Enforcement of costs orders: deterring fraudulent claims – Part 2

In my earlier blog on deterring fraudulent claims, I looked at the deterrent measures put in place by the insurance industry to combat fraud. This blog focuses on the enforcement options available to defendants to not only recover their outlay, but also how enforcement action can make the pursuit of fraudulent claims much less attractive for a would-be fraudster.

Adverse costs orders

Many fraudsters will pursue their claim on a no-win no-fee basis, believing that if it does not succeed there will be no financial penalty. However, a defence pleading fraud, or a finding of fraud, often causes the 'after the event' (ATE) provider to withdraw indemnity. In personal injury claims, many claimants will believe that qualified one-way costs shifting (QOCS) will protect them from paying the defendant’s costs, but of course in fraudulent claims, that is not the case. Part 44.16 of the Civil Procedure Rules allows for defendants to enforce their costs against a claimant where their claim is found to be fundamentally dishonest.

Some insurers use recovery actions not only as a way of recovering their outlay but also as a form of deterrent against that claimant or his associates bringing a further fraudulent claim. Being visited by bailiffs, surrendering assets, facing bankruptcy and having charging orders placed over property can have a devastating impact on an individual and sends out a strong message that fraud will not be tolerated. Many individuals who pursue fraudulent insurance claims are not wealthy. Few will have significant assets and many will be unable to pay an adverse costs order. As such, careful consideration should be given to the strategic use of enforcement methods to achieve the maximum benefit and deterrent effect.

The table below hopefully provides a helpful overview on the various means of enforcing an adverse costs order.

Charging order

Placing a charge on a debtor’s property to stop them selling charged assets without paying what is owed to the creditor.

Order for sale


To obtain an order for the holder of a charging order to take possession of a property to sell it to recover the debt.

Writ of control or delivery (bailiff)

A writ of control permits a High Court enforcement officer (HCEO) to take control and sell enough of a debtor's goods in order to satisfy a money judgment.

A writ of delivery permits the HCEO to recover specific goods or their assessed value.

Attachment of earnings order

Proportion of a debtor’s earnings are deducted by their employer and continually paid to the creditor until the debt is satisfied in full.

Application for a third party debt order

Sums in the possession of a third party owed to a debtor (i.e. a bank or building society) are frozen and seized to pay the debt.

Order to obtain information from a debtor

Debtor or other person required to attend court to provide information about their assets.

Statutory demand

Formal demand to request payment of a debt from an individual or company where a debt is undisputed.

(No requirement for a judgment to be obtained first).

Bankruptcy order


To make an individual bankrupt because the debtor owes sums to the creditor. (NB, a statutory demand is a pre-requisite).

Winding up petition

To apply to wind up a company if it cannot pay its debts to a creditor (a compulsory liquidation).

Fraud is often characterised as being an act borne of need or greed. For the former, inevitably those fraudsters often have little means to pay an adverse costs order. In the right cases, even where prospects of recovery are low, there can still be merit in pursuing enforcement action against a fraudster.

The effect of a claimant realising that they could potentially lose their home or have an HCEO take their possessions can be significant. The risk of facing such action is also very useful during the lifetime of a claim to remind a claimant of the peril of pursuing a fraudulent claim. In the right cases, and when credibly referenced, this can often result in the claimant abandoning his claim.

Watch our webinar on deterring fraudulent claims here.

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