Fundamental dishonesty: a case study of exaggeration

This article was co-authored by Gurjinder Sidhu, Litigation Executive.

On behalf of the defendant insurer, Direct Commercial Limited, Kennedys recently secured a finding of fundamental dishonesty as a preliminary issue against a claimant.

Following a road traffic accident, the claimant dishonestly alleged an inability to walk without crutches or a limp, and inability to work despite surveillance and social media content to the contrary, self-publishing two books and working as a motivational speaker and parenting coach.

Background

On 21 September 2016, the claimant cyclist was struck and crushed by the defendant’s lorry.

The rear wheels of the HGV went over the claimant’s leg causing a crush injury with extensive de-gloving and multiple fractures requiring several surgical procedures.

Liability for the accident was admitted at an early stage. Proceedings were issued in September 2019 and served with a schedule of loss. The statement of case asserted that:

• She needs two crutches to mobilise outside the home
• She is practically unable to undertake shopping
• She has not worked since the accident.

Surveillance and intelligence

Due to discrepancies between the claimant’s records and her presented case, surveillance began in April 2018 and continued across multiple days in 2019, 2020, 2021 and 2022. Social media evidence was also collated by the defendant. In addition, the claimant’s own orthopaedic expert, who recorded his assessment, provided footage which proved to be instrumental.

Fundamental dishonesty proceedings

Once provided with the claimant’s witness evidence, the defendant successfully made an application to rely on the surveillance evidence to amend the defence and to plead fundamental dishonesty.

At the  costs and case management hearing (CCMC), the claimant, now a litigant in person, had secured assistance from a direct access barrister.  The claimant was directed to prepare a reply to the amended defence and a witness statement in response to the surveillance with a further CCMC to take place.

Within her reply, the claimant denied that she had portrayed herself as less capable than she was and that she had only ever provided a true and contemporaneous account of her abilities.

Supplementary expert reports and joint statements were obtained. The experts felt the material and footage was so inconsistent with the account and presentations given to them at their assessments that their original prognoses could not stand.

At the second CCMC, the defendant asked for the matter to proceed to a trial of fundamental dishonesty as a preliminary issue. The judge agreed.

At the trial in May 2024, the claimant was again shown all of the footage and taken through the relevant documentation she had previously seen.

Within his judgment, HHJ Saggerson applied Justice Ritchie’s approach for dealing with substantial injustice given in the case of Williams-Henry v Associated British Ports Holdings Ltd [10.04.24]. He found there to be no substantial injustice in dismissing the claim. He also found that the claimant had lied to her solicitors, experts, the court and to government agencies.

The claimant’s claim was dismissed. She was ordered to repay the defendant’s interim payments of £75,000, along with the defendant’s costs of the proceedings which included an interim payment of £50,000 on account. 

Comment

Where there are clear inconsistencies in the presentation of a claim, pursing a case for fundamental dishonesty is the most effective route to defeating a partly genuine claim in its entirety.

Here, the defendant accepted responsibility for the claimant having been seriously injured, that she might sometimes be troubled by discomfort and swelling, and that she had been distressed by the accident. However the picture presented by the claimant was not consistent with the surveillance evidence obtained by the defendant.

Early resolution is key to commerciality. In this case the proactive step was to try the issue of fundamental dishonesty first, given that the costs for both parties would have only increased if the issue was left to trial, which benefits no-one. It was also important to send a clear message to other dishonest claimants.

It is important that insurers choose the right fights – consumers inevitably pick up the cost of fraudulent claims when they pay increased premiums. 

The outcome was the result of strong collaboration between DCL, Kennedys and Counsel.

Direct Commercial Limited: Sue Crane and Carl Cripps

Counsel: Lois Aldred, and Angela Frost of 12 KBW