You messed my pants!
January 4, 2006 6:07 AM   Subscribe

£45 GBP lost to "compo" in Liverpool - Insurance fraud rife in UK A man who tried to sue a local council after he soiled his trousers tops a list of spurious public liability claims which cost UK local government and insurance companies an estimated £250m each year, reports the UK Guardian. Publishers of said report, Zurich Municipal are tackling the growing issue of fraudulent insurance claims. They found that "Only 16% of adults questioned said that they would contact the police if they knew someone had submitted a fraudulent claim against a council." Knowsley [Liverpool] Metropolitan Council "saw its claims from slips and trips soar ... to £5m annually." - for a borough of 111,000 adults that's an impressive £45 GBP per person per year. Among other factors, Zurich blames the "claims farmers" decried here by our Citizens Advice Bureau but also intriguingly says they are "continuing our campaign to combat school arson through initiatives such as our school theatre programme, ACT...."
posted by magpie68 (25 comments total)
Of course that's 45 per person per year... darn.
And "compo" is slang for compensation on Merseyside. And before any Liverpudlians complain, I'm not scouse-bashing just working off the example given by Zurich, I don't have other councils figures to hand.
posted by magpie68 at 6:11 AM on January 4, 2006

I used to work for the company mentioned in this as a programmer and I don't dispute the claims, though the figure is likely inflated.

This must be tempered however with the millions they and other companies screw off honest customers with:

get-out clauses in the small print invalidating the whole claim for spurious reasons

intransigence in claim handling (2+ years waiting for a decision, meaning I had to pay inflated premiums in the interim)

screwing loyal customers for bigger premiums on their automatic renewals hoping they wouldn't notice.

Don't feel sorry for insurance companies.
posted by seanyseansean at 6:22 AM on January 4, 2006

Whenever I see an ad for 'no win, no fee' I wonder what the underlying economics are. I think that if I had recourse to one I would want it made pretty specific what it was going to really cost me before actually going through the court case. How do these people manage to run up such debts - do they bother to check the details before they sign on the dotted line? (referring to last link in FPP) Does anyone here have experience with these things?

I have to admit to finding it difficult to sympathise with insurance companies as their raison d'etre seems to be screwing their customers at any opportunity.
posted by biffa at 6:25 AM on January 4, 2006

I absolutely loathe this kind of article , it reminds me of the sun during the thatcher years , labelling people claiming benefits as fradulent scroungers whilst conducting insider trading and arms deals , its a surprise to see shit like this in the guardian , its amazing how no one ever reports the benefits that go unclaimed or the amount of tax businesses evade , so the guy wanted 50 quid for a new pair of trousers ? so fucking what ? oh yeah , he's a scouser as well , so that must make it dodgy eh ?Of course you're Scouse bashing , you pie eating geordie wank.
posted by sgt.serenity at 6:47 AM on January 4, 2006

Oh come now, biffa. Insurance companies exist to make money for their shareholders. Screwing their customers is merely the means. And probably great fun, too.

Interesting how insurance companies are now thought of as the Government is - in some way morally ok to defraud.
posted by athenian at 6:47 AM on January 4, 2006

sorry that should read - pie guzzling geordie wank.
posted by sgt.serenity at 6:51 AM on January 4, 2006

And before any Liverpudlians complain

Why would we complain? This stuff is a source of local pride.
posted by PeterMcDermott at 6:55 AM on January 4, 2006

Watch your pockets.
posted by biffa at 7:00 AM on January 4, 2006

sgt s, I had curry for lunch. And wank is a verb.
posted by magpie68 at 7:02 AM on January 4, 2006

Well guess that unscrupolous insurers finally met their nemesis under the form of "claim farmers" ...a kind of moral equivalent of ambulance chaser lawyers I guess.

If claim farmers are there it happens because insurance companies are making extra-profit, but as insurance business is almost impossible to enter the competition for money comes under the form of claim farming instead of competition among insurers.

Obviously the outlook for insured people isn't good as the two most probable scenarios are

1) insurers (all of them, they're an oligopoly with no competition but formal least expensive one )find and close as many loopholes as possible by contract..

2) they settle with the claim firm for an amount of money to settle claims in bulk, thus reducing cost while closing loopholes

Assuming it's all "people fault" is the usual trite strategy of blaming the weakest of everything. It works, people don't react much.
posted by elpapacito at 7:03 AM on January 4, 2006

From the OED

1 wank, n. (a.)
2 wank, v.

Think about that next time you're having a wank magpie68.

