Wrong Payment by Insurers and Extra Recovery Through Court !!

Often, Insurance Companies are portrayed in poor light in Tamil Cinema ~ many a times, people would talk of bribing people to have a property loss exaggerated and paid.  There have been scenes of people faking death to get paid under life insurance policies and a frail-looking Officer of the Company would come for verification and pay suitcase full of cash ! [in Cinema, the insurance payment is done in cash at the doorstep !!] Away under US Code, there is special provision for recovery – it states that in addition to any other method of recovery provided by law, the Secretary concerned may authorize the recovery of any amount erroneously paid to a person by deduction from later payments to that person.  However, recovery of  an amount erroneously paid to a person is not required if, in the judgment of the Secretary concerned— there has been no fault by the person to whom the amount was erroneously paid; and recovery of such amount would be contrary to the purposes or against equity and good conscience. Insurance bad faith is a legal term of art unique to the law of the United States that describes a tort claim that an insured person may have against an insurance company for its bad acts. Under the law of most jurisdictions in the United States, insurance companies owe a duty of good faith and fair dealing to the persons they insure.  If an insurance company violates that covenant, the insured person (or "policyholder") may sue the company on a tort claim in addition to a standard breach of contract claim. Away in UK, two sisters were ecstatic when Insurance letter arrived informing of windfall settlement of  £110,000 insurance  after their  father's death - but were forced to pay it all back because it was the wrong man's money. Elaine Briscoe and Sandy Millington were delighted when the six-figure check arrived after a three-year battle to track down the missing pension of Robert Gent. They immediately split £40,000 between his four grandchildren - as former grave-digger Mr Gent had wanted - and spent around £20,000 more.  The sisters had spent three years in vain trying to get the pension for their father after he retired at the age of 65 in 2008. They had still not managed to track it down by the time he died three years later but vowed to continue looking for it in his memory. So they were overjoyed when Friends Life sent the check to their solicitors in October 2013; but  within a month their joy turned to horror when ‘Friends Life’ announced they had given them the pension belonging to another customer with the same name.  After spending much of the sum, the sisters were horrified to learn of the mistake and struggled to repay the total. They were recently forced to pay Friends Life £7,000 on top of the full amount paid back as the Insurance company threatened them with legal action.  The devastated pair were forced to sell their father's house - which they planned to keep as an investment - to repay the money they had spent. They also had to borrow from friends and other relatives to make up the full amount of £108,895 and paid it all back within a year, by last October. Still,  Friends Life took them to court earlier this month and obtained an order to get even more from them - £6,000 in costs plus £1,000 in interest. The company admitted making an error but said they were forced to launch legal action because the executors told them the money had been distributed and would not be repaid and the parties could not settle the matter amicably. Thus the botched Insurance payout cost the sisters an extra £7,000.  Going by the timeline, in Sept 2008, Robert Gent retired from grave-digging and while the sisters attempted to obtain father’s pension, he passed away in 2011.  Later in Oct 2013, Friendslife informed that they are owed £108,000 in their father's name. In Nov 13, after the amount was disbursed, Friendlife contacted the sisters informing that the payment was by mistake.  In Oct 14, the repayment is made after desperate borrowing and sale of house.  In Jan 15, the sisters are taken to Court and ordered to pay £6,000 in costs and £1,000 interest. The sisters are quoted as saying  'We got quoted a point of law which says that no one should gain from a mistake, which we accept, but surely no one should have to pay for one either. The Company is quoted as saying that the significant overpayment was a result of human error !! So, what is your say on this ?
With regards – S. Sampathkumar                                                                         4^th Feb 2015.