fraud both sides of the fence

1. FRAUD � BOTH SIDES OF THE FENCE Marc Asquith

3. Low Velocity Impact Each case is unique and has to be decided upon its own facts Over the last few years, insurers have taken a more robust stance over cases known as, Delta V or low velocity impact cases (LVIs).

4. Low Velocity Impact The general public is now more aware of its compensation rights than previous generations. Are the public merely asserting their rights to compensation or have LVI claims become a fashionable route to make an easy buck? In an LVI claim the Defendant usually admits driving into collision with the Claimant�s vehicle at slow speed, but the level of damage sustained in the course of the accident was so slight that it would be impossible or highly unlikely for any, �unusual occupancy movement� to have been suffered by the people within the Claimant�s vehicle, so as to cause personal injury.

5. LVI Causation The are many arguments about causation of whiplash type injuries in low impact collisions

6. LVI Causation In predominantly Canadian led research, factors which increase the risk of injury to the area of the cervical spine/upper torso, include:- whether the neck is rotated left or right at impact; the initial seating position of the Claimant within the seat; the type and construction of the seat; the type and construction of the seat belt; whether the accident was expected or unexpected; whether the accident was front or rear; the precise degree/angle of impact; the velocity at impact is not necessarily the determinative feature of the force generated within the cockpit; and the physical condition of the subject.

7. LVI Causation There are other mechanical issues to be taken into account, that is: the nature of the vehicle being driven, size of vehicles, the impact absorbing capacities of any bodywork, stiffness or otherwise in the chassis and the weight of each vehicle.

8. Typical Accident Typically there will be a collision between two vehicles, usually at a roundabout or a set of traffic lights. The Defendant will have driven into the rear of the Claimant�s vehicle. There will be no or very little damage to either one or both vehicles and no apparent injuries. There will be a brief conversation and the parties may exchange details at the scene. It is unlikely that the details of any independent witnesses will have been taken because no one appears to be hurt.

9. Typical Accident The claim for personal injury is usually a surprise to the Defendant driver who will insist that no injury was complained of at the time of the accident. The Defendant�s insurers will also point out that the physical damage to the vehicles is insufficient to cause any injury to the occupants of the Claimant�s car.

10. Typical Accident There is nothing unusual in the failure to report injury at the accident scene. �Whiplash� type soft tissue injury symptoms usually come on between a few hours and several days after an accident. So there is nothing unusual in a delay in the onset of reported symptoms.

11. Typical Accident Once symptoms emerge some Claimants seek medical advice. Some Claimants will attend the local hospital get examined and then, be discharged with advice and analgesia. Others will seek the assistance of their General Practitioner, but there will be a further delay in securing an appointment. Finally, there are those who seek no independent medical treatment but self medicate by using painkillers bought over the counter.

12. In road traffic accidents there are 3 types of evidence that cannot lie Plans Photos Vehicle Damage

13. Vehicle Damages Solicitors may not receive instructions to pursue a personal injury claim for many months or years after the date of the accident so it is not unusual for either the Claimant�s or the Defendant�s motor vehicle to have either been repaired or indeed sold on, thereby preventing any expert examination of the vehicle. Sometimes, one of the vehicles may still be in its original state and an engineering expert can be instructed to consider the impact forces involved in the collision through an inspection of one car and perusal of the repair documentation (on the other car).

14. Vehicle Damage Reliance may be placed upon the policyholder�s recollection of the obvious damage to the other vehicle. However, this rarely holds much weight. In the immediate aftermath of the accident a negligent driver would probably have made no more than a cursory examination of the vehicle with which he has collided They may be suffering some sort of shock/stress reaction to what has just occurred.

15. Vehicle Damage They may not even have looked at the other vehicle�s damage for more than a few seconds before exchanging the relevant details. Sometimes the damage caused to motor vehicles is not readily apparent upon a cursory inspection, e.g. a rear bumper can appear undamaged from the rear but when viewed by the wheel arch, the panel alignment is displaced which means the load capacity of the bumper has been compromised and will require replacement.

16. Engineering Evidence Forensic vehicle examiners instructed on behalf of the insurers may assert that the damage to the Claimant/Defendant vehicles is so light or trivial that it is impossible or very unlikely that sufficient energy has been created in the course of the accident to cause unusual occupancy movement to the Claimant and therefore, any personal injury. The expert report will usually focus on the version of events as described by the Defendant policyholder. This could be a problem if under cross examination the Defendant driver concedes that the Claimant�s vehicle was moved by the impact or that there could have been unnoticed damage. There can also be problems getting permission from the court for the Defendant to rely upon their expert report.

