There is no practical way of prosecuting somebody for insurance fraud in this country, say experts as they urge the creation of a dedicated Garda unit There is an oddly polite language used in court around the issue of personal injury fraud.

Accidents are “contrived”, essential details are “omitted”, evidence is “misleading”.

Outside the courtroom, those same actions tend to be described in rather more robust terms, such as theft, lies, conspiracy, perjury, and — in the case of the victim set up for a claim — threats and intimidation.

How else could you describe a scenario where an innocent party is deliberately targeted in an intimidating manner in order to steal money from them via their insurers for a fake accident conjured up by lying witnesses for an outcome that could threaten that party’s entire livelihood?

Polite language suggests it is an inconvenience and an annoyance. Plain language proclaims it a crime. So which is it?

The law, the Civil Liability and Courts Act 2004, under sections 14 and 25, makes it a criminal offence to invent accidents, feign injuries, or exaggerate elements of either.

Section 25 applies to anyone giving false or misleading evidence in a personal injuries action with the intention of misleading the court, while section 14 requires the plaintiff specifically to swear an affidavit as to the truth of all assertions, allegations, and information provided to the defendant and to provide that affidavit within 21 days of lodging a claim.

Fines of up to €100,000 and/or imprisonment of up to ten years can be imposed on those convicted of breaches of either section.

Yet when the Government-appointed Cost of Insurance Working Group examined the use of the legislation for its second report published early this year, it found “no instance of a prosecution or conviction pursuant to section 14”. None, in the 14 years the Act has been in existence.

In relation to section 25, it found “the number of recorded prosecutions and convictions for this offence is very low”.

“There was one involving a man who claimed he was crippled with a back injury — but then videos appeared of him cage-fighting,” says Peter Boland, spokesman for the Alliance for Insurance Reform.

The reason he remembers it so vividly is because of its rarity. It was in 2013 and, at the time, it was declared to be the first instance the 2004 Act had been invoked.

Even then, the mixed martial arts fighter, who’d already received an award for the ‘injury’ he had suffered when rear-ended and had put the defendant through four years of legal proceedings, received only a suspended sentence.

Judge Mary Ellen Ring handed it down with a warning that anyone who made false claims for financial reward would face criminal prosecution. An example had to be set, she said.

Judge Mary Ellen Ring

Did it have the desired effect? It did not, says Boland.

The reasons are mixed. Personal-injury cases are heard in the civil courts with no automatic link to the criminal courts. Unless a garda was called to the scene of an alleged accident and made their notes available to the court, there will likely be no involvement of the force at all.

Cases can be referred to the gardaí for investigation but Boland says that can be a fruitless exercise.

“An Garda Síochána is not resourced, whether from a human or a financial point of view, to deal with insurance fraud,” he says.

“We have umpteen examples of members who have taken files to the gardaí, including CCTV and documentary evidence, and the gardaí have not been able to pursue the case because of the resources issue.”

“So while the law is there, there is no practical way of prosecuting somebody for insurance fraud in this country.” Traditionally, insurers focused on getting rid of a claim in the most cost-effective way possible; sometimes that meant settling quickly, even where the claim appeared somewhat dodgy.

Other times they were just delighted to have a claim dismissed and be spared a major payout. Going the next step and seeing the claimant prosecuted would be even more satisfying but it was not the priority.

However, ‘compo culture’ is firmly embedded in the nation’s psyche and frustration at the knock-on effects on insurance costs is rising. The Motor Insurers Bureau of Ireland, which deals with claims involving uninsured or unidentified vehicles, deals with around 350 bogus claims a year.

Insurance Ireland, the industry body for insurance companies, estimates those cases, plus the fraudulent claims against insured drivers, adds about €50 to the cost of every driver’s motor insurance policy each year.

The full extent of fraud across all personal injury cases is hard to pin down. Insurance Confidential, the initiative set up by Insurance Ireland to encourage members of the public to report fake and exaggerated claims, says it investigates around 650 suspected fraudulent claims a year.

The Coalition Against Insurance Fraud, a national organisation of insurers, businesses, and consumer groups in the US, says fraud accounts for 10% of all personal injury and property-related insurance losses there (excluding motor cases) and that same figure has also been mentioned as an estimate here.

So it’s clear that the vast majority of cases are legitimate. They may result in awards that critics argue are often too high compared to the rest of Europe but that’s another issue.

