For policyholders subjected to a personal injury claim they believe to be fraudulent, it often feels like the system is rigged in favour of the claimsters. Solicitors are happy to take cases on a no-win, no-fee basis. Insurers are often ready to settle as a commercial expedient, ignoring the evidence. Courts appear reluctant to sanction fraudulent claimants beyond throwing cases out, even pulling their punches on costs, so that victims of fraud are often left with a huge legal bill despite doing nothing wrong. And until recently, many policyholders reported that An Garda Siochana was reluctant to take on insurance fraud cases.

But the wheel is slowly turning, with the establishment of the Garda Insurance Fraud Coordination Office (IFCO). Established as part of the National Economic Crime Bureau (NECB), IFCO is a small unit right now, but the intent is clear – to provide a clear and knowledgeable route to making a complaint regarding insurance fraud, with the backing of the resources of the national bureau with overall responsibility for fraud prevention and detection. 

Let’s look at the fundamentals. If you are aware of a fraudulent insurance claim or an attempt to make a fraudulent claim, you are legally obliged to report it Under Section 19 of the Criminal Justice Act 2011. 

There is no particular legal definition for insurance fraud. However, the offence of deception as defined in Section 6 of the Criminal Justice (Theft and Fraud Offences) Act 2001 provides a broad definition that would fit with what is commonly referred to as ‘insurance fraud’. This offence is punishable on conviction by up to 5 years imprisonment. 

Section 6 (1) A person who dishonestly, with the intention of making a gain for himself or herself or another, or of causing loss to another, by any deception induces another to do or refrain from doing an act is guilty of an offence.

The falsification of a personal injury claim for compensation by exaggeration of the incident, the injury suffered, by staging an accident/incident or by supplying false information in support of a personal injury claim could constitute ‘insurance fraud’. In insurance fraud cases, the claimant is deceiving or attempting to deceive a person or entity to pay compensation to which the claimant would not be entitled but for the deception.

According to the Section 2(2) of the 2001 Act a person deceives if he or she-

1. a) Creates or reinforces a false impression, including a false impression as to law, value or intention or other state of mind,
2. b) Prevents another from acquiring information which would affect that person judgement of a transaction, or
3. c) Fails to correct a false impression which the deceiver previously created or reinforces or which the deceiver knows to be influencing another to whom her or she stands in a fiduciary or confidential relationship

Other potential offences (prosecutions are not limited to these offences) include:

• Perjury – Section 2 Criminal Justice (Perjury and Related Offences) Act 2021
• Perjury – swearing absolutely and falsely in a matter material to the issue or cause in question in a judicial proceeding (court hearing) – Contrary to Common Law
• False / misleading information in an Affidavit – Section 14(5) Civil Liability and Courts Act 2004
• Dishonestly give or cause to be given, or adduces or dishonestly causes to be adduced, evidence in a personal injuries action that is false or misleading – Section 25(1) Civil Liability and Courts Act 2004.
• Dishonestly give or cause to be given, or adduces or dishonestly causes to be adduced, evidence in a personal injuries action that is false or misleading in any material fact (knowingly) to a solicitor, person acting for the solicitor, or an expert – Section 25(2) Civil Liability and Courts Act 2004.
• Prohibition of giving certain false information or wasting Garda time – Section 12 Criminal Law Act 1976
• Damaging property with intent to defraud – Section 2(3) Criminal Damage Act 1991

It must be noted that ‘insurance fraud’ only becomes a suspected offence when a person or entity actually submits a claim for compensation. It might be suspected that a person has staged an accident or a slip, trip or fall, but that would not constitute ‘insurance fraud’ until they actually submit a claim for compensation that appears to be fraudulent, whether that is to the Personal Injuries Assessment Board or to an Insurance Company, or other responsible entity. 

Insurance fraud is a criminal offence. It is important to note that the evidential standard in criminal cases is substantially higher than in civil cases. A court cannot convict in a criminal case unless they are satisfied of a person’s guilt ‘beyond a reasonable doubt’. So the IFCO will require a compelling case to be made before accepting a complaint.

Because of this, the gathering of evidence should begin immediately you suspect there is an issue, to defend a civil claim and for possible use in a criminal investigation. 

The resources required to report such a suspicion are not insubstantial and while the Alliance for Insurance Reform has agreed a Memorandum of Understanding with the Garda NECB in relation to the reporting of insurance fraud by the Alliance and its members, we would strongly recommend that in the first instance you pursue a case of suspected fraud through your insurer, who should have the expertise and resources to do so.

IMPORTANT NOTE: The Alliance brings together 46 civic and business organisations from across Ireland, representing over 55,000 members, 700,000 employees, 622,000 volunteers and 374,000 students in highlighting the negative impact of persistently high premiums and calling for real reforms that will quickly reduce liability and motor insurance premiums to affordable levels and keep them that way. 

We are neither lawyers not insurers. This blog is based on the collective experience and opinions of our members. It does not constitute legal advice. Professional advice should be sought before acting on any of the issues raised in this blog.