A landmark case in insurance fraud has established that information obtained from social networking sites can be lawfully used as evidence. Paul Hughes explains how they can be a valuable tool for insurers.
In the February case of Locke v Stuart, Andrew Edis QC considered for the first time how evidence obtained from social networking sites should be presented in court and laid down guidelines as to what conclusions the court could safely draw from such information.
In this case the defence established links between several individual claimants via Facebook and, through this information, proved that multiple road traffic accidents involving the claimants had been manufactured as part of a large insurance fraud conspiracy.
The judge said that it should be possible to prepare a document that accurately and fairly summarises the relevant contents of the Facebook entries — and identifies which primary facts are in dispute — so that the necessary material can be adduced to deal with that.
The advent of social networking sites, such as Twitter, has marked a watershed for insurance companies in how they can deal with fraudulent and exaggerated claims. It has always been notoriously difficult to challenge the evidence of a medical expert who gives a prognosis in relation to particular injuries. But, given the increasing use of social networking sites — coupled with the lack of discretion of many of its users — it can be possible to obtain useful evidence that challenges the extent of the claim.
Insurers regularly find themselves faced with a claimant unable to work and enjoy their usual hobbies as a result of an accident. Evidence from some sites can assist if they show status updates or photographs to demonstrate the claimant is not as adversely affected as they had claimed.
In cases where fraud, exaggeration or malingering is suspected, the claimant's credibility is crucial. Through information posted on social networking sites, particularly among younger people where use of these sites is prevalent and profiles are updated almost daily, insurers are able to compare the difference between a claimant's pre-accident and post-accident lifestyle. Where an insurer is able to obtain evidence that conflicts with a claimant's statement, then, in addition to challenging expert medical evidence, it also challenges the claimant's credibility.
Defendant lawyers are increasingly turning to social networking sites to investigate a claimant's background and the extent of an accident on their lifestyle. For example, 17 bus passengers recently claimed for injury and — after carrying out a search of all the claimants on Facebook — it was possible to establish links between each of them. Whereas one claimant intimated on their Facebook profile that they had in fact been injured during the crash, other claimants posted comments on their pages about how they would conspire together in order to bring claims for personal injury.
Although the evidence obtained from social networking sites can be compelling, insurers should bear in mind that it is rarely the smoking gun that dismisses a claim completely. It can, however, help to drastically limit the injury claimed for and the resulting compensation.
It can also help provide insurers with some costs protection. For instance, if a claimant has medical evidence saying they will not return to their pre-accident condition for 12 months but Facebook reveals they had recovered much earlier than that, then, while it will not necessarily defeat the claim entirely, it will allow the insurer to assess the true value of the claim and make an offer on that basis. This should provide them with costs protection if the claimant rejects that offer and continues to perpetuate the fraud.
That being the case, insurers should carefully consider when they ought to disclose any evidence that they feel supports their case. The parties are under an obligation to disclose evidence as soon as possible but a party ought not be criticised for withholding crucial evidence in support of their case where the claimant has yet to 'nail his colours to the mast'.
It is sometimes information posted by the claimant's friends that can be incriminating. This was the case in a credit hire claim recently dealt with involving a man who claimed more than £220 000 for the lease of a Lamborghini through a credit hire arrangement.
In this instance, information found on Facebook revealed the claimant's brother had been convicted for several motor offences which alerted lawyers to the possibility of a fraudulent conspiracy. Through further investigations carried out following the initial alert from Facebook, it was possible to defeat the credit hire claim in its entirety and the insurer client recovered its costs in full.
Information on such sites has knowingly been put into the public domain by the claimant and insurers need not fear using evidence from Facebook and other social networking sites in support of defences.
As use of these sites becomes more prevalent and fraudsters grow increasingly sophisticated, it appears that some serial claimants are getting wise to the threat of detection. Therefore, insurers should be mindful of claimants deliberately uploading incorrect information in order to put insurers off the scent.
Ultimately, social networking sites are proving to be a valuable tool for insurers, the police and the Department for Work and Pensions in discovering all kinds of fraud. The recent ruling in Locke v Stuart shows that the judiciary system is becoming increasingly aware of the significance of evidence that can be obtained through social networking mediums.
With clear guidance now issued, insurers can collate and rely on this evidence with confidence and should ensure that such avenues of investigation are routinely followed in tackling fraudulent or exaggerated claimants.
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