The award by Mr Justice Holman was notable as it included £92,000 in exemplary damages as well as £300,000 to cover the insurers’ losses as a result of the fraud together with the cost of the investigation and legal action. Exemplary damages are rare; they are awarded in excess of the claimant’s loss and are used to punish or make an example of someone whose conduct the court feels is particularly dishonest or malicious.
The consortium of insurers included Aviva, Direct Line, Churchill, Tesco Insurance, Liverpool Victoria, National Insurance Guarantee Corporation and Southern Rock.
The fraud ring staged 30 accidents around the Greater Manchester area in 2005 and 2006. In each case, the fraudster would stop suddenly at a roundabout or junction, causing the car behind to crash into them. They would then claim against insurers for damage to vehicles and personal injury.
Holman J said: “This was not a case of contrived accidents where two people seek to arrange an accident to defraud an insurance company. Ordinary members of the public were used and innocent drivers involved. Members of the public have been used as pawns.” Justifying the exemplary damages, he added: “The court needs to send a clear message to those who engage in conduct of this nature – that this will not be tolerated and in my judgment this award of exemplary damages is entirely appropriate.“
