Insurance company sought to recover around £50,000 it had paid out under household policy, on the basis of fraud. VAT of £7,500 had been fraudulently claimed on an invoice where no VAT had been charged or was payable.
The dishonest claim for VAT from the insured is held not to form part of his original claim. The insurers cannot avoid the whole claim or recover all monies paid out, just VAT. Trial lasts 4 days after taking 24 months to get to court. The insurer’s costs are £60,000 and they have to pay £45,000 towards insured’s costs.
CFJ assessor rules on issue within two months at cost of £4,500 per party. The insured agrees to pay back £15,000 of the monies already received.