17. Admissibility of Expert Evidence In the Court of Appeal decision of Liddell v Middleton (1995)95/0350/C Lord Justice Stuart Smith said � We do not have trial by expert in this country; we have trial by judge��There has been a regrettable tendency in recent years in personal injury cases, both road traffic and industrial accidents, for parties to enlist the services of experts whether they are necessary or not. When they are not necessary, they simply add to the already high cost of litigation and the length of the trial��But in road traffic accidents it is the exception rather than the rule that expert witnesses are required.�

18. Admissibility of Expert Evidence In the same case, Lord Justice Peter Gibson said, � Very recently Lord Woolf in his interim report, �Access to Justice� commented at page 185 on the growing trend in non-medical cases to introduce experts where no help is really needed. He pointed out: �The inappropriate use of experts to bolster cases leads to additional cost and delay�. CPR 35.1 provides that, �Expert evidence shall be restricted to that which is reasonably required to resolve the proceedings�.

19. Expert Evidence The Claimant will argue that the use of a forensic engineering expert report at trial would be of limited value when determining the actual facts of the accident/collision speed etc. The credibility of the Claimant is the essential feature of all these cases and the expert is unlikely to assist the Court on this pivotal issue. [Especially when the Defence does not explicitly plead fraud!]. The Claimant will argue that the Defendant has breached the CPR rules/protocol by unilaterally instructing their own, �engineering� expert in breach of the pre-action personal injury protocol, paragraphs 2.11 and 3.14.

20. The Defence The typical defence in a LVI claim, concedes negligence but requires the Claimant to prove his case and prove that he actually sustained personal injury in the accident. (A non-admission defence). � The Defendant must comply with CPR.16.5(1) in the defence, namely: (a) which of the allegations in the Particulars of Claim he denies; (b) which allegations he is unable to admit or deny, but which he requires the Claimant to prove; (c) which allegations he admits; (2) Where the Defendant denies an allegation � (a)he must state his reasons for doing so; and if he intends to put forward a different version of events from that given by the Claimant, he must state his own version.

21. At Trial If the Defendant suddenly puts to the Claimant at trial that he/she had suffered no injury, the defence becomes / is a denial in non-admission clothing. A litigant is entitled to know the case it has to meet at trial, especially where the circumstances of the case lead to the logical conclusion that either the Claimant is genuine or lying. The decision of HHJ Stewart QC confirms this point, Lawrenson v Lawrenson & Equity Red Star (2005)12.7.05., paragraph 43 onwards: �Further the Defendants� engineering evidence does not fit with a non-admission defence so if the Defendant seeks to rely upon either its own or joint engineering evidence then the defence should be amended as well, so as to put the positive case.�

22. The F Word If the Defendant is prepared to plead fraud then the Court will be justified in taking an entirely different approach to the issue of expert evidence and allow the use of engineering and medical evidence from the Defendant. In order to plead fraud the Defendant must have reasonably credible evidence which establishes a prima facie case of fraud otherwise its legal advisers will fall foul of their professional conduct guidelines.

23. The Medical Report The Medical Report will be based upon History from the patient The Medical Examination A review of the medical records The expert will be greatly reliant upon the credibility of the Claimant in reporting his symptoms and his behaviour in examination. During the medical examination various tests can be performed to catch out the exaggerating or fraudulent Claimant. ( Waddell�s signs )

24. Casey v Cartwright [2006] EWCA Civ 1280 In Casey v Cartwright [2006] EWCA Civ 1280 the Court of Appeal amplified the guidance it gave in Kearsley on case management and the role of expert evidence on causation. A claim for damages for whiplash had been commenced, relying upon the opinion of a GP whose report was served with the Particulars of Claim. LVI had been pleaded in the Defence and the District Judge on allocation had given the parties permission to rely upon a jointly instructed orthopaedic consultant who had examined, reported, been questioned in writing and responded to those questions.

