How do Insurers investigate claims

Compensation Insurance

Important issues in personal injury claims will frequently hinge on evaluation of a claimant’s credibility and there are various tools available to insurers to identify any inconsistencies between allegations and fact. The key tools available to Insurers are subpoenae to produce documents, surveillance, independent medical examinations and cross-examination. Attacks on credibility can be defended by lawyers but are best guarded against by claimants being truthful in the conduct of their claims.

Any claim within the jurisdiction of the courts is likely to invoke the use of subpoenae – on, for example, employers and doctors – for the purpose of bringing to light the true circumstances surrounding a claimant’s earnings, medical history, contemporaneity of complaints and so on. An experienced lawyer will advise their client of this possibility at the commencement of proceedings. This article will look at the level of threat and effectiveness of defending attacks on credibility.

Surveillance

Surveillance evidence can be the most cutting tactic used by insurers to devalue a claim. Naturally, obtaining proof of a claimant’s residual or post injury abilities, if kept in context, can be compelling evidence. Once obtained, the insurer can maximise the weight of that evidence by admitting it without notice to the claimant when it has the best chance of contrasting with the claimant’s allegations.

The Uniform Civil Procedure Rules do provide that surveillance to be relied on must be served on the other party to proceedings at least 7 days before the commencement of a hearing. The UCPR goes on to state that a party who fails to comply with that provision ‘may not tender the plan, photograph, audio-visual recording or model in evidence except … by leave of the court’.[1]

Clearly, the rule permits a judge to exercise his or her discretion in permitting the evidence admissible. Mid-hearing, it would be a matter for counsel for the claimant to argue that the prejudice to the claimant outweighs the probative value of the footage.[2] The insurer’s typical reaction to this argument is that the claimant’s initial reaction to surveillance footage holds greater value than a prepared reaction.

It should be noted that we can expect an increase in the service of evidence collected from social media sites. There is limited Australian case law on this issue presently but what little case law does exist indicates that similar rules apply as with surveillance footage with the added requirement that the authenticity of the site must be established.[3]

[1] Uniform Civil Procedure Rules 2005 (NSW) r 31.10.

[2] Evidence Act 1995 (Cth) s 135.

[3] Flo Rida v Mothership Music Pty Ltd [2013] NSWCA 268; Condon-Nixon v Rivers [2012] FamCA.

In Azar v Kathirgamalingan [2011] NSWDC 56, the insurer took thorough steps to attempt to have surveillance video admitted into evidence at the hearing and not prior. That case involved a claim for psychiatric injury. The insurer brought a Notice of Motion disclosing the existence of surveillance video but not disclosing its contents. It sought the following:

  • leave be granted under Rule 31.10(2) of the UCPR to show the surveillance evidence to the plaintiff in cross examination and to use and tender it at the hearing;
  • the defendant be excused from compliance with Rule 31.10(1) in respect of the surveillance evidence; and
  • the defendant have leave to show the film to his experts and not be required to serve supplementary reports dealing with the film until after cross examination.

Truss DCJ applied the precedent principle that ‘[t]he reasonable entitlement of a defendant to preserve pre-trial confidentiality and the results of its investigations, in the face of suspected fraud, remains a legitimate interest[1] and permitted the future admissibility of the footage without prior service on the claimant. Her Honour, with reference to Section 58 of the Civil Procedure Act 2005 (NSW), did not, however, permit the admissibility of supplementary experts’ reports commenting on that footage on the basis that this would unfairly disadvantage the plaintiff.

This course permitting admissibility of footage without prior inspection was again adopted in Josephine Williams v Lansdowne Partners Pty Ltd t/as 202 Broadway [2013] NSWDC 154, [129]. That case involved issues of credit regarding the level of disuse of the claimant’s left hand as a result of physical injuries sustained in a slip and fall.

These judgments of the District Court may not hold much weight in terms of precedent, but certainly indicate that, in light of the Court’s inclination to take issues of credibility seriously, the only sure way of guarding against unwanted surveillance footage is for neither claimant nor lawyer to overemphasise an injured person’s disabilities.

Medical Assessment

On 5 July 2016 a decision was handed down by the Court of Appeal in the matter of Insurance Australia Ltd t/as NRMA Insurance v Milton [2016] NSWCA 156. This case principally dealt with a claimant’s eligibility under the Lifetime Care and Support Scheme. The claimant had an interest in being found ineligible and the insurer appealed the decision of the Review Panel that he was so. The insurer submitted that three of the criteria used by the Panel to determine the claimant’s eligibility (self-care, communication and social cognition) were determined largely on the history the plaintiff provided and that as a consequence, the Panel ought to have made determinations as to the claimant’s credibility alongside its decision.

Of relevance was the fact that the claimant had an interest in being found ineligible for participation in the Scheme and there appeared to have been an improvement in the claimant’s condition prior to the assessment. In brief, the Court of Appeal repeated precedent and concluded that ‘the obligation of the Review Panel was to give reasons for its own findings; it was not required to explain why it did not accept findings made by others’.[2]

In this way claimants were given some protection by the courts in circumstances where it serves no purpose to question a claimant’s medical history if there can be no objective evidence capable of supporting or disputing that history.

Cross-Examination

A less recent decision, in Allianz Australia Insurance Ltd v Harrison [2013] NSWSC 1186, addressed the extent to which an insurer is permitted to rely on elements of a claim which are withdrawn.

Prior to her CARS Assessment Conference, the claimant withdrew her claims for economic loss and past commercial care, the inference being that no documentation or witnesses in support of these claims existed. During the Assessment Conference the insurer was precluded from asking questions of the claimant about the abandoned claim but was permitted to make submissions on the claimant’s credibility based on the above inference. The insurer appealed the award on the basis that it was denied procedural fairness.

Hoeben J held that the insurer’s line of questioning was, if desired, a necessary facet of the insurer’s ability to present its case fairly.[3]

Conclusion

These illustrations demonstrate that, depending on the circumstances and the balance of probability and prejudice, issues regarding the protection of a claimant’s credibility can easily be decided in both ways. The interests of injured persons are always best protected by presentation of symptoms and relevant histories in a transparent fashion.

[1] Halpin and Ors v Lumley General Insurance Ltd [2009] NSWCA 372, [317].

[2] Insurance Australia Ltd t/as NRMA Insurance v Milton [2016] NSWCA 156, [53]; Wingfoot Australia Partners Pty Ltd v Kocak [2013] HCA 43.

[3] Zurich Australia Insurance Ltd v Motor Accidents Authority of New South Wales and Ors [2010] NSWSC 214.