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Fabricated road traffic accident

At a glance

  • This case shows that the courts continue, as far as they are able, to support insurers in their continuing efforts against fraud.
  • The Court of Appeal supported the trial judge, noting the claim had been maintained and pursued over a significant period of time – a year
  • Relatively lengthy custodial sentence was intended to deter similar claims and to indicate the courts would not tolerate them

The case of: The Crown v Nikki David Robert McKenzie, 21.08.13, Court of Appeal (Criminal Division)

The defendant was convicted of one count of fraud that was part of a wider conspiracy to defraud insurance companies by claims for damages through fabricated road traffic accidents. The conspiracy had involved 25 fraudulent claims for which insurers had paid out £483,000. The leader of the conspiracy had been sentenced to seven years’ imprisonment.

Get the facts

  • “Crash for cash” is not a victimless crime
  • The victims are the insurers who pay the fraudulent claims, and the insured motorists whose premiums are necessarily inflated to provide for such claims
  • Zurich fraud teams most commonly deal with three types of scam — induced, staged and contrived

The defendant said he was a passenger in a car involved in an accident, and he claimed damages for a whiplash injury he said he consequently suffered. The accident had not occurred. The defendant pursued his claim for a year and the insurers paid out £33,000 for his claim. The defendant was later charged with related offences.

The trial judge noted that the defendant had a good job and that he had a family to support. However, the judge classified the offence as insurance fraud involving £20,000-£100,000 carried out over a significant length of time. The defendant was convicted and sentenced to 15 months’ imprisonment. He was also ordered to contribute approximately £3,200 to prosecution costs.

The defendant appealed against the sentence and the amount of his contribution towards prosecution costs. The Court of Appeal held that this type of crime, which it referred to colloquially as “crash for cash”, is not a victimless crime. Not only did the crime cost insurers millions of pounds, but it added approximately £50 annually to each motorist’s insurance policy.

The Court held that the trial judge had clearly intended the sentence to act as a deterrent for this increasingly prevalent type of offence. Further, although the offence involved only a single fraudulent claim, the defendant had pursued the claim over a significant length of time.

The trial judge had taken account of the defendant’s personal circumstances and the fact that the case had taken a long time to go to trial. The judge was entitled to impose the sentence of 15 months’ imprisonment.

With regard to prosecution costs, these should only be ordered relative to a defendant’s means. The trial judge had not had information as to the defendant’s financial means and the judge did not know whether the defendant would retain his job on release from prison. The defendant would have to pay the costs within 10 months after his release, and it was a significant sum, given his financial circumstances. Further, the defendant’s family would not have the support of the defendant’s income when the defendant was in prison. The Court reduced the defendant’s contribution to prosecution costs to £1,500. The appeal was allowed to that extent.

Please click here for the full judgment.

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