AXA Insurance, with the help of international law firm DAC Beachcroft, has been awarded exemplary damages in its Court of Appeal battle against perpetrators of what Lord Justice Flaux described as “a sophisticated and sustained fraud.”
Announcing the victory, the insurer noted that the AXA Insurance UK Plc v Financial Claims Solutions Limited and others case involved a mixture of ghost broking, policy inception fraud, bogus claimants, forged witness statements, made-up medical reports, and a sham solicitor. The large-scale personal injury claims scam, which was discovered by AXA in 2014, operated through fake law firm Coelum Legal.
In the first instance, it was ruled that AXA was entitled to its costs but not to exemplary damages – even with the claims being called “rotten to the core” by a High Court judge.
“I am delighted with the decision which finally resolves decades of uncertainty around the application of exemplary damages,” said Claire Laver, counterfraud partner at DAC Beachcroft. “It is still rare for courts to award exemplary damages but the Court of Appeal clearly felt that the fraudsters’ activities were so extreme that exemplary damages were appropriate.”
For AXA Insurance counterfraud manager Tom Wilson, the appeal ruling should serve as a deterrent.
He said: “This decision from the Court of Appeal, clarifying the law on exemplary damages, helps send out a clear message to anyone attempting to defraud insurance companies and will make unscrupulous organised fraudsters pause and think about their actions carefully.
“Insurance fraud of this type hits ordinary policyholders in the pocket, and we are delighted that this new ruling could see fraudsters pay in kind for their outrageous actions.”
