How to Detect Fraud in Personal Injury Claims

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Insurance fraud has been estimated to account for about 10% of general insurance costs in Australia ($2B annually). This doesn’t take into account undetected fraud.

Some people may take the view that insurance fraud is a victim-less crime. But most would agree that money spent investigating, defending, paying or prosecuting fraudsters could be better used to reduce insurance premiums and pay genuine claims.

So what are some red flags that could suggest fraud in a personal injury claim? Here are some that we’ve identified:

Late claim

If a claim is started close to the expiration of a Plaintiff’s limitation period, then questions will arise about why the Plaintiff has taken so long to bring their claim. Check what treatment the Plaintiff has had since the event. Consider the Plaintiff’s current circumstances. Has the Plaintiff had a change in their employment status, medical advice, legal representation or personal circumstances? One or more of these things may explain why the claim has been brought late.

Delay in medical treatment

A delay in seeking medical treatment after an event is usually detected by treating health care providers and medico-legal experts. The longer that a Plaintiff delays treatment for an injury, the more difficult it may be to prove that the incident caused it. Of course, some medical conditions are characterised by a delayed onset of symptoms. So consider how similar injuries are diagnosed and treated.

Just started a job

A Plaintiff injured in a workplace just after they’ve commenced employment may come under more scrutiny than a longstanding employee. Consider the Plaintiff’s employment history. Did the Plaintiff start the job after a long period of unemployment? Were they adequately trained and supervised? Did the Plaintiff’s employment history suggest they were capable of performing the task?

Project coming to an end

If a claim is made by a Plaintiff working on a project that is approaching finalisation, the Defendant may be suspicious of the Plaintiff’s motivation for bringing their claim. Has the Plaintiff brought a claim in similar circumstances in the past? Was the Plaintiff facing other disciplinary action from the employer? If not, the Defendant’s suspicions may lead nowhere.

Retirement approaching

Claims by Plaintiffs close to retirement age will usually be managed with caution. If a Plaintiff goes from full-time to part-time employment after their injury, check if there were social security or superannuation incentives for doing so. Investigate the Plaintiff’s retirement plans and financial commitments. If a Plaintiff worked in a physical occupation, are there statistics available about the average retirement age of men/women doing that work.

Claims history

It goes without saying that a history of numerous claims will be of concern to a Defendant. Determine the seriousness of the injuries in those past claim/s and their relevance to the current one.

No witness

If there were no witnesses to an incident, then there is no one to verify a Plaintiff’s account. However, the lack of a witness will not necessarily prevent a Plaintiff from succeeding in their claim. Check whether documentary evidence could support the Plaintiff’s version. Did the Plaintiff immediately report the injury? Has the Plaintiff’s description of the incident stayed consistent over time?

No reporting

Defendants are right to be suspicious of claims for injuries that were not reported when they occurred, particularly where a workplace policy requires all incidents and injuries to be reported. Did the Plaintiff report their injury to health care providers and not the Defendant? If so, this may be adequate. Did the Plaintiff later describe the incident as involving a ‘sudden’ or ‘immediate’ onset of pain? If so, why didn’t they report their injury?

Limited treatment

How much treatment has the Plaintiff received for their injuries since the event? Check whether the Plaintiff’s records contain references to other conditions. Is there limited references to the injuries for which damages are claimed? If other conditions dominate the treating records or a Plaintiff has had little treatment, then Defendants may query the extent of the impact that the injury has had on the Plaintiff’s life.

Holidays

It’s a widely held belief in personal injury litigation that: a Plaintiff able to travel; is also able to work. Defendants will be suspicious of Plaintiffs that go on holidays after suffering an injury, which is apparently so serious, that they cannot work. If possible, find out when the Plaintiff made their travel arrangements. Was it before or after the event? What kind of holiday did the Plaintiff go on?

For Defendants

Defendants should use red flags like these to detect fraud and limit their exposure to damages, legal costs and rises in insurance premiums. The sooner that fraud is detected, the faster that parties can dispose of a claim.

However, these red flags do feature in lots of personal injuries claims. So, one or two of these in isolation doesn’t necessarily mean that a Plaintiff is bringing a fraudulent claim. It may simply be that the Plaintiff needs to offer a satisfactory explanation.

Note to practitioners and insurers: Denning Insurance Law does not give permission to any other law practice to reproduce or publish any part of this article in correspondence or otherwise in any claim. 

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