The Merriam-Webster dictionary defines malingering as: “to pretend or exaggerate incapacity or illness.”
It is lamentable that nowadays, in South Africa, a significant number of claimants’ resort to malingering and dramatically overstating the nature of their injuries or loss in order to reap unjustified settlements from insurers, the Road Accident Fund (RAF) and generally any defendant with means. Malingering or overstating the nature of your loss, is dishonest and fraudulent.
Regrettably, claimants do not operate unilaterally in this respect. Unscrupulous legal representatives and medico-legal experts act in concert with such claimants, to bring about a fraudulent claim or unjustifiably overinflate the claim. It is not uncommon that claimants will suffer the most trivial of injuries and submit claims for millions of Rands. Attempts to settle exaggerated or spurious claims, only serves to embolden swindlers. The question is then why the insurance industry and professional regulatory bodies are turning a blind eye to this alarming trend?
Spurious and frivolous claims
There is a very fine line between seeking the best possible settlement, based on true facts, and misrepresenting the nature and impact of injuries.
Fanciful and exaggerated claims, used to be the domain of the United States of America, where one would often read of ridiculous sums of money being claimed for trivial or self-inflicted ‘wrongs’.
In 1992, 79-year-old Stella Liebeck bought a cup of coffee at a McDonald's drive-thru, in Albuquerque, and spilled it on her lap. She sued McDonald's and a jury awarded her nearly $3 million in punitive damages for the burns she suffered.
In 2005, in Pearson versus Chung, Roy Pearson, a Washington D.C. judge, sued a dry-cleaning business for $67 million for allegedly losing a pair of his pants. This case has been cited as an example of frivolous litigation. According to Pearson, the dry cleaners lost his pants (which he brought in for a $10.50 alteration) and refused his demands for a large refund. Pearson believed that a sign saying "Satisfaction Guaranteed" in the window of the shop legally entitled him to a refund for the cost of the pants, estimated at $1 000. The $54 million total also included $2.0 million in "mental distress" and $15 000, which he estimated to be the cost of renting a car every weekend to go to another dry cleaner. The court ultimately ruled against Pearson, whose judgeship was subsequently not renewed, due to this case and several other actions he filed during his divorce, which were found to demonstrate a lack of "judicial temperament".
Readers would be surprised to learn just how many spurious and frivolous claims insurers receive, ranging from a vegan having mistakenly eaten meat to an expelled university student claiming loss of income for the balance of his life. The damages being claimed, in both these cases, are preposterous since it is not supported factually, legally or by any expert. In matters where the claimant is potentially delirious, is the claim advanced fraudulent?
The above examples are obvious and easy to discount. The more noxious claims are your everyday slip and trips or personal injury claims that are, as a general practice, over inflated by anything from 200 – 1000%. The claimants malinger and deliver Oscar worthy performances, often supported by experts that, rather than applying professional skepticism – form their opinions on baseless conjecture, unsupported by facts and the old adage of “he who pays the piper calls the tune”.
Misrepresenting injuries
The High Court recently had cause to express its disquietude and directed censure at various legal representatives and medical experts, for their chicanery in attempting to inflate a personal injury claim. In the matter of MT versus RAF [2020] ZAGPJHC 286, the plaintiff being an office assistant making tea and coffee sustained orthopaedic injuries, which had by all accounts healed without any serious long-term adverse outcome. The plaintiff was 45 years old, at the time of the accident, and earned a monthly salary of R 5 500. The plaintiff resigned from her employment and claimed she had been retrenched. The medical evidence showed that she was still capable of working, and that her injuries were not serious, and she therefore did not qualify for general damages.
Notwithstanding these facts, the plaintiff, her legal representatives and experts, sought to obtain a settlement of over R3 million. Oblivious to the truth or complicit, the RAF agreed to the settlement amount. It was only due to the Court’s oversight, that this settlement was never officially approved.
The Court found issue with the fact that the settlement amount was vastly overstated, on account of the fact that the legal representatives had been less than economical with the truth in relaying the purported deleterious effects of the plaintiff’s injuries.
The plaintiff for her part, malingered on more than one occasion, making her one leg stiff and purposefully walking at a slow pace during medical examinations.
The experts, in turn, had failed to look at the facts (or purposefully ignored them) and in one glaring example, calculated the loss of earnings on a monthly income of R7 700 when the salary slips showed the plaintiff’s income was R5 500 per month. In addition, the plaintiff had told one expert she was completing her schooling, and based on this unproven allegation, the expert worked out a loss of income scenario as if she had completed her schooling and would have attained a better job – but for the accident. These ‘errors’ culminated in a loss of earnings claim for over R2 million.
Quoting from the judgment at paragraph:
[96] To my mind the approach adopted by the plaintiff’s legal representatives is nothing more than sleight of hand. There is no evidence that Ms T lost her job as a result of the accident, she does not qualify for general damages on her own case. And yet, through the machinations of the legal representatives an offer was extracted from the RAF.
[97] It is important that the settlement proposal was for more than merely an offer. It contained a detailed motivation in the form of accepted facts that were materially at odds with the true facts and constituted, on the face of it, a deliberate misrepresentation of the claim and the evidence available to prove it.
A lucrative payday
The Court pointed out that this case represented one of many, and that this practice had become common place. Legal representatives engaged in these shenanigans are motivated by greed and work on a contingency basis. The higher the settlement, the greater the fee. These medical experts largely also work on the basis that if the RAF does not pay, neither will they be compensated. It stands to reason then, that these parties all have a vested interest in ensuring a lucrative payday. No wonder then, that insurers are faced with an onslaught of fraudulent claims.
Whilst it is appreciated that a plaintiff’s attorney should enter a negotiation with a defendant with the aim of maximising the amount settled on, this should not be achieved by deception. In the case of MT versus RAF, the ethical conduct of those parties involved is drawn into serious question. Whereas the Court directed various professional regulatory bodies to investigate the legal representatives and the medical experts, the question is, is that enough?
Taking a firm stance
Aristotle noted in The Nichomachean Ethics that “Our activities, in any area, give us dispositions which match them… and it makes no sense to say that someone who keeps treating people unfairly nevertheless doesn’t want to be an unfair person.” In the context of this discussion, those involved in fleecing cannot distance themselves from the act, and those who pay, cannot ignore the consequences of doing so.
Insurers, from an underwriting perspective, should take a firm stance against those who actively seek to pilfer and deceive. Insurers should refuse to cover such parties from a professional point of view. Such ‘clients’ would, in any event, be undesirable risks.
From a claim’s perspective, insurers should be slow to entertain unmeritorious settlements, simply to close out claims and save litigation costs. In so far as undeserving claimants and their legal representatives are compensated; this will only embolden future claims and entrench malfeasance.
Jonathan Kaiser
Senior Claims Specialist | Professional Indemnity & Liability