The courts last year received 22,417 new personal injuries cases. That’s 86 new cases every working day of the year. If just one in eight or one in 10 were fraudulent, that would amount to 2,241 to 2,802 cases a year, so it’s a significant number.

And there is something about the brazen manner in which insurance fraudsters go about their business that makes the average policyholder fume.

The cage fighter mentioned earlier just happened to be disqualified from driving at the time he was involved in the crash because of a previous incident which resulted in a dangerous driving conviction. Yet he deemed it perfectly acceptable to try to claim off someone else for an injury which, if it existed at all, was minor compared to how he presented it in court.

He’s not alone in having brass-neck syndrome. Its symptoms are on display every day in the courts. The performance by one couple in Dublin’s Circuit Court last month would have been funny if it had not been so outrageous.

The woman claimed she suffered back, shoulder, and arm pain after the taxi she was travelling in as a passenger was involved in a collision with another car. The x-rays she said she underwent never existed and it emerged that this ‘accident’ was at least the fourth she’d claimed for in five years.

She didn’t remember the others, she said, so counsel for the defendant filled in the details. One involved a collision with a woman who happened to be a friend and a man who was a relative.

Her co-plaintiff was a woman who had lost a claim against a supermarket for slipping on broken eggs — eggs that CCTV footage showed were deliberately dropped by another person seconds earlier.

Two other motoring accident claims were put to her but she insisted she couldn’t recall them. Counsel said there were other types of claims as well but the judge had had enough and dismissed the case.

Her husband, who managed to drive a 171 Mercedes despite being unemployed, then thought the better of proceeding with his claim arising out of the same ‘accident’, instructing his legal team to withdraw it.

Bizarrely, counsel for the defence said there was garda evidence that the woman wasn’t even in the taxi during the collision at the centre of this claim.

If ever there was a case that cried out for a criminal investigation, this would seem to be it.

So why is it not the default position that cases of this type would be referred to the gardaí?

The Alliance for Insurance Reform wants it specifically stated in law that cases dismissed in this way be automatically sent on for Garda investigation.

However, it’s not simply a matter of sending a bunch of files to the nearest Garda station — the widespread view is that the force is not sufficiently resourced to take on such cases.

The Cost of Insurance Working Group recommended in January 2017 that consideration be given to setting up a dedicated Garda unit to tackle insurance fraud through co-operation with the insurance industry which would also help fund the initiative.

Garda management considered the idea for the best part of last year and came up with a proposed structure and a costing. Insurance Ireland considered those proposals for a further eight months before last month deciding it wanted to support the initiative — to the tune of around €1m a year.

It informed Michael D’Arcy, the junior finance minister who has responsibility for insurance, of its decision in early July, but it is Justice Minister Charlie Flanagan who will have the final say.

His decision will be informed by the Garda commissioner who has yet to make a final recommendation on Insurance Ireland’s offer — and there is a new commissioner taking over the post in September — but the indications are that management in the force are eager to give it a go.

Why wouldn’t they be? A similar unit was set up in the UK in 2012 with the same kind of tie-in with industry. The general view is that it is working out well.

Flanagan, however, was cautious in his reply to a Dáil question a few weeks ago.

“There are a number of serious issues which will require further consideration before any decision whether or not to proceed in this manner is taken,” he said.

“It’s a policy decision now,” says John Byrne, spokesman for Insurance Ireland.

“The operational element of it has been worked out by the gardaí, the funding element has been sorted by industry, so it’s up to the Government now.”

The Alliance for Insurance Reform says “now” can’t come soon enough.

“We all run our own businesses and charities and festivals and it’s very time-consuming so we could do without campaigning but there has been intense frustration and there’s a need for real change,” says Boland.

“This is a critical piece of reform and the reason we are pushing so hard on this is because it could have an influence immediately.

“Insurance premiums are at crisis right now so we need something that will work straight away — not in five or ten years time.”

The fact that the minister has not immediately sanctioned this ready-made initiative is largely down to discomfort over the principle of private business funding aspects of policing. Sinn Féin is strongly opposed to the idea, describing it as a “dangerous precedent”.

TD Pearse Doherty said of the plan: “It is not appropriate for private business to fund bespoke sections of an Garda Síochána. The independence of An Garda Síochána is sacrosanct and a direct funding relationship with private interests undermines that independence.”

