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Fun-dough-mental dishonesty: Baker’s dishonesty and exaggeration costs him dearly

  • Market Insight 9 January 2020 9 January 2020
  • UK & Europe

  • Insurance & Reinsurance

Using the pioneering Martello counter-fraud strategy, we have secured the discontinuance of a £165,000 claim for injury, loss and costs stemming from a genuine accident.

Fun-dough-mental dishonesty: Baker’s dishonesty and exaggeration costs him dearly

The Claimant was employed as a master baker for many years by a family-run baking firm insured by AXA. In September 2016 he was clearing a blockage from a dough machine at the insured's premises when, unbeknownst to the Claimant, a work colleague switched the machine back on. This caused the Claimant to trap his left hand in the moving parts.   

Liability was admitted and it was not disputed that the Claimant suffered an injury to his left wrist which prevented him from working. Indeed, no concerns were initially raised in the matter and it proceeded as any other genuine claim.

The first hint that something was amiss was when the Claimant changed his retirement age. He had consistently told his fellow employees that he was going to retire at 65, which would have been four months post-accident. However, after the admission of liability, he claimed that he had, in fact, planned to retire at 69. On the basis of a further four years of future lost earnings, the value of his claim went up dramatically.

It was not until the medical records were disclosed that further issues came to light, prompting the referral to the Clyde & Co Fraud team. These showed that he had attended for taxi medicals during the period he said he was completely unable to work. The records also included references to him working as a taxi driver.

Following the referral we deployed the Martello strategy, applying to amend the Defence to plead section 57 fundamental dishonesty and vacate the trial. The application was granted and the Claimant was ordered to provide further disclosure and witness evidence.

In that further witness evidence, the Claimant attempted to explain away the strong indication he was working rather than take the opportunity to row back on his dishonesty. He freely admitted (because he couldn’t now deny it) that he held a taxi licence, and had been doing some taxi driving. However, he stated that this was purely to help out his sons, and any fares he did receive he gave to his sons and did not keep.

Whilst there was no very obvious evidence of a payment of wages into account from the additional disclosure, the documentation provided did give rise to further questions. Most importantly, why was there a significantly larger amount in his bank account now than when during the time when he was working as a baker, given that he had supposedly not worked for three and a half years?

Nevertheless, there was no surveillance and the medical records suggested only sporadic driving.  

Also to be taken into account was the fact that the Claimant had never specifically denied being able to drive and had not claimed any loss of taxi earnings. He had clearly been injured and would have lost time off work and required care and help in the garden.

Prior to our involvement, the Claimant indicated that he would settle for a global amount of £100,000, to include lost earnings, future lost earnings, gardening, care and assistance, future care and assistance and future gardening. His costs had been fixed at a maximum of around £55,000.00

Following our involvement, the Claimant made a costs inclusive offer of £50,000, which was reduced to £30,000 the day before trial.

Whilst the offer was a discount on the likely 'genuine' aspect of the case, it was rejected and we reiterated our desire to proceed to a final hearing. When confronted with the real risk a judge might find him to be fundamentally dishonest, with all that would entail, the Claimant offered to discontinue his claim.

That offer was accepted, saving nearly £165,000 in costs and damages.  

The case shows that it is never too late to raise these issues, as long as this is done properly. This case was set for trial and all directions had been complied with. However, by undertaking proper research and using the Martello strategy to present the evidence of exaggeration/dishonesty in a cogent and clear way, we were successful. 

Whilst some may have accepted the £30,000 offer and categorised that as a “win”; our experience with the strategic use of Section 57, informed us we could save the client even more, and send a clear and important message to people thinking of perpetrating similar types of fraud if we held firm.

This case emphasises the crucial importance of claimants being  up front and honest about their circumstances and ability to work to ensure they receive the fair and appropriate level of compensation and don’t risk losing everything in an attempt to play the system in the search for more.

Should you have any cases where fraud is suspected, please refer them to Damian Rourke in the fraud team for further discussion.


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