Taxi driver pays £12,500 in damages after staged three vehicle crash

A fraudulent taxi driver has had his licence revoked by the Sheffield Taxi Licensing Authority (TLA) after he and seven other claimants admitted that a claim they brought for £100,000 was dishonest.

On 27 January 2020, three vehicles – a BMW, which was insured by Esure, a Volkswagen Golf and a taxi - allegedly collided in Sheffield.

Following the purported incident, seven claims were made by the occupants of the three vehicles, with Esure’s customer ultimately accepting fault for the accident. 

However, a full investigation by Esure and law firm Horwich Farrelly revealed that the accident did not take place.

The taxi driver involved has now paid Esure £12,500 in damages and costs as a result of the fraudulent claim.

In addition, Esure has submitted a judgment against its previous insured who accepted liability of the accident.

Including legal costs, the savings associated with preventing this fraudulent claim is £175,000, according to Horwich Farrelly.

Andrew Nixon, head of fraud at Esure, said: “We have sent a clear message to all drivers who may consider bringing dishonest claims.

“We are aware that the referral fees being offered to taxi drivers are very attractive, but this case should act as a stark reminder that we will not only recover our legal costs, but take their livelihood [away] to protect our honest customers”.

Tort of deceit and conspiracy

Initially, Esure had concerns that the collision was “staged” - therefore, as part of its investigation, the motor insurer contacted Sheffield TLA to verify whether the taxi driver in question had reported the collision.

Contacting Horwich Farrelly at the same time, the law firm advised Esure about bringing a tort of deceit and tort of conspiracy claim against the drivers of the BMW, taxi and Volkswagen Golf.

A tort is a civil wrong committed by a tortfeasor - a person or entity who is found to be responsible under civil law for an injury caused to another person or entity.

Investigations supporting the tort claim found that the BMW involved in the alleged accident had previously sustained significant fire damage to its engine, which rendered it undriveable. This meant it could not have been in use during the supposed accident.

Graeme, Mulvoy, partner at Horwich Farrelly, said: “This is the first case of its kind where we have collaborated to bring a fraudulent taxi driver to justice, both in civil proceedings and then with the licensing authorities.

”Aside from this outcome, it also demonstrates the savings insurers can achieve by working with licensing authorities on claims by taxi drivers.”

Horwich Farelly has developed strong relationships with over 45 taxi licensing authorities over the last three years, it stated.

Speak no English

Shortly before Horwich Farrelly could formally launch Esure’s claim, however, the driver of the Volkswagen Golf opted to issue proceedings - a counterclaim was subsequently brought against all the drivers for exemplary damages. 

Horwich Farrelly noted that several factors strengthened Esure’s claim.

For example, the taxi driver alleged that he was unable to speak, read or write in English and needed all documents to be translated.

However, the law firm obtained a transcript of an interview between the taxi driver and Sheffield TLA in which he spoke fluent English. The taxi driver had also signed several documents, such as tax returns and a hire agreement, in English.

A representative of Sheffield TLA said: “Our primary aim is to protect the public and ensure we have honest taxi drivers on our roads.

”With the hard work and diligences of our officers, we have uncovered a large fraudulent offence and, for the first time, collaborated with the insurance industry to bring the culprits to justice.”

The taxi driver ultimately provided a witness statement, accepting that his claim was dishonest, that false information had been provided to Sheffield TLA and that the collision did not occur.