27 January 2015Print This Post

Insurers’ tactics to “remain the same” after fundamental dishonesty rule

David Spencer

Spencer: Rule will not become ‘stick’ to bear claimants

Insurers’ tactics are likely to “remain the same” after the introduction of the government’s new ‘fundamental dishonesty’ rule for personal injury cases, a leading defence lawyer has argued.

The government has promised that the rule, requiring courts to dismiss in their entirety personal injury claims which they find ‘fundamentally dishonest’, will become law before the May general election.

The measure is contained in the Criminal Justice and Courts Bill, currently awaiting Royal Assent.

David Spencer, partner at BLM, acted for the defendants in the leading case of Summers v Fairclough Homes [2012] UKSC 26, which considered whether a genuine claim could be struck out because of exaggeration. He said fraud in personal injury cases was already a “significant issue” and investigation methods were unlikely to change.

“We need to be careful as defence lawyers only to challenge cases where we have sufficient evidence,” he said.

“The concern expressed by claimant representatives that this statute will be a ‘stick used to beat every claimant’ is baseless.

“An application to dismiss the entire claim can only be made with evidence in support and the courts are unlikely to look kindly on defendants who offer a speculative plea.”

Mr Spencer said there were “delicate cases” where defence lawyers “could not quite get to the point of saying the claimant is a liar”.

He said that the defence may have “some video evidence” that a person who claims not to be able to work is capable of working but it may not be the kind of “smoking gun” you require.

“The first few test cases will set the boundaries as to when a claim is ‘fundamentally dishonest’”, Mr Spencer said.

He said that although the Summers case provided authority for the courts to strike out an entire claim at any stage for abuse of process, the courts could still award fraudulent claimants compensation for the “genuine” element of their claim.

Mr Spencer said the discretionary power “lacked consistency in its practical application” and the publicity around it had “a limited deterrent effect”.

By Nick Hilborne

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