25. Casey v Cartwright [2006] EWCA Civ 1280 The case came before HHJ Holman who revoked the permission to rely upon the joint expert (because of concerns about his evidence) and promptly gave permission to appeal. The decision was unappeallable in the sense that the appellant could not demonstrate that the Judge erred in principle or reached a decision that was not reasonably open to him. Lord Justice Dyson gave useful guidance, however, which was the real purpose of HHJ Holman granting permission to appeal.

26. Casey v Cartwright [2006] EWCA Civ 1280 In Casey the Court of Appeal gave the following guidance: (I) We think it desirable that if a Defendant wishes to raise the causation issue, he should satisfy certain formalities. In this way, the risk of confusion and delay to the proceedings should be minimised. Accordingly, where in a particular case the Defendant wishes to raise the causation issue, he should notify all other parties in writing that he considers this to be a low impact case and that he intends to raise the causation issue. For the reasons set out at para 33 below, he should do so within 3 months of receipt of the letter of claim. The issue should be expressly identified in the Defence, supported in the usual way by a statement of truth. Within 21 days of serving a Defence raising the causation issue, the Defendant should serve on the Court and the other parties a witness statement which clearly identifies the grounds on which the issue is raised. Such a witness statement would be expected to deal with the Defendant�s evidence relating to the issue, including the circumstances of the impact and any resultant damage.

27. Casey v Cartwright [2006] EWCA Civ 1280 (ii) Upon receipt of the witness statement, the Court will, if satisfied that the issue has been properly identified and raised, generally give permission for the Claimant to be examined by a medical expert nominated by the Defendant. � (iii) If upon receipt of any medical evidence served by the Defendant following such examination, the Court is satisfied on the entirety of the evidence submitted by the Defendant that he has properly identified a case on the causation issue which has a real prospect of success, then the Court will generally give the Defendant permission to rely on such evidence at trial.

28. Casey v Cartwright [2006] EWCA Civ 1280 (iv) We believe that what we have just said reflects the tenor of the judgment in Kearsley. There will, however, be circumstances where the judge decides that, even though the evidence submitted by the Defendant shows that his case on the causation issue has real prospects of success, the overriding objective nevertheless required permission for expert evidence to be refused. It is not possible or desirable to produce an exhaustive list of such circumstances. They include the following. First, the timing of notification by the Defendant that he intends to raise the causation issue. Unless the Defendant notifies the Claimant of his intention to raise the issue within 3 months of receipt of the letter of claim, permission to rely on expert evidence should usually be denied to the Defendant. It is important that the issue be raised at an early stage so as to avoid causing delay to the prosecution of proceedings. The period of 3 months is consistent with para 2.11 of the Pre-Action Protocol for Personal Injury Claims which provides that a Defendant be given 3 months to investigate and respond to a claim before proceedings are issued.

29. Casey v Cartwright [2006] EWCA Civ 1280 � (v) Secondly, if there is a factual dispute the resolution of which one way or another is likely to resolve the causation issue, that is a factor which mitigates against the granting of permission to rely on expert evidence on the causation issue. In such a case, expert evidence is likely to serve little or no purpose. (vi) Thirdly, there may be cases where the injury alleged and the damages claimed are so small and the nature of the expert evidence that the Defendant wishes to adduce so extensive and complex that considerations of proportionality demand that permission to rely on the evidence should be refused. This must be left to the good sense of the judge. It does not detract from the general guidance given at para 32 above. (vii) We should say something about single joint experts. They have an invaluable role to play in litigation generally, especially in low value litigation. But we accept the submission of Mr. Turner that, at any rate until some test cases have been decided at high court level, judges should be slow to direct that expert evidence on the causation issue be given by a single joint expert. This is because the causation issue is controversial.

30. Admissions of Liability It is common for negligence to have been conceded by the insurer and for the arguments at trial to centre around causation of personal injury. However, in my experience, it is not unusual for an insurer to have admitted liability subject to causation. If the subsequent Defence thereafter states that it is �impossible� for there to have been injury caused as opposed to unlikely, then, in my opinion, the Claimant is entitled to apply to have the pleading struck out and/or apply for summary judgment since it is inconsistent with the legal effect of an admission of liability. As a matter of law, an admission of liability reflects the following concessions:- That a duty of care was owed between the parties; That the duty of care was breached; That some damage resulted from the breach. If some damage has been conceded, then the Defendant, if it is to maintain its �impossibility� defence, should apply to resile from its admission of liability. Pre-action admissions are now governed by CPR 14.1A and the usual prejudice arguments apply. The more serious the allegation being raised by the Defendant the greater the chances of resiling from an admission of liability