I knew all that practice I did looking up rude words as a child would come in handy one day. (no pun intended)
posted by biffa at 7:10 AM on January 4, 2006

When I was living in Providence Rhode Island, that hotbed of nefariousness, I recall hearing that insurance fraud was somewhere in the top ten sources of income for residents of that state.
posted by StickyCarpet at 7:18 AM on January 4, 2006

bloody hell , i'm peaceful today , sorry bout that geordie.
posted by sgt.serenity at 7:28 AM on January 4, 2006

Damn, did I leave my webcam on again? And pass me a pie will you? /derail

Seriously, sgt s, I have to say 2 wrongs don't make a right: some insurance companies may well be less than ethically pure (with some, well one notable exception) but that does not justify fraudulent claims against your council, who - win or lose - will not get all the admin costs back and therefore everyone suffers as a result.
posted by magpie68 at 7:33 AM on January 4, 2006

" He had jumped out of his window to avoid being caught with another woman when his girlfriend returned home unexpectedly." - From the first link.

What on earth?
posted by Navek Rednam at 7:40 AM on January 4, 2006

They found that "Only 16% of adults questioned said that they would contact the police if they knew someone had submitted a fraudulent claim against a council."

This figure seems rather high to me. Presumably, this survey wasn't done in Liverpool.

It's not just against councils, either. If somebody bumps your car, it's common knowledge locally that an automatic whiplash will get you £1500. Meaning that provided liability is clear and you can come up with the requisite paperwork, giving you £1,500 is more cost effective than paying lawyers to fight it.

Not justifying any of this, mind you. Just noting that it is part of the warp and weft of our local culture. However, it reminds *me* of the Thatcher years as well, but what it reminds me of most was the de-mutualization of the Building Societies, when any middle class person who had a couple of hundred quid lying around could be assured of many big pay days, simply by depositing £100 or so into as many building society accounts as they could manage. Then, when they went back into private hands, the middle classes got a pay day of around £1000 for each account.

Insurance claims are the way that the poor get their fair share of the free handouts.

Elpapacito: our claim farming companies make your ambulance chasers look like bastions of ethical purity. They don't actually provide any kind of service at all. What they do is, set up phone lines, take the clients and then subcontract the work to private solicitors. (And it's either at rock bottom rates, or on a no-win, no-fee basis -- but with the claim farmers taking the success premium off the top.)

If lawyers are whores, then claim farmers are like brutal pimps who beat the whores with a wire coathanger in order to extract every last penny, while simultaneously ensuring that no john ever gets a square deal.
posted by PeterMcDermott at 7:52 AM on January 4, 2006

Navek, he probably told a different story to the court, but clearly got found out. You just have to watch the sub-prime satellite channels for a few hours to see dozens of adverts for these claims farmers. Add one greedy person with a stupidity injury and you've got a spurious claim in the making. Here are some more from my homeland.
posted by magpie68 at 7:59 AM on January 4, 2006

Watch your pockets.

Oo-arr-oo-arr-ay, Oo-arr-oo-arr-ay!
posted by PeterMcDermott at 8:00 AM on January 4, 2006

and more....
posted by magpie68 at 8:02 AM on January 4, 2006

That's a somewhat misleading story, magpie68, insofar as before you can get any lawyer to take on your case, there has to be some evidence of negligence on behalf of the defendant.

Granted, sometimes this evidence will crumble on further investigation, but if someone gets a bump from walking into a piece of wood, its generally their own tough luck unless:

a.) that wood shouldn't be there in the first place, and
b.) somebody's negligence is the cause of its being there

Same with trip claims. If the councils would keep the fabric of our cities in reasonable order, none of these claims could succeed. As it is, they're making a calculation that settling a certain number of claims is easier than raising the rates to pay for maintaining the pavements.
posted by PeterMcDermott at 8:10 AM on January 4, 2006

If the councils would keep the fabric of our cities in reasonable order, none of these claims could succeed.
If people took a little more responsibility for their own actions my council tax would be lower.

But sod that, where are the comments on the "combat[ting] school arson through ... theatre" initiative?
posted by magpie68 at 8:25 AM on January 4, 2006

I think this is on-topic enough. UK Mefites may be interested to see a report from 2004'Better Routes to Redress' which essentially concludes that the 'compensation culture' so beloved of the UK press is an urban myth. The reality is that the number of claims for compensation in the UK has been declining. The cost of tort legislation is actually pretty low in comparison with our European neighbours and considerably less than the US whose path we are often alleged to be following. The report make a number of recommendations that could make things better for genuine claimants who have it far from easy. If you want some more evidence then consider some of the statistics presented here and here for the appalling access some workers have to adequate compensation they suffer at work.
posted by biffa at 8:47 AM on January 4, 2006

ah i remember ......a completely random chap tried to kill me and i received 3000 pounds for my trouble , less 1500 for being convicted of not paying a 14 pound pizza hut bill one year earlier.
I think thats why i reacted so much to this post.
posted by sgt.serenity at 9:36 AM on January 4, 2006

Another result of the (perceived) compensation culture is that many businesses have become worried about any slight possibility of being sued and this can make them downright unhelpful. I'm thinking of cafes who refuse to warm up baby food for customers just in case it gets too hot, injures the child and the parents sue. I'd rather just take responsibility for myself and have the option of taking risks sometimes.
posted by squashy wol at 11:28 AM on January 4, 2006

Sounds like an open and shit case to me.
posted by rhymer at 12:03 PM on January 4, 2006

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