Injured Employee Refused Damages Due to Fraudulent Behaviour

The image of a fraudster wearing a neck brace and walking with crutches to work, only to discard them and skip off to the pub a short time later, is regularly (and in the majority of cases unfairly) associated with personal injury claims. However, fraudulent claims are made, and it is incumbent upon the employer and the lawyers representing them (or representing their insurance company) to conduct thorough investigations into suspected fraudulent behaviour. In this article, our Lead Partner for Insurance, Cameron Seymour, discusses a recent claim involving a convicted fraudster.

On 18 May 2019, Mr K, a carpentry trade assistant and labourer, suffered a laceration to his thumb. He made a claim for compensation alleging the laceration was caused by his employer failing to provide proper equipment or training on how to perform a certain task.

Mr K received workers’ compensation for his injuries totalling more than $45,000 (including approximately $32,000 for lost wages and other payments).

When the compensation claim finished, Mr K alleged he remained disabled by his injury and claimed further damages of more than $477,000 against his employer. The additional damages included claims for past ($45,000) and future ($368,000) economic loss.

It was at this stage that Mullins Lawyers was instructed to respond to the claim on behalf of the workers’ compensation insurer and, depending on our investigations, defend it.

As part of our investigations (which were conducted in conjunction with the employer), it appeared the Claimant was working for himself during the period he was receiving workers’ compensation benefits. This work was not declared to the workers’ compensation insurer.

With the assistance of the employer, who was invaluable in our evidence gathering, we undertook further enquiries and spoke to people with whom he worked. We also identified a customer for whom he completed work whilst also receiving workers’ compensation benefits.

The matter was referred to the Workers’ Compensation Regulator, who launched a prosecution against Mr K who pleaded guilty to fraud, attempted fraud, providing false or misleading information, and failing to notify of an engagement in a calling.

Mr K was sentenced to 14 months and seven months imprisonment in relation to the charges (wholly suspended) and ordered to pay restitution of his compensation and costs of the prosecution.

Pursuant to section 537 of the Workers’ Compensation and Rehabilitation Act, because Mr K was convicted of fraud against the workers’ compensation insurer, his right to claim damages for that injury was extinguished.

It is not unusual for employers to allege fraud against the injured worker and request us to investigate the claim. A fraud allegation is very serious and, most of the time, allegations of fraud do not meet the necessary threshold to launch a prosecution. However, as with this case, when there is evidence to support a prosecution, the law is unforgiving. We see these prosecutions as very important to keep the system as fair as it can be for all parties.

“The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.”
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