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Claims and Coverage: Lawyers key in fight against motor vehicle insurance fraud

In a shocking criminal trial earlier this year, the Ontario Superior Court found a Peel police officer guilty of creating nine false motor vehicle accident reports for a fee (see R. v. Watson).

These accidents never happened. A tow-truck driver, who was a childhood friend of the officer, hired people to claim themselves as vehicle occupants who then put forward fraudulent insurance claims with cars brought to a secluded yard at night and crashed together to create damage. All told, insurers paid out almost $916,000 to the fraudsters and $272,000 in medical and legal expenses.

Last month, the court sentenced the offending officer to five years in jail for his part in the scheme.

Fraud also often takes the form of induced collisions involving innocent motorists. The Insurance Bureau of Canada’s investigative services team describes several typical scenarios. A swoop and squat involves the scammer pulling a vehicle in front of another car and slamming on the brakes to ensure the driver behind doesn’t have time to stop. A drive down takes place in a parking lot when a fraudster waves another vehicle to back out of a parking spot and then intentionally drives into it. In a left-turn bullet, an innocent driver is waiting to make a left-hand turn. The scammer approaches, waves at the driver to go ahead, and then intentionally drives into the vehicle. The innocent left-turning driver takes the blame.

The concern is that organized crime rings run much of motor vehicle accident insurance fraud. These rings may involve medical clinics, rehabilitation centres, paralegals, and practitioners such as chiropractors and massage therapists who bill insurers for treatment they never actually rendered.

“Organized crime, unfortunately, is very creative,” says Rick Dubin, vice president of the Insurance Bureau of Canada’s investigations unit.

“They keep changing their approach over time. But insurers are also getting better at fighting fraud. With the recent passing of Bill S-4, an amendment to the Personal Information Protection and Electronic Documents Act, insurance investigators can share information with other insurers if they have reasonable grounds to believe that there is fraud. Luckily, we have some effective new tools at our disposal.”

Three massive crime rings have emerged in the Greater Toronto Area in the past few years, each involving dozens of people. According to Dubin, certain people involved in a massive New York auto fraud crime ring may have entered Ontario and are suspected of links to several Toronto-area rehabilitation clinics.

Ben Kosic, chief executive officer of Canadian National Insurance Crimes Services, is no stranger to the tension between privacy concerns and fighting crime. His company is a relatively new data analytics business currently used by nine insurance companies making up about 75 per cent of Ontario’s market.

The company’s database takes claims information and then uses algorithms or rules to detect indicators of fraud with an alert sent to the insurer. The system doesn’t share personal information but instead uses a black box. Revisions to Ontario insurance claims forms provide for consent to this type of information sharing between insurers.

“Most people would probably consent to their claims information being shared if it leads to a reduction in fraud and, therefore, lower insurance premiums,” says Kosic.

“Currently, Ontario insurers could be losing up to an estimated $1.6 billion per year to auto insurance fraud and some believe that it’s even more.”

Lawyers and claims adjusters should watch for red flags denoting a possible fraudulent or induced crash.

A full vehicle may be a giveaway, especially if all occupants claim soft-tissue injuries. A vehicle containing occupants who have little to no connection to one another is another possible indicator of fraud.

Donald Dacquisto, a lawyer with Zuber & Co. LLP, says that if a defence lawyer finds a file to be suspicious, it will be important to question the circumstances. “They will obviously need to conduct a thorough examination for discovery on the issues surrounding the incident, even in a rear-end-type collision. The story of how the vehicle occupants came to be riding together and their personal relationships may prove to be implausible on careful examination. Even still, significant credibility issues are not sufficient to establish a staged accident, and we have to tread very carefully as lawyers with such assertions, as do the insurance adjusters, which makes it challenging.”

Canada might look to England for inspiration in the continuing fight against fraud. England has an Insurance Fraud Bureau devoted exclusively to investigations and enforcement. Its 2015 manifesto indicates that the fight against fraud begins at the front end with brokers. “The [bureau] is committed to supporting the counter-fraud capabilities of brokers. The most powerful weapon in the fight against insurance fraud is sharing information,” says director Ben Fletcher.

An indication of how seriously England treats insurance fraud is the recent case of a Gap model and football player who went to jail for two months for lying about her injuries. She filed a claim for whiplash, but investigators obtained photos of her skydiving and working out. She also posted announcements of her upcoming football matches and photos of herself riding a mechanical bull.

