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Tag: icbc fraud

The Cost of Insurance Fraud in BC

If you regularly read this blog you know I hate insurance fraud.  When fraudulent claims are weeded out that’s a good thing.  However, I equally dislike the cost of fraud being blown out of proportion.
Have you ever heard sound bites that insurance fraud is on the rise or spiralling out of control?  If you have a quick look behind the sound bite is important.
Occasionally the insurance industry provides press releases discussing the high cost of insurance fraud.  Often these are accompanied with the suggestion that some sort of ‘reform‘ is needed before fraud makes the system unsustainable.  We don’t get much of this nonsense in BC but in other parts of Canada this is an old song and dance.  The reforms that are urged typically boil down to stripping individual rights for the benefit of insurer profits.
So what is the hard data behind insurance fraud statistics in BC? It turns out, at least insofar as auto insurance claims are concerned, that there is no data.
The BC Utilities Commision recently asked for data addressing auto insurance fraud in BC.  Here is the exchange:

Other Provinces, Ontario in particular, have had a lot of discussion of the high cost of fraud.    A number is often put to the cost of fraud without any hard data to back it up.  It is important to look behind the sound bites to see what actual data the insurers have when they make such allegations.  Perhaps other Canadian insurers will be as willing as ICBC to show their hand and reveal what actual data they have.  Turns out, there may not be any.

More on the Real Consequences of Insurance Fraud

Last month I wrote about why I hate insurance fraud.   A quick look at comments following stories of personal injury claims in the news provides insight into the harsh judgments personal injury claimants face by some members of the public.

Although the cynicism and doubt cast on legitimate claims is the most unfortunate consequence of insurance fraud , there are more well recognized effects of fraud and these are the costs to the public at large.  Fortunately the civil consequences for being caught in a fraudulent scheme can be high and this was demonstrated in reasons for judgement released last month by the BC Supreme Court, New Westminster Registry.
In last month’s case (ICBC v. Wiese) the Defendant was insured with ICBC.   Between 1997 and 2005 ICBC alleged that “there were an ongoing series of fraudulent acts and representations by Mr. Wiese to ICBC, both directly asserting certain facts to be true regarding his residence and also providing statements and other updated information though which that pretence was maintained” Over the years the Defendant was apparently involved in “14 separate accidents involving seven different vehicles…resulting in payments out from ICBC of $102,855.48“.
ICBC sued for damages and succeeded.  Mr. Justice Schultes awarded ICBC not only the cost of the claims paid out but a further $70,000 in punitive damages to punish the defendant for his repetitive “fraud on the public“.
If you ask a Plaintiff who has unfairly had their credibility called into question by an insurance defence lawyer they will tell you that insurance fraud causes harm to others beyond insurers.  Cases such as the above serve as a stark and welcome reminder that the cost and consequences of insurance fraud are high.

ICBC, Fraud and Jury Trials

Reasons for judgement were released today dismissing a jury notice in an alleged case of Fraud against numerous defendants.
In this case ICBC was the Plaintiff.  ICBC argues that ‘the defendants conspired to defraud it through various claims relating to stolen vehicles and through a collision that it says was staged and it seeks, among other remedies, an award of punitive damages.’
ICBC elected to proceed by jury trial.  One of the defendant’s brought a motion to strike the jury notice.  After reviewing many of the leading authorities dealing with whether a jury notice should be struck pursuant to BC Rule of Court 39(27), Mr. Justice Hinkson granted the defendant’s motion holding that he shared the same doubts that Mr. Justice Mededith held when dismissing a jury in the United Services case, particularly that:

I doubt that the jury (especially unaided by the pleadings) would understand the significance of evidence as it goes in.  The length of the evidence (protracted by frequent intermissions by way of voir dire) and the variety of questions arising therefrom will be confusing.  The many questions to be put to the jury at the end of the trial will be difficult to formulate for intelligent analysis by the jury.  The speeches of counsel relating to those issues will be difficult to assimilate as will the judge’s charge and his review of the evidence

In sum, I conclude that a civil jury trial in the circumstances would be altogether unmanageable.  Add to the reasons I have given, the complexity of jury selection alone, and the difficulty of ensuring absence of prejudice in the light of the multiplicity of parties.

To permit the trial to proceed by jury would threaten to virtually paralyze the judicial process and deny the plaintiff and some defendants and third parties their rights.