31. Armstrong v First York(2005)EWCA Civ 277 �This was a classic low velocity impact claim where the Claimant alleged that he had suffered injury as a result of a minor accident. The case went to trial and the Defendant had permission to call an expert forensic examiner. Both the Claimant and the expert were subjected to lengthy cross examination (by the Judge) and in simple terms, having heard the evidence he was of the view that the Claimant was a truthful witness and yet there was no detectable flaw in the reasoning of the Defendant�s expert that the impact should not have generated sufficient force to injure the Claimant. During his judgment, the Judge reminded himself that he was not bound to follow the expert opinion and whilst he could not detect any flaw in the expert�s reasoning, the credibility of the Claimant was sufficient to swing the case the Claimant�s way and he awarded damages plus costs. On appeal, the Court of Appeal dismissed the Defendant�s arguments. The Judge had given clear reasons for his decision and the Claimant�s truthfulness/credibility was sufficient for the Judge to prefer that parties case at trial.

32. LVI Again! The playing field in LVI cases appears to be tilted against the Defendant and the insurers. Even if they can produce cogent engineering or medical evidence a �credible� Claimant should still succeed at trial. Defendants need to pick the cases that they contest e.g. those cases where a Claimant alleges chronic symptoms lasting, say, over a year. Medical research casts doubt upon symptoms from LVI claims lasting more than 12 months. Until further research has been performed Defendant insurers will continue to have unrealistic prospects of proving that no physical injury was caused by an LVI. Even when further research is available to show that no physical injury has been caused, Claimants will no doubt seek to claim for psychological injuries!

33. Staged Accidents Often two or even three vehicles with no apparent connection have lorries reversed into them or are pushed into lampposts/walls to create damage which is later alleged to have been caused by another vehicle that has suffered a similar fate These claims do not arise otherwise than when the Claimant and the Defendant drivers collude. Usually the Defendant�s insurer will seek to be added to proceedings as the Second Defendant. It will obtain engineering evidence to support the contention that the damage sustained by the vehicles is inconsistent with an accident as alleged by the Claimant and as supposedly corroborated by the (now First) Defendant. The Second Defendant in this situation will always be assisted by proving a relationship between the Claimant and First Defendant ( requiring close examination of the Cue / Cache PI Searches ) but fundamentally this case turns on the engineering evidence obtained.

34. Staged Accidents Often by the time the Defendant Insurers have found a link or other fraud triggers it is too late to commission engineering evidence. However occasionally fraudsters are too stupid to sell the vehicle on or have it disposed of before the insurers� engineers can find brick dust in the mangled front radiator grill rather than parts of the Claimant�s rear bumper. Staged Accident cases are always fact sensitive. The cases are always multi-track because there is obviously an express allegation of fraud and the parties will have a reasonably free rein to assemble the evidence they seek.

35. Staged Accidents A common procedural situation is that due to collusion/deliberate inactivity on the part of the Defendant judgment is entered in default. The insurer often seeks during the timetable to Disposal of the case to be added in to the proceedings as Second Defendant and set judgment aside. Claimants would be foolish to attempt to resist the insurer (usually the Road Traffic Act insurer of the Defendant vehicle) being joined. The issue is really only whether the insurer can set the (usually regular) Judgment aside. The usual CPR 13.3 test is to be applied. A draft Defence setting out engineering evidence supporting staged accident is the norm. Promptness of the application is usually a point in the Claimant�s favour and the Second Defendant�s witness statement in support will need to deal with this.

36. Francis, Henry and Reeves v Wells and Churchill Insurance Co. Ltd [2007] EWCA Civ 1350 The correct legal approach at trial is set out in Francis, Henry and Reeves v Wells and Churchill Insurance Co. Ltd [2007] EWCA Civ 1350 per Lloyd LJ: There was some debate before us about the burden of proof. Clearly the burden is on the claimants to prove that the collision occurred, by the negligence of Miss Wells, and that each claimant suffered damage. Unless that is proved on the balance of probability, the claim of any particular claimant cannot succeed. Even apart from the coincidence of three events involving the third claimant and Mr Senghore there would still be plenty of material on the basis of which to question the reliability of the respective claimants, though no obvious basis for saying that any of them had deliberately invented their story. The judge might dismiss a claim, even in those circumstances, as not proved on the balance of probabilities but equally he might hold that, despite a good deal of inconsistency and internal conflict, there was enough common ground between the parties to find that the case was proved. The legal burden then remains on each claimant, but with the allegation of fraud by way of defence an evidential burden would arise on the defendant, and a substantial burden at that.