In Canada, the courts don’t often hand out jail sentences in these types of cases. As a result, it falls to defence lawyers to force the plaintiff all the way to trial. Such claimants often just disappear.

It’s important to get the message out that we must be vigilant. The more we discourage insurance fraud, the more we help to clear the way for genuine claimants with real injuries.

Chella Turnbull, a lawyer practising personal injury litigation at Zuber & Co. LLP, is available at 416-646-3129 or

  • partisan/unqualified experts

    Brian Francis
    Below is an excerpt from a recent Toronto Sun column about Ontario auto insurance injury litigation. Again I ask: Where does the rogue/bogus"expert" problem fit into all the industry's fraud talk?

    “Sending claimants for multiple and expensive assessments to pro-insurer experts is a major contributor to insurers’ costs and takes “real dollars” out of the pockets of claimants. That’s not to say lawyers are free of blame.There’s a long history of lawyers neglecting to act diligently to expose insurer experts who file partisan reports, sometimes outside their sphere of expertise, used by insurers to delay and deny claims...And if the insurance industry wants to point fingers at personal injury lawyers, perhaps they ought to make complete disclosure of the money they spend on defence lawyers and adjusters to deny, delay and defend claims.” (
  • Associate Lawyer

    Chella Turnbull
    If you read all the way to the end of the article, you will see that the goal of fighting fraud, is to "clear the way for genuine claimants with real injuries". Nobody disputes that there are real injuries and truthful claimants.
  • real injuries

    brian francis
    You beg the question:
    Why do auto insurers and their defence lawyers so frequently deploy (fraudulently?) unqualified medico-legal “experts" in order to wrongfully paint “truthful claimants” with “real injuries” as malingering, opportunistic fraudsters?
  • Partner

    Mark Harrington
    Look at the above responses. They don't address the issues just talk about how bad insurance companies are. I am getting tired of their same old party lines. Stand up and admit fraud is a serious issue and stop trying to deflect.
  • deflection

    brian francis
    Of course fraud is a serious problem. Nobody is denying insurers face fraud. But so too do Ontario's injured auto accident claimants. That insurer defence lawyers are happy to hire completely unqualified ‘experts” to write wrongful accusations of fraudulent malingering is also a serious problem. One you should stop trying to deflect. The Shah debacle comes to mind. Nearly 1,000 claimants assessed by a psychologist who was completely unqualified to do assessments in brain injury cases. When a brain injured subject of one of Shah's predicable accusations of malingering complained - Shah retired from the profession of psychology rather than face a discipline hearing. How is it possible that so many insurer defence lawyers hired an unqualified "expert" without ever bothering to confirm his qualifications with his licencing body? Isn't using unqualified, bogus accusations of malingering to deny policy benefits a form of fraud? If not - it ought to be. Stop trying to deflect this problem.
  • Discouraging insurance fraud

    FAIR Association
    According to the Auditor General in 2011 about half of all claimants end up in court to collect what they paid for. No one supports fraud but perversely insurers seem to be exempt from the examination of their own shady practice of deflating injuries through highly questionable medical examinations. With over 61,000 auto insurance related cases clogging up Ontario's courts and an additional 25-35,000 cases on the docket at FSCO its clear that the fight on fraud is a one way street with insurers running over victims. The lack of accountability for insurers is hurting us all because when insurers don't pay, the taxpayer does. As is done in England, our justice system is being used as a tool for insurers to deny claims at an alarming and unacceptable rate. That's what we've been reduced to -our justice system is now a club to beat up victims with so insurers can skate away from their responsibility to back up the contract of coverage.
  • the flip side of fraud

    Brian Francis
    RE: “ if a defense lawyer finds a file to be suspicious, it will be important to question the circumstances”.

    Yes, auto insurers face fraud. In Ontario, we are often told that injury claimants who exaggerate their symptoms so as to inflate the value of their claims are committing opportunistic fraud – which won’t be tolerated. But what about when insurance defense lawyers deploy “hired gun” assessors (eg. Guerrero v. Fukuda, 2008 CanLII 49158 (ON SC) who can be counted on to (wrongfully) allege symptom exaggeration? If it is fraud to fake or exaggerate injuries in an effort to inflate the value of an injury claim – is it also fraud to make false accusations of symptom exaggeration in an effort to deflate the value of legitimate, often serious, injury claims? Master Short once asked in a motion decision (Bakalenikov v. Semkiw, 2010 ONSC 4928) if these partisan assessors will ever “change their stripes”. Is “opportunistic auto insurance fraud” in Ontario a two-way street?
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