What is ‘Fundamental Dishonesty’ and how will it impact on Personal Injury Claims?

In the Law Society Gazette this week (20th April 2015) the incoming president of the Association of Personal Injury Lawyers intends to turn the tables on insurers over ‘fundamental dishonesty legislation’. The Government has recently implemented new rules which prevent a Claimant receiving compensation if they have been found to be fundamentally dishonest, unless the decision will lead to substantial injustice (Criminal Injuries and Courts Act 2015).

What is fundamental dishonesty?

Where a Claimant had been dishonest in a personal injury claim which is fundamental to the case such as exaggeration of symptoms of the injury sustained in an accident then there is a possibility that the whole claim could be dismissed. There is no definition of fundamental dishonesty in the Act but in the Case of Gosling v Hailo & Screwfix (2014 County Court case) it includes significant exaggeration and/or misrepresentation of the extent of the ongoing symptoms.

The Law:

Section 57 of the Criminal Injuries and Courts Act 2015 places a duty on courts to strike out a personal injury claim if on application by the Defendant the Court is satisfied on a balance of probabilities that the Claimant has been fundamentally dishonest unless there would be a substantial injustice. The dismissal of the claim under Section 57 of the Act will only be considered if the Defendant makes an application. If a claim is struck out then the court is required to record the amount the Claimant would have received for any genuine element of the claim had it not been dismissed. The Claimant will then be required to pay the Defendant’s costs. The amount that is recorded for the genuine part of the claim will be deducted from the sum that the Claimant is required to pay.

As an experienced claimant solicitor I consider that there are risks for claimants in so far as there is no definition of fundamental dishonesty. If for example, a claimant makes a minor error in respect of the claim then there is a risk that the whole of the claim could be struck out. Claimants may feel deterred from making a meritorious claim and not getting access to justice. Claimants may decide to underplay their injuries for fear that they could be accused of exaggerating their symptoms. The only protection is where a Judge considers the Claimant would suffer a substantial injustice in striking out the entire claim. We will have to see how courts apply this in practice.

Link to Law Society Gazette website article:

http://www.lawgazette.co.uk/law/apil-chief-to-target-insurers/5048307.article