'Fraud' and fraudulent claims

Bugra, A. and Merkin, R. (2012) 'Fraud' and fraudulent claims. British Insurance Law Association Journal, 125. pp. 3-22.

Abstract/Summary

In this paper we examine the meaning of the word “fraud” as it is applied in the context of fraudulent claims. We consider whether the definition and the legal treatment of fraudulent claims are appropriate. We seek to argue that the law is too rigid and that some judicial discretion would be a worthwhile modification. We also suggest that the approach of the English and Scottish Law Commissions, in their December 2011 Joint Consultation Paper demonstrates insufficient flexibility. The paper includes some reference to the position in Australia under s 56 of the Insurance Contracts Act 1984 (Cth), under which the law is, in certain circumstances, able to allow the punishment to fit the crime, a principle which in our view could be extended. We have no sympathy with fraudsters, and we do not underestimate the costs of fraud for the insurance industry and for honest claimants but, for the reasons indicated in our paper, we are wary of absolute rules and we suggest that fears that a more generous approach might amount to a fraudster’s charter are somewhat overstated.