Insurance Fraud Bureau and City of London case collapses
BCR Legal Group, a London based insurance intermediary specialising in after the event legal expenses, has been vindicated after a fraud trial against some fourteen defendants, including doctors and solicitors collapsed in disarray.
The case, originating from 2008, involved a joint investigation codenamed Operation Triassic, was conducted by the Insurance Fraud Bureau (IFB) and the City of London Police (COLP) into alleged organised insurance fraud in relation to personal injury litigation by professionals. The CPS failed to present any evidence of any wrong-doing and though having been told many times before finally admitted that the behaviour originally complained of, was normal industry practice. His Honour Judge Higgins, at Southwark Crown Court, described the prosecution as ‘scandalous’.
The defendants included Frank Harrold, former director of BCR Legal Group and Brian Barso, former director of McKeowns Solicitors. The IFB and the COLP initiated a scathing attack on BCR and McKeowns in early 2009 bringing both companies to their knees.
Defendant insurers used the criminal proceedings as a way of avoiding litigation costs in civil claims. The investigation wrongly caused the FSA to withdraw BCR’s permissions in March 2009 but these were restored by the FSA on successful appeal in July 2009.
This misguided action by the IFB and COLP will cost the taxpayers millions and raises serious questions about the competence and independence of both organisations. It raises very serious questions about the Government’s decision to allow the insurance industry to fund 35 detectives and support staff in the COLP from January 2012.
Ian Lewis, fraud partner at Lewis Hymanson Small, said:
“Despite repeated requests to be provided with details of the complaints the CPS and the COLP failed to do so, raising speculation that this was an investigation led by the insurance industry with a suspicion of an agenda to continue the civil cost wars in the criminal courts.
“This investigation has cost BCR millions in terms of loss of business and damage to their professional reputation. Despite regular requests we have never been shown any evidence of criminality. Rumours still circulate of fraud and bogus insurance policies yet the CPS has admitted to having no evidence of this. If those responsible for this prosecution had considered the allegations of criminality at the beginning of the case none of this would have happened.”
Mike Stubbs, partner of Mishcon de Reya, said:
"We acted for BCR in successfully overturning the FSA's withdrawal of their permissions. The actions of the IFB and the COLP caused significant financial and reputational damage to BCR, forcing them into administration. I never had any doubt that the appeal would succeed as BCR conducted their business in an honest and ethical manner. I have never understaod why the COLP and the CPS continued with their case for a further two years after the FSA had cleared BCR.”
Blake Weltman, managing director at BCR Legal Group, said:
“This case puts into perspective the dangerous repercussions of biased investigations. The COLP and the CPS took their lead from the IFB and the insurance industry. At the outset documents seized by the COLP under search warrant and were passed to the IFB and to BCR’s commercial enemies. Yet three years later the CPS admitted there was simply no case. Such abuse of process is a great concern to all of us. I am extremely proud that despite this unfair onslaught from the IFB and the COLP, BCR has survived, and continues to provide an excellent service to our growing client base.”
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Rachael Richards - 0161 927 3131