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Insurance lawyers hit back at APIL claims over ‘fundamentally dishonest’ rule

McCann: a charter for honest policyholders [1]

McCann: a charter for honest policyholders

The new president of the Association of Personal Injury Lawyers was wrong to claim that insurers would dishonestly raise a defence in the hope that a claimant would die before settlement, a leading defendant firm has argued.

At last month’s APIL conference [2], Jonathan Wheeler said it was “anyone’s guess” what the new ‘fundamentally dishonest’ rule actually meant and asked why it only applied to claimants.

“What about defendants who pursue ‘fundamentally dishonest’ defences?” he demanded, citing examples such as “the defendant who purposefully sets out to delay a settlement brought on behalf of a terminally ill claimant, because it would be cheaper to pay out on the claim when they are dead, rather than alive”.

Ronan McCann, fraud partner at Manchester insurance firm Horwich Farrelly, said Mr Wheeler’s comments highlighted the need for insurers to be very clear on the cases they pursue.

He said that even before section 57 of the Criminal Justice and Courts Act 2015 – which requires a court to dismiss a personal injury claim where a claimant is shown to have been ‘fundamentally dishonest’ – “we have not found the judiciary to have any problem with interpreting what constitutes fundamental dishonesty and in fairly applying such a verdict”.

Describing the new power as “a charter for honest policyholders”, Mr McCann said: “Defendants who raise a defence without merit can rightly expect to have their case thrown out and be penalised though part 36 and indemnity costs.

“I do not accept Mr Wheeler’s suggestion that insurers would dishonestly raise a defence in the hope that a claimant would die before settlement. His comments illustrate a lack of understanding amongst some personal injury lawyers about the impact of fraud on honest policyholders.

“The real problem isn’t insurers trying to get out of paying claims, as Mr Wheeler suggests, but the cost of fraud raising premiums for everyone. Unfortunately due to the sheer volume of insurance fraud we are left in a position where all claimants have their claims carefully scrutinised to ensure they are genuine.

“It is this that sometimes creates some friction, but no one should criticise insurers where they are correctly using all the tools at their disposal to tackle and prevent fraudulent claims. We should welcome the changes introduced by the Act, as they will inevitably mean honest policyholders will get better value from their insurance cover.”