Insurer wins fraud appeal – 18 years later

Insurer wins fraud appeal – 18 years later | Insurance Business Canada

Insurer wins fraud appeal – 18 years later
by Callum Glennen

A landmark court decision was handed down on Wednesday in the case of Zurich vs Hayward, setting a new precedent for how insures can catch up with fraudsters potentially years after a claim has been settled.

A unanimous Supreme Court judgement declared post-settlement evidence may be used to recover pay outs in fraud cases. The decision affects situations where insurers may be suspicious of a claim, but do not have evidence immediately at the time of settlement.

The case in question started 18 years ago when Colin Hayward injured his back in 1998, claiming chronic pain left him unable to work and restricted his mobility. Zurich contested the claim at first with video evidence of Hayward doing heavy work at home, but the claim was later settled for £134,973 (C$233,495).

Two years later neighbours of Hayward noticed he seemed to have completely recovered prior to the settlement being reached, and Zurich sought to rescind the settlement. With the settlement agreement set aside, Hayward was awarded damages of £14,720 (C$25,464) and ordered to repay the original sum.  The decision reached the Supreme Court after Hayward appealed.

Speaking with Insurance Business UK, claims fraud & investigations manager at Zurich Scott Clayton said the insurer is thrilled to be finally putting the case behind it.

“It’s unusual for it to take this length of time but it’s purely just as a result of the steps that were taken through the litigation process,” Clayton said.

It’s been a rocky road for Zurich with this case, and Clayton said the team, some of which have been there since the very beginning, have faced many ups and downs over the course of perusing the case.

“It was frustrating to settle it in the first instance because we had suspicions. Then we were delighted with the initial County Court decision saying that he should be paying us money back, and then a disappointment at the Court of Appeals decision. It’s been a rollercoaster but we’re glad we’re ending on a high.”

Clayton said the reason Zurich perused the case as far as it did was on moral grounds. The company though that if it comes to light a settlement was based on lies, it should be possible to revisit the case.

“What you were left with after the Court of Appeals decision was in essence a claimant, once they receive their damages, could walk out of the court or the solicitor’s office with their cheque and throw their crutches away,” said Clayton

“As a point of principal, that doesn’t sit with us in terms of natural justice. This case was very compelling because the fraud was actually admitted; it was the effect of the fraud and the remedies for it that were under contention.”

The decision is expected to act as a deterrent to fraudsters. Where in the past crooks might have considered they were in the clear once a case was settled, this is no longer the case. Clayton said honest customers only stand to benefit from this judgement as it makes life a lot harder for people

“This case demonstrates the industry is just not prepared to tolerate these fraudsters, and it’s a really important one as a preventative tool to make sure that we just don’t have these people exaggerating, lying, being dishonest getting a cheque and then walking away into the sunset.”

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