37. Francis, Henry and Reeves v Wells and Churchill Insurance Co. Ltd [2007] EWCA Civ 1350 His Honour Judge Tetlow, as Designated Civil Judge for Outer Manchester, is a very experienced judge but, with all due respect to him, it seems to me that on this occasion he failed to take a crucial step in his assessment of the evidence. He should have looked at it as a whole and considered whether the combined effect of the striking coincidence of three incidents involving Mr Reeves and Mr Senghore, and all the difficulties and inconsistencies in the evidence of the four witnesses, was sufficient, as a whole, to satisfy him that the claim was not genuine, or at least to show that the claimants' cases were not proved on the balance of probability. In so doing he should also have addressed expressly the question of what facts he found to have been made out by the evidence. As I see it, his conclusion in favour of the claimants is the result of reasoning and analysis rather than of assessment in the light of the content and the manner of their evidence. He did not at any point step back from the detail of the evidence and review the impression that it left on him as a whole. Rather, in the course of reviewing the evidence of the successive witnesses, he dealt with their evidence one by one and, in turn, relegated each of the serious problems in the claimants' evidence to a subsidiary role which in his view was potentially corroborative but not in itself probative. That suggested antithesis is, in itself, odd, to say the least, and suggests a misdirection, in that evidence which is corroborative must surely be probative or it is of no value at all.

38. Francis, Henry and Reeves v Wells and Churchill Insurance Co. Ltd [2007] EWCA Civ 1350 Moreover it seems to me that the judge misdirected himself specifically when saying that the circumstances of the March 2005 accident could have no bearing on the view that he took of the truth or otherwise of the allegations in respect of the February 2005 accident. I also consider, with respect, that the judge was wrong to proceed straight from the proposition that the defendant had not made out its claim of an invented accident to the conclusion that the claimants had proved their claims on the balance of probability. This may be only a theoretical distinction but, even if the case was not one of fabrication, it remained for the claimants to make out their case of negligence, and damage resulting from it, and in the absence of findings of fact which show the basis on which the judge found in favour of the claimants it is not clear how he reached that conclusion. By itself I might not regard that last point as sufficient but, taken together with what I regard as misdirections in the course of coming to the conclusion that the case of conspiracy was not made out, it seems to me that the judge has not dealt properly with the issues presented by the rival contentions and arising from the unsatisfactory nature of the evidence put forward by the claimants and the first defendant. �

39. Francis, Henry and Reeves v Wells and Churchill Insurance Co. Ltd [2007] EWCA Civ 1350 � It may be that, if he had addressed the overall effect of the evidence, the factors to which he referred in paragraph 55 against the idea of a conspiracy involving all four parties would still have been sufficient to lead him to the conclusion that the claim was not invented, and he might also have been satisfied that, despite the inadequacies of the claimants' evidence, there was enough there that was reliable to enable him to find facts on the basis of which he could hold that the claims were proved on the balance of probability. But it seems to me, with respect, that the judge's reasoning is not sufficient to justify those conclusions as the judgment stands. � �

40. Slam Ons This is a situation common at roundabouts in certain areas which often become hotspots on the spreadsheets of data analysts. The scenario is usually that the Claimant vehicle is followed by the Defendant vehicle (more often than not a commercial vehicle) towards a roundabout. Very often there would be little hindrance to the driver�s view onto the roundabout as they approach. Very often the Claimant car will come to a halt for no apparent reason at the entry to the roundabout. As it then sets off with an obviously clear roundabout to the right, the Claimant will slam the brakes on while the Defendant follows closely, still looking to his or her right to check for oncoming traffic to give way to. Sometimes the Claimant will even have gone to the trouble of removing the bulbs from, or connections to, the rear brake lights. � These sorts of claims again involve little law and are fact sensitive.

41. Ghost Passengers Deliberate slam-ons are often accompanied by ghost passenger claims. It is obviously easier for a fraudulent Claimant driver to add passengers after the event; they may of course actually be injured if he or she put them in the vehicle before he deliberately slammed-on! Ghost passengers are seen fleetingly in other more normal road traffic accidents however. Their appearance has also been reported in genuine accidents. The success or otherwise of their claims is fact sensitive and the credibility of the parties and the witnesses is really the only way of determining the issues.

