I note the speculation among correspondents that job losses in solicitors’ fraud departments are because (a) there was never really so much fraud around in the first place and/or (b) insurers are now paying fraudulent claims because it is cheaper than fighting them. Both arguments are misconceived.
First, more than 50 years ago, C Northcote Parkinson explained precisely why the amount of work to be done and the number of people doing it are not related. However, I have seen no reduction in the overall number of fraudulent claims. There are changes in typology, for example the large increase in attempts to claim for industrial deafness (either instead of, or as well as, whiplash) but, on the whole, the percentage of fraud is at least the same, and arguably greater, than it was.
Second, on the arguments presented, it is equally possible that insurers are refusing to pay many portal claims and those claims are going away – not so much that it is cheap for D to pay, but that it is unprofitable for C to litigate. Of course, modesty forbids one to speculate that insurers’ enhanced ability to root out fraud is due to the excellent training they have had from their lawyers.
James Pinder, partner and national head of counter-fraud insurance, DWF