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.
Conventional wisdom among policyholders is that there is no point in pursuing costs against unmeritorious personal injury claimants of limited means (“impecunious plaintiffs”) because it can be expensive to pursue them with little chance of recovering the costs. This means in particular that claimants making fraudulent or exaggerated claims often get a “free run”, being able to make such claims with no meaningful risk attached.
However, there are some methods of recovering costs in such circumstance and the Motor Insurers’ Bureau of Ireland (MIBI) are using one such measure – Garnishee orders – to good effect.
Here is a case study example from the MIBI, reproduced in whole.
When an uninsured driver is responsible for an accident they are liable for the entire cost of the claim paid by the MIBI. In such circumstances the MIBI has the power to pursue any uninsured driver for all the costs involved. In recent years, under the management of our Recovery Specialist Dermot Cogan, the MIBI has ramped up our efforts to secure recovery payments from uninsured drivers. Sometimes this activity can be straightforward and other times we need to utilize a more circular approach. Here is an example of one such case.
In 2017, an uninsured driver was involved in an accident for which he was at fault. The total cost for handling that claim came to approximately €84,000. At that time the MIBI secured a judgement for costs against the driver.
Two years later in 2019, that same driver was involved in another accident – only this time he was a pedestrian hit by an uninsured driver. In this later incident the MIBI was required to cover the liability as it was another case involving an uninsured driver.
The Personal Injuries Assessment Board (PIAB) awarded compensation of over €56,000 to the pedestrian for the injuries sustained.
Aware of the outstanding debt against the individual in question arising from the 2017 incident, the MIBI immediately recognized this as a potential garnishee opportunity, i.e., if a debtor obtains an award for his personal injury, the MIBI legally pursue their costs and seek to obtain the full PIAB award or an amount up to the money owed by the debtor.
The decision was taken to enter settlement talks with the debtor’s solicitor, who originally was not aware of the debt owed to the MIBI by his client.
Originally, the solicitor was planning on rejecting the PIAB award and pursuing a claim through the courts with a view to securing a higher settlement figure. However, when it was outlined that the MIBI could, and would, garnishee any amount up to €83,000, a compromise was agreed. This ensured the MIBI received a partial recovery of €45,000 towards for the original (2017) case and the new (2019) claim was not contested through the courts which resulted in a further saving €50,000 for the MIBI.
Furthermore, no additional legal costs were incurred by the Bureau which saved a further €17,000.
Overall, the impact was a recovery of €45,000 and savings in the region of €67,000, representing a very satisfactory outcome for the MIBI which illustrates the importance of our Holding to Account strategy.