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Insurance & Reinsurance
Clyde & Co and Covea have successfully defended a claim for vehicle repairs and loss of profit totalling GBP 1.3 million.
The claimant claimed a loss of profit of GBP 1,650 per day due to his alleged inability to rent out his Lamborghini, which had supposedly been damaged by our client’s insured driver.
The details of the alleged accident and a distinct lack of evidence to prove the loss, as well as a number of linked claims, resulted in this claim being investigated as a potentially staged accident.
The claimant’s request for a drop hands offer shortly before trial was denied. The judge ordered the claim be struck out and the claimant to pay the defendant’s costs, including an interim payment on account of costs in the sum of GBP 40,000.
The alleged accident occurred on 23 November 2019. The claimant alleged his yellow Lamborghini was parked and unattended when our insured’s named driver drove into it causing damage to the nearside. The insured driver left a note to advise of what had happened and accepted liability. The insured driver had great difficulty in explaining how the alleged accident occurred. She claimed that she was attempting to park when she scraped the front left wing of the Lamborghini.
The claimant failed to provide evidence supporting his alleged loss and there were concerns that the accident had been staged.
Prior to our instruction, Covea instructed an engineer to inspect the insured vehicle and the Lamborghini. The engineer concluded that the Lamborghini had already sustained damage and the named driver had not caused the damage claimed. If the insured driver had caused any damage to the vehicle, it was either minimal or had had no effect. The engineer described the damage to the Lamborghini as making “very little sense whatsoever”.
Covea’s investigations had also identified possible links between the parties via a suspiciously similar claim whereby another member of the named driver’s household was involved in a collision with a parked and unattended Bentley Flying spur, roughly 16 months prior to the index accident. Further investigation revealed that the linked claim shared many other common features similar to the one under investigation as well as featuring 2 of the same companies referenced within the documentation presented by the claimant.
The claimant and his company issued for repairs to the Lamborghini at an apparent cost of over GBP 72,000. The claimant provided an engineer’s report which supported this figure. Alongside the claim for repairs there was also a claim for loss of profit. When proceedings were issued this amounted to GBP 400,000. However, the final amount claimed in an updated schedule of loss totalled GBP 1.3 million loss of profit. This was based on the claimant’s plan to rent out the Lamborghini at a cost of GBP 1,650 per day, which he was unable to do when the vehicle was off road. The claimant claimed from the date of the accident to the date of selling the Lamborghini which he said was October 2021. This was a somewhat optimistic valuation given the claimant had rented out the Lamborghini for only 62 days in 15 months prior to the accident.
At the time of the accident the Lamborghini was allegedly in possession of another company. The claimant produced a hire invoice between his company and that company but said no money had actually changed hands. When this was queried the claimant’s response was that he gave the use of the Lamborghini in lieu of payment for modifications to it.
He also produced another hire invoice. Between his company and another supercar hire company. Again, no money had exchanged hands, and again the claimant’s reasoning was that the vehicle was lent in lieu of work done on the vehicle. The claimant provided an invoice for the Lamborghini’s after-market front bumper which was allegedly supplied by the supercar hire company however Investigations revealed that this was actually the claimant’s brother’s company.
There were further alarm bells when images from our engineer’s report showed a yellow Ferrari California under some tarpaulin at the claimant’s premises. Investigations revealed that the Ferrari was the subject of a separate claim being dealt with by another insurance company.
The claimant’s case was that he purchased the Lamborghini in August 2018 to start a supercar rental company. However, he failed to explain why he owned the vehicle for a year before allegedly doing anything in relation to his business.
He was ordered to disclose documents including bank statements, profit and loss accounts, and booking records. He denied the existence of these documents, stating his business had not got off the ground. He claimed the two hire agreements for the Lamborghini were in return for work done to it. We said that any vehicle loans were still transactions of the company with a financial value and there must be some documentation or records available. At this point, the claimant’s solicitors came off record.
Regarding the repairs, the claimant stated that he had his vehicle ‘temporarily repaired’ in February 2020 to render it roadworthy, but that the COVID-19 pandemic affected requests for the vehicle. He produced a word document invoice (therefore alterable and editable) from a garage suggesting the repairs had been completed for just GBP 2,900. The garage’s Facebook page confirmed that it did repair the vehicle, but the images suggested that this was a full repair and not a temporary one.
The claimant continued as a litigant in person. Due to his previous employment having worked at a law firm and being director of a claims management company, the claimant was able to conduct the litigation himself.
The matter was listed for a two-day trial. Under pressure, the claimant requested a drop hands settlement shortly before trial. We informed the claimant this was not an option, but that we would agree to him withdrawing his claim if he made a significant contribution towards our costs.
The claimant rejected the offer for him to discontinue his claim on the basis that he made a substantial contribution in relation to costs. The claimant had not complied fully with directions and his updated schedule of loss did not, perhaps conveniently, carry the correct statement of truth. On the morning of the application hearing the claimant said he had covid symptoms and would be unable to attend.
The initial court order had stated that the trial fee was to be paid after the trial. We obtained a further order that the fee had to be paid before the relisted trial. The claimant did not pay the fee. Despite there being an order for a strike out in the absence of payment the judge elected not to do so. The Claimant had, unbeknownst to the parties, written to the Court requesting that his claim be dismissed with no order as to costs. We proceeded to trial, where the Claimant again did not attend the hearing.
The claim was struck out resulting in a significant saving of over GBP 1.3 million. The judge also ordered that the claimant pay an interim payment of GBP 40,000 on account of costs. This represents a great outcome for Clyde & Co and Covea, particularly given the claimant had sought a drop hands offer close to trial. We are currently reviewing enforcement options.
Whilst suspicious, high value damage claims where significant losses are allegedly ongoing can present a real challenge to insurers, this case demonstrates the benefits of thorough and early investigations followed by the adoption of a robust stance in the face of a significant claim.