minor impact = body injury?

My nephew rear ended a car at the stop sign. There was no visible damage to any car. However, the other driver filed a body injury claim. An adjuster told my nephew that the total property damage for the other car was $300 and it is unlikely that they collect on the body injury claim. However, after a year and a half we learned that there is an accident on his record with $300 in property damages and $2000 for body injury. I contacted his adjuster and asked if they ever referred the claim to an investigator or if any kind of investigation was done, he answered no. It seems pretty odd to me that any body injury claim with property damage of a little over $300 stands a chance. Seems odd because most insurance companies follow the policy: low property damage = no injury I don't think my nephew was represented well by the insurance company. It's obvious that the guy who filed the claim was a crook and the body injury claim was a fraud. I'd like to take some actions; the money is not the issue. What are our options? What type of lawyers would be the best for the issue?

Thank you