Zurich sends out clear message to fraudsters following court ruling

Zurich has sent out a clear message to potential fraudsters that they could face the threat of jail time if they try to continue to defraud insurers with false claims.

That is according to the insurer’s claims fraud and investigations manager Scott Clayton, who said that today’s judgement in the Fairclough vs Summers appeal which enables courts to have the power to strike out claims entirely for “abuse of process”, could open the door for other insurers to take action.

The seven-year case between Fairclough Homes Ltd and Shaun Summers cost Zurich £1m and ended in defeat when the Supreme Court judge Lord Clarke dismissed an appeal seeking to strike out Summers’ claim in its entirety on the grounds that it would not be “proportionate or just”.

The case centred on a fraudulent claim of £838,000 made by Summers after he suffered an injury in an accident at work in May 2003.

Summers was eventually awarded £88,716.76 in damages after evidence proved his claim was exaggerated.

Clayton, who was speaking after the ruling, said: “What the Supreme Court has done is to clarify what is required to make those proceedings more straightforward, and ultimately reinforcing the view that those people who are convicted of contempt should go to prison.

“The aim of these proceedings was to deter people from committing fraud and that’s what we hoped the strike out at trial stage would have done. By reinforcing the messages surrounding possible prison sentences we hope that will produce a stronger deterrent.”

Clayton said the best possible test case and despite it being an uphill task to get the legal decision overturned so late in the process, there were a number of positives that could be taken from it and applied in future cases.

Berrymans Lace Mawer partner David Spencer said that Summers was unlikely to see much of the £88,716.76 pay-out due to breaching a conditional fee agreement with his lawyers

One crumb of comfort for Zurich bosses may come with the news that Summers will miss out on pocketing any of his final £88 716 pay-out for the legitimate portion of his initial claim.

“What he would have ended up with will first go to his solicitors to meet the shortfall in their costs and, given the length of time between the cut-off point and the final decision at trial, it’s anticipated that Mr Summers will end up with nothing,” he said.