The insurer AXA in the UK successfully brought a private prosecution for a fraudulent claim.
The insured alleged that he had damaged his back in the course of his employment and claimed £100 000 against his employer. Medical records showed that the back injury pre-existed the date of the alleged injury and evidence suggested that the injury was sustained while pushing his girlfriend’s car. The insured’s allegation of having reported the incident to his line manager was also disputed.
The claim was successfully resisted by the insurer on behalf of the employer. Following a failed application for a contempt of court by the insurer, the insurer embarked on a private prosecution. The insured was found guilty of two counts of fraud and given a three-year suspended sentence. The court said that the insurer was entirely justified in bringing the prosecution to deter insurance fraud.
AXA commented that the success of the prosecution should be seen as a “stark warning to anyone who considers attempting to defraud insurers”.
Private prosecutions by insurers for fraudulent claims are also possible in South African Law. The prosecuting authority needs to issue a certificate declining to prosecute.
Such prosecutions are rare but might be timely in appropriate cases with fraud and corruption on the rise.
