard in the Northampton County Court on 15 March 2010 before HHJ Waine.

“It is a matter of public record that Helen Whyshall admitted that she was in contempt of court by verifying a witness statement for use in proceedings with a statement of truth when it was false to her knowledge or when she did not believe it to be true.

Three further cases

“Miss Whyshall informed the court that she was also guilty of three further similar contempts of court.

“HHJ Waine imposed an order committing her to prison for 28 days and ordered her to pay costs. In mitigation Helen Whyshall said, through her counsel, that she was a relatively senior employee of Autofocus at the time of her contempts.

“She said that she took part in a system whereby she signed off reports which were in fact prepared by someone else and that she did so with the consent of a Director [of Autofocus].

Bonuses

“She said that the bonus arrangement was such that she was paid additional income depending on the number of reports she produced. She said that she had ceased to be employed by Autofocus in September 2009.

“Her prison sentence was suspended for 12 months based on her honesty in admitting the offences.

Out of time case

“The Group has also received permission from the Court of Appeal this week giving leave to appeal "out of time", based on evidence discovered after the trial was heard, in the case of Archer v Skanska Corporation.

“This was the case in August 2009 where our initial suspicions around the evidence given by an employee of Autofocus were triggered and where we did not recover our hire charges at the levels expected because of the submissions in Court by Autofocus.

“The appeal has been flagged by the Court of Appeal as a case which they would like expedited.

High Court proceedings

“With regard to the principal action for damages against Autofocus, Accident Exchange Limited issued proceedings against Autofocus in the High Court in October 2009 alleging deceit, conspiracy to cause harm by unlawful means and conspiracy to cause harm to our business.

“Autofocus made an application to the High Court to have the claim against them struck out because, they argued, they were protected by the principle of witness immunity.

“Mr Justice Mackie gave Judgment against them in respect of that application on 2 January 2010. In giving his Judgment, Mr Justice Mackie said: ‘If the facts alleged by the Claimant [Accident Exchange Limited] are true, as I must assume for the purpose of this application, it has sustained financial loss as a result of disgraceful and dishonest conduct by the employees or agents of the Defendant [Autofocus].’

“In light of the conclusion of the matter against Miss Whyshall and based on an increasing volume of direct evidence obtained elsewhere, it is now becoming increasingly evident that the matters complained of in the action against Autofocus are true.

“The case against Autofocus is listed to be next heard before the High Court on 31 March 2010.

Forensic envidence

“The Group has commenced a forensic exercise to collate the total number of instances where Autofocus rate data procured by insurers or their solicitors was used to reduce the level of recovery made by the Group and where it is clear, in the Board's view, that the judgement can now be shown to be unsafe.

“There are in excess of 6,500 cases where currently we believe Autofocus evidence has been deployed and, of those cases, approximately 2,650 where the case has been concluded.

“In light of the judicial finding of fact in Whyshall, and supported by the decision of the Court of Appeal to allow us to serve fresh evidence in cases that have been concluded on the basis of unsound Autofocus evidence, instructions will be issued to our panel solicitors to launch individual appeals on a number of cases commencing with those involving Miss Whyshall.

Four big insurers

“Early indications are that four large and well known insurers and two firms of defendant solicitors account for the most material number of instances where we have under recovered our hire charges as a result of what we believe to be the systematic production of fraudulently submitted hire rate data.

“Discussions with those insurers about whether they wish to incur the incremental cost of re-opening those cases will be initiated shortly.

Cuts continue

Accident Exchange said it had continued to pare down its business cutting 275 jobs and 1,418 vehicles. It said it expected to lose another 700 vehicles in three months.