£170,000 credit fraud hire claim results in custodial sentences

Published 28 March 2018

DAC Beachcroft secures 12 month custodial and 9 month suspended sentence for husband and wife fraudsters in £170,000.00 credit fraud hire claim.

On 28 February 2018 DAC Beachcroft secured findings of contempt of court against husband and wife, Harjit Singh Kapoor and Kuljit Kaur Kapoor of Brentford, London. Kapoor and his wife belatedly admitted making false statements of truth in relation to a fraudulent £170,000 credit hire and whiplash claims arising out of a deliberate 'slam-on' road traffic accident. Mr Justice Julian Knowles imposed an immediate 12 month custodial sentence on the husband and a 9 month suspended sentence on the wife.

Mr and Mrs Kapoor had originally claimed for whiplash and credit hire charges relating to a motor accident in July 2013. By the time of trial, credit hire which had been provided by Obssas Hire and Storage was in excess of £170,000. The claim was successfully defended by DAC Beachcroft's credit hire fraud team in the Mayor's & City of London Court in June 2016 on the basis that the collision was a slam-on. The Defendant’s driver felt he had been the victim of “a scam” from the outset and gave evidence in the County Court on that basis.

As well as securing a finding of fundamental dishonesty at the original trial DAC Beachcroft also secured a non-party costs order against Obssas Hire and Storage to make them jointly and severally liable for the Defendant's costs alongside the Claimants.

After the claim was dismissed, DAC Beachcroft successfully applied for the Kapoors to face criminal charges for contempt of court.

In their initial Defence to the allegations of contempt, Mr and Mrs Kapoor sought to blame the credit hire company, Obssas Hire and Storage and their former solicitors Asons, claiming that they had simply signed various documents verified by statements of truth without reading any of them and without being aware of their contents. DAC Beachcroft represented by James Laughland of Temple Garden Chambers, successfully argued that this explanation, even if true, which was disputed, could not exonerate them from the charge of acting in contempt of court. By signing a statement of truth they were required to have an honest belief in the contents of the facts stated therein. Wilful ignorance of the contents was not acceptable. 

Two days before the final hearing, both Mr and Mrs Kapoor admitted that they had known from the outset that the collision had been deliberately induced and that all claims arising from it were fraudulent.

The matter was handled throughout by Gary Orritt, Solicitor, in the DAC Beachcroft credit hire fraud team.

What issues were raised by the Claimants?

After entering a Defence insisting that this had been a genuine accident, the Claimants each raised impassioned pleas for leniency within the skeleton arguments filed on their behalf.  They each accepted their part in the fraud but the wife, in particular, set out that she had not been as intimately involved in its preparation and set out the detrimental effect that the proceedings had had on her health.

Interestingly, the husband stated that, having been introduced to the director of the accident management company, Obssas Hire and Storage, he was informed that he could have pre-existing damage to his car repaired free of charge provided he agreed to participate in a sham accident.  The husband stated that the director selected the location, a motorway slip road, and an associate to accompany the Kapoors on the journey.  This associate was there to give the signal for the husband to apply his brakes firmly.

Mr Kapoor admitted that the credit hire, which was charged at over £170,000.00, was wholly unnecessary.  It was stated that the vehicle which was hired had belonged to the director's brother.

What is the significance of this decision for the credit hire market?

This case highlights that findings of fundamental dishonesty and contempt of court are as equally applicable to credit hire fraud cases as to personal injury driven motor fraud cases. The outcome should reassure credit hire fraud practitioners of the merit in defending suspected fraudulent cases and pursuing findings of fundamental dishonesty and contempt of court where the facts and evidence allow.

It further demonstrates the dual approach that insurers can take with criminal and costs sanctions available in certain cases, including pursuing the hire or accident management companies.

This case shows the lengths that accident management companies and their appointed solicitors may go to in order to pursue high value claims against insurers.  Insurance companies should continue to maintain effective fraud prevention strategies to detect and litigate the correct cases.  It is particularly interesting in this case that the accident was caused in dangerous circumstances on a motorway and where the individuals involved were more than willing to place in danger the lives of themselves, the insured's driver and others.