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Sentencing for insurance fraud

What is the sentence for insurance fraud in 2024?

Being involved in an insurance fraud case will typically mean that the police and the insurance company are looking to prosecute. You’ll be asked to attend the police station for an interview and without a strong defence, you’ll most likely be given a date when you will be required to attend court.

benefit fraud investigation

The courts have more recently taken a harsher stand against those who are convicted of being involved in insurance fraud. As a crime, it’s recognised that it can affect every homeowner, driver or anybody who takes out any form of insurance, those convicted are more likely to face a prison sentence than ever before.

In addition, staged road accidents can put lives at risk and dishonest claiming increases premiums of all those who take out insurance.

Insurance fraud has now taken a turn into the realms of organised crime with one recent case being part of a £3.2m ring involving 150 people in Merseyside. It’s a crime that is becoming increasingly more sophisticated.

This is a crime that comes in many different shapes and sizes. Providing inaccurate information on insurance policy documents, failing to report basic changes of circumstances such as your home address, making exaggerated claims or entirely false claims can all qualify as being part of the offence of insurance fraud.

To help you to understand what the outcome might be as a result of being convicted of insurance fraud, we’ve detailed the sentencing guidelines below.  Please note that a competent and experienced solicitor may be able to get any prison sentence reduced or even avoid it entirely.

More about insurance fraud

Estimated to cost the industry nearly £1 billion per year, increasing emphasis is being placed on thorough investigation of information disclosed on policy documents and the legitimacy of claims made.

It’s important to take the legal guidance of insurance fraud solicitors as soon as you hear that you are going to be investigated. We are also known as specialists in cash for crash.

Insurance fraud is sentenced under the same guidelines as fraud. If the crime involves more than one person, then it could be a conspiracy to defraud.

Fraudsters creating the most sophisticated scams that involve ever-increasing money and people have led the courts to take a harsher approach when it comes to sentencing those who are found to be guilty of insurance fraud. Those who are found guilty of taking part in a criminal ring will generally receive a stiffer penalty.

With as many as 125,000 dishonest insurance claims a year (according to ABI in 2016), the value of which was estimated to be £1.3 billion; these fraudulent insurance claims cost the UK economy as much as £2 billion each year.

Read more about the offence of Insurance Fraud

Have you been charged or arrested for Insurance Fraud? 

If you or somebody you care about has been charged or arrested in connection to an insurance fraud case, you’re most likely feeling very worried.

In some instances, a person will have been accused of playing a part, but in reality, they have had no involvement whatsoever. In situations like this, it’s crucial that you get your name cleared.

In one recent case where three claimants tried to fraudulently receive a payout from an insurance firm, the courts gave custodial sentences despite the claimants insisting that they were outraged by being accused of not being honest.

What type of actions are considered Insurance Fraud?

Getting an easy pay-out is at the core of all insurance fraud offences. However, couple that with the prospects of getting a custodial sentence, and it doesn’t look quite so appealing.

Historically, those who have lied in court have most often been handed a prison sentence, whereas the courts are now cracking down to discourage would-be fraudsters.

Here are some examples of insurance fraud that may have even led to the situation that you or your loved one are now in.

  • Providing inaccurate information on policy documents – for instance, you may have told an insurance company that you are a UK resident in order to benefit from a better insurance premium, but in reality, you are not. Alternatively, you have told an insurance company that you have more contents in your home than you do, knowing that you’re going to use this to your advantage by putting in a fake claim.
  • Failing to report material changes of circumstances – for example, you may have moved to a new house that is a higher risk postal code address, but you have failed to tell your car insurance company as you know the premium that you will need to pay is higher each month.
  • Making exaggerated claims or entirely false claims – an example of this might be telling your home insurance company that more was stolen from you than you possessed in reality.
  • Staging a fake burglary – to generate a payment from a person’s contents insurance.
  • Staging a car accident – this could involve several cars and would take place on a road where there may have been previous accidents.

Insurance fraud goes beyond car insurance fraud and home insurance fraud. There is also holiday insurance fraud, pet insurance fraud, valuables insurance fraud and commercial insurance fraud.

In addition, there are, of course, many other situations that can be described as insurance fraud. If you need to know more about what these are, or if you want to know if a crime that you’ve been accused of is classified as insurance fraud, you can call us on 0208 888 5225 for further information.

What is the average sentence for insurance fraud?

An insurance fraud case can lead to a prison sentence if you are found guilty and convicted. Sentences can be anything from a community service order to 6 months or more imprisonment. You may also be asked to pay a fine.

If you are found to be guilty of leading a criminal ring with the goal of getting payouts from insurance firms, you are likely to be handed a stiffer sentence.

What are some of the mitigating factors that might reduce the insurance fraud sentence?

When sentencing for insurance fraud, your case will be investigated thoroughly by the police, the insurance company and other regulatory agents.

