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Tuesday, 31 March 2015

The County Court System in England and Wales provides a good hunting ground for criminals wishing to use the law to force companies into paying false claims against them.

Speaking at a lunchtime briefing today Robin Chater, Secretary-General of the Federation of International Employers (FedEE Global), outlined a common way by which criminals are now acting against companies operating in England and Wales.

“Criminals need no longer break into property or mug shopkeepers to obtain ready cash from business organisations. The County Court system will assist them to make their fraudulent claims. Under the present “small claims” system the courts allow cases of smaller monetary value (up to 10,000 pounds) to be heard without the necessity of legal representation. The problem is that many of the claims being made are spurious and by making it simple and cheap to institute a claim the court system is unwittingly aiding the fraud.”

Robin went on to point out that “Anyone can make a claim against a company for any sum up to the small claims limit. To make it credible all they have to do is become a contractor for a short period. Unless their contract is very tightly written a false claim for any sum can be made very readily on the basis of self-certified hours. It is also not unlawful to threaten anyone with legal action – so it is a hammer to hit hard at any company refusing to pay up. The Court service is obliged to allocate the hearing to a court local to the individual – so that if the contractor is at some distance from the company it will be very costly to defend it. However spurious the claim, a company could lose a case as the court will often be biased towards the claimant if they are an individual. Moreover, in such cases rules of evidence are not strictly defined. The consequent loss of a case could so seriously affect the company’s credit rating that many companies will not take the risk and settle out of court.

“Criminals are becoming increasingly aware how such procedures can work in their favour. Three cases have come to the Federation’s attention – one even against a private detective agency. So rather than furthering the administration of justice the courts are bolstering the perpetration of fraud.

“To overcome this problem mediation should be a compulsory first step rather than an option – as criminals will currently reject such voluntary resolution of their cases. It should also be a requirement that a pre-hearing document review be undertaken to ensure that there is a prima-facie case against the defendant. This paper examination of evidence could lead to false claims being rejected. Finally – if cases are found in favour of defendants in a full hearing it should be their right to submit the county court proceedings to the Director of Public Prosecutions with a view to prosecution on the grounds of fraud and the penalties increased because the courts had been used to bolster the false claim.”

(Source - FedEE Global Press Release)  


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