LV= forced to make payout to convicted fraudster

LV= wants a change in claims payouts after stumping up £2,500 to an accountant, even though she was eventually jailed for attempting to swindle £600,000 out of the insurer by faking injuries.

Accountant Minaxi Shah, who faked severe disability from a road crash in an attempt to swindle £600,000 from LV=, was jailed for six months by a top judge. Her husband Anil, 51, and daughter Neha, 23, were also jailed for three months after helping her to claim she was in continual need of care and help from her family.

Despite the convictions, LV= was on the hook for a £10,000 payout to Minaxi Shah, which was eventually reduced to £2,500 once the cost of the investigation was deducted.

LV= regional technical manager Steve Clark said: “Clearly there has to be an arrangement where it is proportionate; her behaviour was not proportionate. If you have a £1m claim not getting paid because of some minor offence, then obviously that’s not proportionate. There has to be a balance.”

LV= used surveillance to catch out the family. But Clark said: “We use surveillance and use it in those cases only where we think it is appropriate.”

In a rare move, the trio were prosecuted on a contempt of court charge. Lord Justice Laws said at the HIgh Court: “Corrupting the stream of public justice is generally more poisonous that the telling of a lie by one man to another … The administration of justice and its protection demand that these three defendants be sent to prison.”

The judge, sitting with Mr Justice Simon, said the trio’s excuses for their behaviour were “largely footling and disingenuous” and their only mitigation was their admission of contempt and their clean records.

Zurich is challenging a case next year, which if successful, could favour insurers in their payouts to convicted fraudsters.