Social media is a game changer. As a society we are no longer passive consumers of media, we are active participants. It is this concept of “user generated content” that brings inherent risks and challenges for insurers, but also significant opportunities.
These opportunities, if managed carefully, can provide an excellent and cheap resource for uncovering fraudulent activity or providing other useful information in the defence or quantification of claims and claims management generally.
Insurance fraud in Australia costs more than $2 billion a year, according to the Insurance Fraud Bureau of Australia, the independent taskforce of the Insurance Council of Australia.
The benefits of social media can be seen, for example, in the defence of personal injury claims. Social media materials can be useful in cases where a plaintiff alleges certain ongoing incapacity, because insurers find this difficult to challenge without surveillance evidence.
Traditional surveillance is costly, time-consuming and random (in the sense that it is usually dealing with only one point in time). Plaintiff lawyers often dismiss useful surveillance as “a rare good day” for the particular plaintiff.
Social media on the other hand is essentially free (subject to time). It can also be incredibly persuasive where a plaintiff is describing their activities in their own words or posting photographic evidence (or, increasingly, video footage) of those activities.
For example, workers’ compensation investigators may find a supposedly injured employee posting photos of their latest rock climbing expedition on Facebook.
Social media can also be used to efficiently direct more traditional observations, for example when a plaintiff indicates via social media that he or she will be attending a specific event.
However, there are potential pitfalls in using social media as a claims investigation tool.
In the US, where insurance fraud is estimated to cost $30-$60 billion a year, it is accepted that there is nothing unethical or illegal in lawyers or investigators accessing a social media profile that is open to the public.
However, the courts are likely to find it is unprofessional conduct (or even professional misconduct) for lawyers to “friend” a plaintiff to gain access to that person’s social media pages.
Facebook pages may be admissible as evidence in Australian courts under certain circumstances. In Tasmania, we have seen difficulties adducing Facebook evidence on the basis of unknown providence of the document. The difficulties reflect a concern by the courts about the ease with which someone can pretend to be someone else online.
The recent case of Condon-Nixon v Rivers [2012] FamCA 7 is a useful example of the considerations the courts must weigh up. A party to the proceeding alleged false statements were made about her on a Facebook page she claimed had been set up by the opposing party’s new spouse.
Ultimately, the Facebook evidence was not accepted by the court in the face of very forceful denials, the balance of evidence which suggested suspicious behaviour by the party making the allegations, and in circumstances where it could not be authenticated who established or created the Facebook page. The Court noted that requests could have been made to the website controller, or subpoenas could have been issued.
Whilst authenticity of social media evidence will always be a valid consideration for the courts, it appears that some changes are afoot.
Amendments have recently been proposed to the South Australian Evidence Act to assist with the use of technology based evidence. The proposals included removing requirements for electronic coding to prove the authenticity of evidence, and to place the onus on the other party to prove that what has been tendered is not legitimate.
If passed, such changes could allow screenshots and printouts from Facebook, Twitter and Snapchat accounts, and would facilitate the admission of evidence that is reproduced in a format different to its original.
Much care will need to be taken moving forward to ensure that evidentiary laws strike a balance between advancing technology and fairness to the parties.
Australian insurers and legal practitioners will no doubt watch developments with interest.
This article was written by Sarah Sealy, Partner and Emily Page, Senior Associate.