Your case will be studied for whether you have taken part in a group activity or to see if you were forced into it. If you’ve been dishonest on your claim forms, or you have used the identity of others to access more funds, this will be considered to decide your sentence.

Certain aspects of a case are known as the mitigating aspects which can influence the sentence that a judge gives. One of the factors judges consider in every case of this nature is the defendant’s level of genuine remorse.

The following are some of the other factors considered when the court decides which sentence to give. They will look at:

  • Any previous conviction
  • Your level of remorse
  • Your level of cooperation with the investigation
  • Whether the activity you took part in was originally legitimate
  • Your reputation / good character
  • Whether you have any serious medical conditions that require long term, urgent or intensive treatment
  • Whether you have a learning disability or a mental disorder
  • Whether you are the sole or primary carer for related dependents

The following is an extract from the Sentencing Guidelines which have been devised to assist judges in deciding upon penalties.

The level of culpability is determined by weighing up all the factors of the case to determine the offender’s role and the extent to which the offending was planned and the sophistication with which it was carried out.

Culpability demonstrated by one or more of the following

A – High culpability

  • A leading role where offending is part of a group activity
  • Involvement of others through pressure, influence
  • Abuse of position of power or trust or responsibility
  • Sophisticated nature of offence/significant planning
  • Fraudulent activity conducted over sustained period of time
  • Large number of victims
  • Deliberately targeting victim on basis of vulnerability

B – Medium culpability

  • A significant role where offending is part of a group activity
  • Other cases that fall between categories A or C because:
    • Factors are present in A and C which balance each other out and/or
    • The offender’s culpability falls between the factors as described in A and C

C – Lesser culpability

  • Involved through coercion, intimidation or exploitation
  • Not motivated by personal gain
  • Peripheral role in organised fraud
  • Opportunistic ‘one-off’ offence; very little or no planning
  • Limited awareness or understanding of the extent of fraudulent activity

Where there are characteristics present which fall under different levels of culpability, the court should balance these characteristics to reach a fair assessment of the offender’s culpability.

Is it possible to reduce a sentence for insurance fraud with a guilty plea?

In recent years, a number of changes have been made to the sentencing system in the UK to save the court time and cost and to protect witnesses from the stress of needlessly going through a trial. For offenders aged 18 and over, pleading guilty early on in a case can reduce a sentence by as much as one third (maximum). The later the plea is entered, the smaller the reduction.

‘Early on’ refers to ‘the first stage of the proceedings’ and means anytime up to and including the first hearing at the Magistrates Court or Crown Court for indictable offences.

If a plea is entered 14 days after the first hearing, for example, the maximum level of reduction is just 20% or one fifth of the sentence. For indictable offences, the limit for a guilty plea to be made is within 28 days after the prosecutor has stated compliance with section 3 of CPIA 1996 and serving disclosure; although the decision is ultimately in the hands of the Judge who has discretion to apply whatever credit is deemed appropriate.

After these times there is a sliding scale of credit applied. This goes down to one tenth on the first day of the trial and to zero if entered during the course of the trial. In theory, the ten percent could be given if the plea is issued after the opening speeches on the first day, but prior to any witness evidence being heard.

If the accused does not want to plead guilty, then it’s important for the solicitor to regularly inform the court throughout the trial of the reasons why the client’s plea is not guilty.

What are some of the other consequences of an insurance fraud offence?

Ancillary Orders

A court can also make ancillary orders on a defendant if they are found guilty and convicted of an insurance fraud offence. These are extra elements of punishment that can be added to a sentence and include additional restrictions or even requirements that can affect a dependent’s finances, your property or business or financial activity.

Ancillary orders that are typically added to the penalty for those who are found to be guilty of insurance fraud include:

  • Compensation for loss
  • Restraint orders
  • Reparation orders
  • Financial reporting order
  • Disqualification from directing a company
  • Confiscation orders

As part of your investigation, you may also have your assets frozen with the possibility of having cash or other assets seized.

In addition, the court may demand payment of the following if the accused is convicted:

Payment of costs applied for by the prosecutors

Although the police meet some of the costs involved in the prosecution, the costs of investigation are typically sought from the convicted. These may include the costs of:

  • The work done in obtaining sufficient evidence for prosecution either at the initial stage or later at the request of Crown Prosecution Service (CPS)
  • Seeking medical or expert evidence as part of the investigation, (where a witness is required to attend Court, the cost of the attendance falls on the CPS).
  • Re-interviewing witnesses
  • The entire costs of the prosecutor, including fees for the use of external Barristers used by the CPS, can be recovered from the defendant, subject to means. At the end of the case, the prosecutor under The Prosecution of Offences Act 1985 will request the Judge to order a sum to be paid for the costs incurred by the prosecutor in bringing the prosecution.

Victims surcharges

The term victims’ surcharges can be explained as paying compensation to a fund for victims and can range between £20 to £170 depending on what sentence you were given at conviction.

