Fundamental dishonesty “should lead to strike-out of whole claim”


Mallinson: Section 57 is open to some interpretation

A finding of fundamental dishonesty in a personal injury claim should mean an associated credit hire claim is also struck out, a circuit judge has ruled.

Horwich Farrelly, the Manchester-based insurance law firm which acted for defendant Aviva, said the decision that the whole claim should be struck out once fundamental dishonesty has been found in relation to part of it “has the potential to save the industry significant amounts”.

It would also increase the effectiveness of section 57 of the Criminal Courts and Justice Act 2015 as a fraud deterrent”.

Basir v Larizadeh was a motor claim in which the judge found the claimant “wholly unbelievable in relation to injuries” and therefore fundamentally dishonest under section 57, but still awarded £1,824 for the credit hire claim and the costs of that part of the case.

The judge interpreted the word ‘claim’ in section 57 as referring to the claim for injury and, as that was dismissed, there was no award of damages for the purpose of the Act and so the provision was not engaged.

His Honour Judge Saunders in Central London County Court allowed the appeal and dismissed the whole claim.

He said the first-instance decision would give “perverse results where a claimant who had completely fabricated their claim for personal injuries would be in a better position in claiming for vehicle damages than a claimant who had merely exaggerated their injuries”.

Aviva was awarded £19,000 in costs for defending the original proceedings and the costs of bringing the appeal on the indemnity basis.

Howard Grand, director of legal in Aviva’s general insurance division, said: “We must not return to the ‘bad old days’ where honest motorists were, in effect, forced to subsidise the actions of fraudsters through inflated premiums…

“This ruling will form an important precedent to ensure that the judiciary applies similar rigour when hearing cases where claimants fabricate their injuries. This should send a clear message to would-be fraudsters that the courts will not tolerate any part of an exaggerated or fabricated claim.”

Jared Mallinson, partner at Horwich Farrelly, added: “Poorly drafted and at times confusing, section 57 is open to some interpretation. It is crucial that the courts apply the ruling correctly to avoid cases where claimants can be found to be fundamentally dishonest yet still be awarded damages.

“The courts are, in the main, applying an eminently sensible approach in dismissing the entire claim when part of an injury claim is dishonest, no matter the make-up of special damages.”

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