Wednesday, 7 March 2012

Out of focus over Autofocus

The Autofocus story is remarkable – and salutary. For the best part of a decade the motoring consultancy was riding high, retained by insurance companies to challenge the cost of replacement hire cars for accident and crash victims. Then, in 2010, the Autofocus bubble burst. The business collapsed, going into administration in the wake of serious claims about serial wrongdoing.

It was alleged that reports produced by Autofocus were skewed in favour of insurers. The company’s ‘rate surveyors’, whose task it was to compare hire rates to assess whether a specific charge was fair and reasonable, are said to have routinely fabricated and manipulated their reports.

The reports were used successfully in more than 4,000 contested court cases, and also formed the basis for thousands of out-of-court settlements. But now, less than two years after the demise as a going concern of Autofocus, the Attorney-General has reportedly referred the matter to the Crown Prosecution Service. According to a piece in The Times this week, it is now expected that the City of London Police’s fraud unit will be notified of the case – and that fraud charges may well ensue.

A case of contempt?

That’s not all. It transpires that the Attorney General’s office is also considering charges of contempt of court against seven former Autofocus staff. No wonder, then, that Lord Justice Moses announced that he was “flabbergasted” by the allegations, which, if proven, he said represented “industrial-scale perjury” and a “serious conspiracy”.

His Lordship is absolutely right. There are indications that the alleged corruption at Autofocus may have been on an industrial scale and that it involved numerous industry players from nearly every facet of the motor accident system. If true, the case would be indicative of the widespread and systemic moral decay which has been facilitated by the departure from the professional principles articulated by Lord Benson and a perpetual drive towards profit to the detriment of everyone else – including consumers and those involved in accidents.

What, though, can be done? How do we right the wrongs that proliferate in the motor accident system?

LASPO doesn’t go far enough

A glance at the Legal Aid Sentencing and Punishment of Offenders Bill (LASPO), which is currently wending its way to legislative approval, reveals that it offers little in the way of regulation or control of ancillary services in the personal injury sector. Autofocus, of course, was an example of one such ancillary service, and a great many of them have sprung up. The worrying fact is, therefore, that Autofocus represents the tip of the iceberg in relation to unethical and even illegal practices, precisely because it, like all the others, is unregulated. A robust but fair and appropriate regulatory authority which adopts a practical approach, backed by legislation designed to close the various loopholes which are exploited by these companies, is needed to improve the current system. LASPO needs to be rethought with this in mind.

Another example of systemic failure is the unregulated insurer practice of ‘third party capture’ which seeks to settle claims directly with motor accident victims without any mandatory protection for the motorist around their access to independent legal advice. This is another example of the dysfunction in the motor accident system. There is strong circumstantial evidence that this has led to claims being made which would never have been brought had the insurers not made an unsolicited offer.

To return to Autofocus, we should recall that among the insurance companies relying upon its reports are household names. There is no suggestion that they colluded with Autofocus, and we should recall that Autofocus has yet to put its side of the story. But nevertheless, whatever the truth of the Autofocus allegations, the clamour for holistic change rather than a piecemeal approach to the ills of the motor accident system is deafening. We ignore it at our peril. 

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