Rehabilitation Period
(the time it takes for the sentence to become ‘spent’)
Sentence Adult (aged 18+) at time of conviction Young person (aged under 18) at time of conviction
Prison sentences of more than 4 years Sentence is never spent Sentence is never spent
Prison sentences of more than 2.5 years (30 months) but less than 4 years Sentence length 7 years Sentence length 3.5 years
Prison sentences of more than 6 months but less than 2.5 years (30 months) Sentence length +4 years Sentence length +2 years
Prison sentences of less than 6 months Sentence length + 2 years Sentence length +18 months
Conditional Discharge Length of order Length of order
Absolute Discharge None None
Conditional Caution 3 months 3 months
Simple Caution / Youth Caution None – immediately ‘spent’ None – immediately ‘spent’
Other Including Compensation Order, Supervision Order, Bind Over, Hospital Order Length of the order / once compensation is paid Length of the order / once compensation is paid

Can sentences be added to national information databases?

There are several national databases that hold information about individuals and any allegations made about them, their criminal and court records. These include the DBS (Disclosure and Barring Service) which was previously known as the CRB (Criminal Record Bureau) and the Police National Computer (PNC).  Depending on what happened, whether the accused is convicted and what sentence was issued, the accused may be added to one or all these databases. Their purpose is to provide information to potential employers and to regulate the ability to take part in certain activities.

If your case progresses to court and you are convicted of insurance fraud, your conviction will be noted on your CRB / police record. The period of the endorsement will depend on the nature and length of your sentence.

Below are details on how long you will be listed as holding a criminal record if convicted. This is something very serious to consider when it comes to future employment. The term ‘spent’ refers to when your name can be removed from the databases.

How Can Stuart Miller Solicitors Help?

The Fraud Lawyers at Stuart Miller Solicitors have recognised success in defending Insurance Fraud Cases. Our Fraud Cases section will demonstrate the recent achievements we have had in ‘Cash for Crash’ cases.

The phenomenal complexity of the small print in policy documents together with heavily trained investigation teams pursuing you, require you to have the shield of expert Fraud Solicitors on your side. Whether you are a business owner with professional indemnity insurance, employer’s liability insurance, landlord insurance or occupier’s liability insurance; or you are an individual with motor insurance, household insurance, travel insurance or life insurance; Stuart Miller Solicitors’ leading Fraud Lawyers have the expertise and skill to mount the best possible defence for you.

Recent trends for Insurance Fraud prosecutions

Payment Protection Insurance (PPI) Fraud and Motor Insurance Fraud (Cash for Crash) in particular, have come under thunderous scrutiny recently. In many cases, innocent and legitimate persons running companies or lodging rightful claims have suffered investigations, leading to unsuccessful prosecutions. Insurers are treating the most minor of signs as suspicious and refusing to settle claims, choosing instead to report matters for prosecution.

Stuart Miller Solicitors have successfully defended those accused of running accident management companies and arranging staged accidents, or those alleged to be drivers and passengers of staged accidents. Our understanding of these prosecutions is vast and our ability to identify flaws in the prosecution case is second to none. See our Notable Cases for further details of our achievements.

What should you do if you are arrested for Insurance Fraud?

If the police ask you to accompany them to the police station for a chat or they arrest you with the charge of insurance fraud, it’s essential that you take steps to legally protect yourself.

The police are trained in interviewing techniques, which can lead to you incriminating yourself. They may have evidence against you that they are not sharing with you. By taking a competent lawyer with expertise in insurance fraud with you, you can expect to be guided and educated on how you can get the best possible outcome.

Under no circumstances should you attend the police station or take part in any communication with the police without being accompanied by a legal professional.

Engaging the services of an experienced lawyer will also mean that you gain access to a set of highly qualified expert witnesses. These expert witnesses have expertise and experience at studying the technical side of matters. Your smartphone may be accessed to support your claim. Expert witnesses can also be health experts, doctors, experts in car crashes and more.

Lawyers will often ask expert witnesses to get involved in a case so that they can build a good defence for you and use professional judgement to back up their strategy.

As soon as you hear that you are to be investigated for insurance fraud, it’s imperative that you get in touch with an experienced and competent lawyer who has knowledge of the insurance fraud area of law.

Would you like to discuss your case before instructing us?

If you’d like to have a no-obligation chat with us before you instruct us to take your case, then call us today. We are here to help, no matter what questions or needs you may have.

In addition to giving you a free consultation, we can also represent you at the police station if you’ve been arrested. We can look at securing your legal aid.

Please Contact Us and ask to speak to our insurance fraud solicitors or fraud lawyers to arrange a meeting in person, online or by telephone. If you prefer, you can WhatsApp us from the link you will find at the bottom banner if you open this page on your mobile phone device.

Get in touch with us now for possession of insurance fraud legal help.


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