The party’s concerns are only heightened by the fact that the insurance industry is currently under investigation by the competition authorities here and at EU level over alleged anti-competitive practices. Such practices can be a criminal matter.

That point, and the wider principle, was also raised by the Irish Council for Civil Liberties (ICCL), which argues it amounts to allowing commercial bodies to direct or influence policing priorities “and potentially to have their interests trump the public interest”.

“In the first instance initiatives of this type can shape what crimes are considered important in society and, equally, which crimes are not, by reference to the perspectives or values of corporate interests,” says the ICCL.

“For example, this can lead to a disproportionate focus on areas such as welfare or insurance fraud over issues such as crimes linked to corruption, tax evasion, or corporate crime. The public need to be confident that an independent police service sets its priorities purely in the public interest.

“It is also problematic because those same corporate interests are subject to the law themselves. For example, we know that the Irish insurance industry and sections of that industry have been the subject of investigations by the Competition and Consumer Protection Commission (CCPC) and the European Competition Directorate with regard to the possible commission of offences under competition law.

“There are obvious potential conflicts of interest in a private body which should be subject to the law having a funding relationship with the police who may have to enforce the law against them.”

Insurance Ireland has acknowledged the concerns, stating in its letter to Michael D’Arcy, the minister: “It would not be appropriate or desirable for insurers to have any role in the operational decisions made by any Garda Insurance Fraud Investigation Group. These are policing matters and should rest with An Garda Síochána.”

Boland backs that view: “We would share those concerns if we thought there would be any undue influence from the insurance industry but spending the money would be at the discretion of the gardaí.

“It’s up to the minister to work on a way to channel the funding that everyone can accept. It’s surely not beyond him to do that.”

Safeguarding the independence of the unit is not the only loose end that needs typing up, however.

Insurance Ireland represents the majority of insurers in the country but it wants all operators in the market here to contribute to the funding, not just its members, and that has yet to be agreed in principle, never mind in application.

“It has to be worked out,” says Byrne.

“There have not been discussions about it yet. But we would say that all insurers who would benefit from it [the Garda unit] should contribute to it.

“It would be comparable to a ‘general good requirement’. If you participate in the motor insurance market here, you are obliged to fund the Motor Insurers Bureau of Ireland. The same idea would apply to this.”

Then there’s the question of whether the cost of the contribution, levy or however else it might be termed, will be passed on to the customer in the form of an addition to premiums.

“We haven’t done any assessment on that yet and as a trade body, we would not be able to say how members would allocate their costs,” he says.

How long the industry would be willing to fund a Garda unit, or whether funding would be subject to review after a set number of years has also to be decided, he adds.

Despite the need to finalise details, he says the industry believes the initiative could, and should, be operational by the end of the year.

“We commissioned an opinion poll in 2016 and just 17% of respondents said there were enough legal deterrents for insurance fraud,” says Byrne.

“There is a heightened focus on insurance fraud at the moment and people now recognise that the cost is ultimately be born by themselves, the customers, so there’s a strong public interest in tackling it,” says Boland in agreement.

“We had a public meeting in Cork in February and one of the people at it stood up and said: ‘If I had to choose between robbing a bank and staging a claim, I would stage the claim every time because there are no consequences.’

“In most cases, the case is dismissed, the judge makes a few critical comments, and that’s it. If you submit five or six claims a year and three or four of them are thrown out, that’s still handy money you’re making. That has to end and the sooner the better.”

‘Coincidences happen but some push the explanation of coincidence off the cliff’

The past year has seen a number of audacious personal injury actions thrown out of Irish courts with some strong words from judges — but no follow-up criminal investigation.

One case revolved around 17 claimants and four rear-endings all admitted by the one driver, who was the girlfriend of one of the claimants and a personal friend of many of the others, a group of whom had holidayed together and some of whom had earlier claims from different accidents.

One would want to be blind not to see that there was a hand orchestrating a number of accidents in which four people had claimed a joint purse of €240,000 damages against an insurance company, the judge said.

“These accidents were planned…and all four plaintiffs were willing participants in them and party to a fraud,” said Circuit Court president Mr Justice Raymond Groarke when throwing out all the claims.

