Ill-gotten gains

When it comes to screening fraudulent insurance claims, the personal injury lawyer is best placed to spot vital inconsistencies, says Mark Burton

The personal injury (PI) market is often portrayed as being polarised between claimant lawyers representing the victim and defendant lawyers representing the insurer. One area of common interest to both, however, is in screening fraudulent claims.

The annual cost of insurance fraud is estimated to be in the region of £650m. Detecting and proving fraud can be particularly problematic in the case of the malingerer – the PI claimant who deliberately fabricates or exaggerates his symptoms to increase his damages.

The malingerer may model symptoms on those displayed by himself or a friend in a compensation claim that has already been successful, or, in extreme cases, may even have been coached on beating the compensation system by an unscrupulous adviser or by studying articles on the internet.

Once the malingerer is in the system, there is a natural tendency for the treating clinician to give him the benefit of the doubt. To a large extent, he is guided by his patient’s account of the symptoms, and a 10-minute appointment provides limited opportunity to detect inconsistencies compared with the more thorough investigation undertaken at a later date by a medico-legal expert reviewing the case with access to a wider range of materials.

In practice, the most common example is the apparently minor neck or back strain that deteriorates to produce grossly disabling symptoms that defy medical explanation. Radiological investigations will show no adverse pathology and the GP will often make a referral to a pain clinic, which in turn can perpetuate the sick role and hinder early resolution of the PI claim.

Examining the medical reportsThe malingering indicators may not be explicit and the PI lawyer frequently has to read between the lines and look for clues in the medical reports: clues such as inconsistencies in the examination or euphemisms used by the examining experts.

The malingerer will often complain of a limited range of movement, while having normal muscle tone in the affected areas. He will climb onto the examination couch or undress for examination without apparent discomfort or restriction, or will be observed by the examining expert discarding his walking stick after leaving the examination room.

Phrases in a medical report such as ‘inappropriate signs’ or ‘non-organic symptoms’ should automatically ring alarm bells for the PI lawyer.

The medical expert should, as a matter of course, and certainly where there are already some grounds for suspicion, be instructed to employ specialist examination techniques to investigate the reliability of the claimant’s presentation thoroughly.

The most well known, which is consequently vulnerable to coaching, is Waddell’s testing for lower back pain, where adverse responses to three out of five standard techniques is an indicator for further investigation. In the ‘simulation’ category, for example, the medical expert either presses down on the head while the claimant is standing, or rotates the pelvis on the hips. The malingerer will report lower back pain when, anatomically, there should be none.

A forensic review of the claimant’s medical history is every bit as important as the clinical examination. The malingerer may exhibit one or more of the following traits: an apparent reluctance to seek treatment or a failure to attend appointments, even though gross disability is alleged; excessive ‘neediness’; complaints against the treating clinicians; and over-zealous attempts by the claimant to correct perceived inaccuracies in the medical notes. The medical notes might equally contain references to previous compensation claims, be incomplete or not be provided at all.

If there seems to be no physical basis for the claimant’s symptoms, it is usually necessary to involve a psychiatrist to distinguish whether the claimant is deliberately fabricating or exaggerating symptoms for financial gain or alternatively is acting subconsciously by operation of a genuine disorder such as Munchausen’s, where the patient fakes symptoms for attention and will even submit to invasive medical procedures including surgery, or hypochondriasis, when he has a delusion of ill health.

Assimilating supportive evidenceDetecting the malingerer is only half the battle. Proving what, in effect, amounts to insurance fraud requires careful assimilation of supportive evidence from a wide variety of sources. It is a common misconception that the examining medical expert alone will determine the malingering issue.

Because malingering is not a medical diagnosis, the odds are weighted in the claimant’s favour: the medical profession can only contribute to the detection of malingering by excluding a genuine disorder, but this can require a costly and time-consuming sequence of investigations by a multi-disciplinary team. The most effective means of testing the suspected malingerer remains the careful use of surveillance evidence, preferably obtained on more than one occasion.

It is unusual for the PI lawyer to face limitations in the medical evidence that is ordinarily pivotal in explaining symptoms. The genesis of malingering may be societal not medical: everyday examples of this are the schoolchild who pretends to have a cold to miss a test and the sit-com wife who feigns a headache at bedtime.

The societal repercussions extend beyond the PI claim and, in cases of sickness absence, can directly affect employers and/or the welfare state. Where the malingerer is in receipt of state benefits, the defendant lawyer has to challenge the benefits entitlement retrospectively, otherwise the insurer faces recoupment of the full amount when the claim is compromised, even if the amount of damages corresponds to a trivial injury not triggering any benefits entitlement.

The combined costs of procedural steps, which could include multi-disciplinary medical reports, a campaign of surveillance and a review or appeal of benefits, are frequently disproportionate to the amount eventually recovered in damages, which is contrary to the spirit of costs control embedded in the Civil Procedure Rules.

Since it would otherwise be difficult for defendants to protect against such costs in circumstances where valuation of the claim is contingent on the outcome of future investigations, the courts may exercise their discretion on costs to penalise the malingerer.

In Painting v University of Oxford (2005), the claimant claimed more than £400,000. After surveillance evidence had been obtained, the defendant reduced its payment into court to £10,000. The claimant was awarded £23,000 and beat the payment into court. However, in light of the reduction in damages, the defendant was viewed as the overall winning party and was entitled to its costs from the date of the payment into court.

On the one hand, a proportion of suspected malingerers will in fact be acting subconsciously by operation of a genuine medical disorder. On the other hand, the PI lawyer will inevitably encounter a category of claimants whose claim includes features that require further investigation before the extent of genuine symptoms can be identified and corresponding damages agreed and paid.

In practical terms, the PI lawyer is in a strong position to spot inconsistencies hidden among the totality of the evidence and, in the context of the compensation system, has a key role to play in screening fraudulent claims. nMark Burton is head of the London casualty department at DLA Piper