Supreme Court ruled imprisonment for insurance fraud

On 21 June 2018 the Supreme Court ruled that the sentence for insurance fraud amounting to approximately NOK 58,000 should be 21 days imprisonment.

Author: Partner | Lawyer Christian Kjellby Nesset

The convicted person had edited old service reports and receipts that they had found in the database of their former employee – the insurance company If – and presented them as proof of damage to personal property.

The main question was whether to impose community service or imprisonment as punishment.

The convicted person had previously been sentenced 45 hours of community service at Sunnmøre District Court. The sentence was subsequently appealed and increased to 45 days imprisonment at Frostating Court of Appeals. A further appeal was brought to the Supreme Court, with the defendant arguing that imprisonment should be terminated and that community service should be re-imposed.

The crux of the case relates to the upper threshold for the use of community service as punishment. In other words, at what point does the deprivation of freedom constitute an appropriate response to insurance fraud.

It is important to note that, despite the fact that the legislature has encouraged greater use of community service as punishment, this is not particularly appropriate for insurance fraud. Imprisonment is preferred due to its deterrent effect. In previous practice, community service has only been used in cases involving a “relatively modest amount” (HR-2018-1281-A). In addition to this, mitigating circumstances have also played a factor in the use of community service in sentencing.

 

Attention was given to the question as to whether insurance fraud should be treated in the same manner as social security fraud. This had likewise been argued in the previous case Rt-2003-1464. In this case, the majority of Supreme Court justices ruled that upper threshold for community service should be fraud of circa NOK 30, 000. In contrast, the threshold was lowered to NOK 20, 000 - 25,000 for insurance fraud. The importance of deterrence in cases relating to insurance fraud, as opposed to social security fraud, was reiterated.

Nevertheless, in Rt-2004-1379, Rt-2004-1381, Rt-2006-1691 and Rt-2012-941, community service had been administered for amounts far greater than NOK 25,000. In these cases, mitigating factors played a great part in decreasing the sentence from imprisonment to community service. The value of the fraud itself was not the sole determining factor.

As such, despite the elevated amount of the fraud in this case, the amount itself would not have prevented the use of community service. Document falsification, in relation to the insurance fraud, constituted a breach of trust and therefore served as an aggravating circumstance.  It was also held that the fraud had been committed during the probation period following a previous suspended sentence. The convicted person was also not undergoing any form of rehabilitation that according to case law might provide grounds for a community sentence.

The final judgement was therefore 21 days imprisonment.

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