42. Tainting This argument runs as follows: in a genuine accident the Defendant admits driving negligently into collision with (usually the rear) of the Claimant�s vehicle. The Claimant then supports the presence of a person or people in the vehicle whose presence is disputed by the Defendant. Alternatively, the Claimant seeks to exaggerate an otherwise genuine head of loss for the purposes of financial gain. The Defendant contends that if the passengers whose presence was disputed or found not to have been in the vehicle when the Claimant who supported their presence lied to the Court obviously to assist with the pursuance of fraudulent claims.

43. Tainting Similarly, if the Claimant is found to have exaggerated the extent of symptoms, for example, but is found to have sustained some injury, nevertheless, the Defendant contends that this dishonesty in increasing or maximising damages should preclude the recovery of any damages for pain, suffering and loss of amenity and indeed for all other heads of loss. Tainting requires consideration in 2 ways:- simple credibility; the public policy approach.

44. Tainting 51. The best analogy is to consider the claim for damages for personal injury. Very often the sole basis of a medical opinion which supports a particular duration of symptomology being linked to the accident in question will be the history provided by the Claimant to his or her medico-legal expert. Even if the Claimant has visited hospital and/or the General Practitioner and/or a physiotherapist, very often any recorded complaint following such a visit will be no more than a recital of a history provided by the Claimant. In this situation, if the Court finds that the Claimant has been dishonest in some way or for whatever reason his evidence is unreliable then, as often happens in this situation, it is perfectly proper for the Court to find that because the Claimant�s testimony is unreliable, the Claimant will not have made out the head of loss which is predicated solely upon his word. �

45. Tainting Compare and contrast that analysis with the situation where the Defendant drives negligently into collision with the Claimant�s vehicle and accepts that as a result of this negligent driving, the Claimant�s car was smashed up. The Claimant then goes on to exaggerate the extent of the damage caused to the vehicle and there is an engineering dispute about this point. The Claimant also dishonestly alleges that he sustained injury in the collision when in fact he sustained none. The Judge would be right to award no damages for injury but does the Claimant get damages for the genuine parts of the claim that are made out on the evidence

46. Tainting The answer would appear to be yes: Shah v Ul-Haq, Khatoon and Parveen [2009] EWCA Civ 542. The case of Widlake v BAA Ltd [2009] EWCA Civ 1256 is a personal injury claim in which the Claimant had exaggerated her claim but the non-exaggerated part still allowed her to beat the Defendant�s offer the correct (or at least unimpeachable) approach of the trial judge was to award no order as to costs

47. Exemplary Damages In their quest for justice Defendant insurers are seeking to hit back at the number of fraudulent claims that for one reason or another slip through the net. In certain cases they have taken to making a counterclaim against the Claimant whom they allege has been fraudulent, often as part of the conspiracy, to seek to recovery exemplary damages from that Claimant to punish them for having committed a fraud in the first place. This is an interesting development with which the Defendant�s insurers have latterly had some success. � The basis of the claim for exemplary damages is Rookes-v-Barnard [1964] AC 1129. The seminal guidance was that exemplary damages could be awarded in cases where the Defendant�s conduct (here the fraudulent Claimant) had been calculated by him to make a profit for himself which might well exceed the compensation payable to the Claimant. In other words, if the potential value of the fraud was so significant that it would far outweigh what an unsuccessful Claimant would have to pay by way of costs to the Defendant who had successfully defended the litigation, then the Defendant would be entitled to an award to represent this imbalance and thereby to punish the fraudulent Claimant.

48. Exemplary Damages By way of damages the counterclaim of the Defendant claims the cost of investigating the fraud which are reflected in the costs of the claim. It also claims the cost of pursuing a counterclaim and any extra award that may well be the difference between those costs in total and the potential value of the fraud. � The cause of action for such an award is the tort of deceit, in other words, that the Claimant made false statements, knowing them to be false and intending the Defendant to rely upon them to its detriment. There must then subsequently have been the act of reliance and thereby the loss. The cost of investigating the fraud is thereby a loss sustained as a result of the Claimant�s dishonest assertions. � It would seem to be rare that the potential value of the fraud is sufficient to justify such an award of exemplary damages.