In one of four €60,000 damages claims, Peter Slattery, of Charlemont, Griffith Avenue, Dublin 9, had sued his girlfriend, Belinda McLoughlin, and Zurich for damages for neck and back injuries arising from a rear-ending crash.

Peter Slattery

Ms McLoughlin, of Holywell Crescent North, Swords, Co Dublin, was a joint defendant with Zurich in all of the four claims involving separate accidents. She had admitted liability in all but took no part in any of the cases.

Belinda McLoughlin

Samantha ‘Sammy’ Byrne, aged 28, of Suncroft Drive, Tallaght (neck injuries), and her sister Jessica Byrne, aged 25, of Bawnlea Avenue, Jobstown, Tallaght, (back injuries) also sued Ms McLoughlin and Zurich for €60,000 each for damages arising out of a rear-ending of their car by Ms McLoughlin at Fortunestown Rd on February 12, 2015.

Samantha ‘Sammy’ Byrne

“Coincidences happen in life but the evidence in this case, which discloses coincidences of a most astonishing nature, really push the explanation of coincidence off the cliff,” the judge said.

Another case was thrown out after it emerged that the claimant’s uncle carried out the inspection on a car that crashed into him.

The claimant, Leonard Naughton Madden, said he was a passenger in the car when it was crashed into and did not know the drivers of either car before that day. However, the court was told that the man driving him had arranged for the other driver to buy the car that crashed into them and that car was subsequently taken to his uncle for damage assessment. The judge ruled the crash was contrived and the claim fraudulent.

A Chippendale-style male stripper had a claim for €60,000 thrown out after the judge ruled he had given entirely misleading evidence to the court.

The court heard that Nauris Zeps, of Phibblestown House, Clonsilla, Dublin 15, had danced his way through more than three years of back pain arising out of what he claimed was a rear-ending collision.

Nauris Zeps

Mr Zeps gave evidence that he had been unable to find work for the three and a half years and had been unable to lift his baby or do anything strenuous around the house.

In the meantime, he had continued his strip-dancing career as revealed in photographs and a video presented to the court.

Judge Mary O’Malley Costello said the 29-year-old student had misled the court in that he had claimed his injuries were a lot worse that it would appear they were. She struck out his claim and awarded costs against him.

One case that the judge specifically asked to be referred to the gardaí involved a woman who slammed on her brakes at a roundabout in Dublin for no reason so that the driver behind ran into her.

Two days later the woman, who had an address in England, was involved in another accident in Monaghan which gardaí attended, even though she insisted it was not her as she was in England at the time.

It also emerged she had claimed against Tesco in Ireland for a slip in one of their stores here when she had actually slipped the day before in a Tesco store in England.

She tried to argue that she had slipped in both stores on consecutive days, but her credibility was fast wearing thin and the case was dismissed.

In another example, three claims of €60,000 each were lodged by three ‘passengers’ against a woman involved in a collision with a car that only contained the driver.

Shortly after the accident, the driver sent the woman a text message thanking her for asking how his children were. She hadn’t sent any text and hadn’t inquired about any children as the driver had no passengers.

She reported the matter to the gardaí immediately because she suspected she was being set up but she still ended up in court facing claims from the driver’s partner and two children.

The judge was swayed by the woman’s decision to go to the gardaí, when she had already admitted responsibility for the collision and could have been subjecting herself to a careless driving prosecution by reporting it. All three claims were dismissed.

In another case, a 39-year-old jobless man withdrew a €60,000 damages claim arising from a road traffic accident after a judge told him to stop “ducking and diving” when questioned about previous accidents.

Paul Gorman, of Owensilla, Ballymun, Dublin, told the Circuit Civil Court that “accident is my middle name”, adding that, despite having suffered breakages to every bone in his body, he had not always made claims or taken claims to court.

Paul Gorman

Judge Terence O’Sullivan struck out the case, stating: “Your client has stated in the witness box that his middle name was accident and that has been borne out in the evidence. It is important for a plaintiff in any case to make full disclosure of accidents they were involved in.”

In another example, the court heard a man took part in a 67km triathlon five weeks after allegedly suffering “incapacitating injuries” in a bicycle incident involving a hit and run driver.

Graham Dunne

A €60,000 damages claim by Graham Dunne, aged 41, of Castlecurragh Park, Blanchardstown, Co Dublin, was thrown out on the basis he had given misleading information regarding his previous medical history.