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Courts “making more” fundamental dishonesty rulings

McCann: only 60% of the costs orders have followed a court finding [1]

McCann: only 60% of the costs orders have followed a court finding

Court rulings of fundamental dishonesty, leading to the loss of protection of qualified one-way costs shifting, are not as rare as some suggest, insurance firm Horwich Farrelly has claimed, saying that it has secured more than 60 enforceable costs orders on fraudulent low-speed impact (LSI) claims alone since mid-2014.

Collectively there were worth more than £350,000 to insurers, with the largest award being £26,600.

Fraud partner Ronan McCann said the judiciary were initially slow to adopt the provision, but since last summer there has been a notable shift. The concept has now been expanded on through section 57 of the Criminal Justice & Courts Act 2015, which requires the court to throw out a claim found to be fundamentally dishonest.

Mr McCann said: “We are currently securing, on average, one fundamental dishonesty finding a week on suspect LSI cases. Some of these decisions have involved highlighting to the judiciary that claimants who would normally be considered as beyond reproach, such as teachers, have been fundamentally dishonest.”

He said that while 60% of the costs orders have followed a court finding of fundamental dishonesty the firm has also proven that cases do not need to be taken through to trial to secure a costs order. “We are also achieving great success with obtaining enforceable costs orders where the claimant discontinues proceedings in order to avoid a trial or the where a case is struck out,” Mr McCann said.

He added: “It’s an important achievement because it sends a very strong message to claimants tempted to make fraudulent claims – even if it’s ‘just’ inflating the amount claimed – that they could end up significantly out of pocket.”