AXA Commercial Lines has secured a conviction for fraud for fake £100,000 damages for an injury allegedly sustained at work
The jury at Truro Crown Court took just 42 minutes to unanimously find Paul Gustar guilty on two counts of insurance fraud under the Fraud Act 2006.
The original allegations were that in December 2007, Gustar had hurt his back through a system of work involving repetitive lifting and twisting and County Court proceedings were issued out of Southampton County Court against Gustar’s employer claiming damages in excess of £100,000.
Gustar claimed to have reported the alleged incident to his line manager who gave evidence denying any such report taking place. In addition, the medical records showed a pre-existing back injury and a text message suggested an alternative explanation that the injury was sustained whilst pushing his girlfriend’s car.
The civil claim was abandoned after Gustar changed his story on how the accident had taken place. AXA alleged that this change was in response to his realisation that the original claim was bound to fail.
Following the collapse of Gustar’s civil claim, the court was unwilling to support an application for Contempt. Their decision was not based upon the strength of the case but rather that a full and contested hearing would take up a disproportionate amount of High Court time. As a consequence of this decision, AXA took the decision to pursue a private prosecution, still a relatively rare route to pursue perpetrators of insurance fraud.
On handing down a three year sentence to Gustar (suspended for two), His Honour Judge Harvey Clark said: “This insurance company is entirely justified in bringing this prosecution [and] its purpose has been to deter insurance fraud. I must pass sentence in recognition of this.”
Noting that Gustar’s wife was of a “fragile state of mind” and relied significantly upon Gustar’s care, His Honour Judge Clark remarked that he was showing mercy “with considerable reservation” and suspended the sentence.
“I want the message to go out – that it was appropriate and the insurers acted entirely properly in bringing this prosecution against you … you are a fortunate man. Leave with your wife. Next time I shall show no mercy.”
Chris Voller, Claims Director at AXA, said: “We didn’t take the decision to pursue a private prosecution lightly but it is increasingly important that collectively and individually, the industry does everything within its powers to combat fraud.
“Of course Gustar is just one example of the many thousands of individuals who attempt to defraud our industry every year, driving up the cost of everyone’s insurance, but I believe that the success of this prosecution should serve as a stark warning to anyone who considers attempting to defraud insurers.”
Voller added: “The message is clear – whether it is through more traditional channels or via private prosecution, we have the means and the motivation to pursue and prosecute fraudulent activity wherever we find it.”
David Cole, Personal Injury and Fraud Partner at Blake Morgan, said: “The judge stated it was entirely appropriate for AXA to have brought this private prosecution. If they had not done so the defendant would have walked away without recourse as I have seen happen many times in the past.
“This sanctioned course of action to deal with similar instances of insurance fraud is a huge deterrent.”