100 and counting! Counter Fraud success in Fundamental Dishonesty Findings - DAC Beachcroft

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100 and counting! Counter Fraud success in Fundamental Dishonesty Findings

Published On: 1 April 2016

Since January 2015 DAC Beachcroft's Counter Fraud Team has now recorded its 109th finding of Fundamental Dishonesty against claimants committing fraud. This includes a decision that successfully employed Section 57 of the Criminal and Justice Courts Act 2015 to secure a finding under these extended provisions.

We have saved our clients £1.2 million in fraud savings and recovered costs of £420,000.

This alert looks at what technical arguments the team have used to achieve these findings and an analysis of the claimant solicitors, courts, fraud types and claimant postcodes.

An Evidential Question

In most cases it is rare to have clear and compelling evidence of dishonesty (such as the surveillance footage obtained in Gosling).. In cases falling short of "very clear" evidence the court will have to consider whether in all the circumstances it is just and proportionate to call upon oral evidence from the claimant.

In applications relating to fundamental dishonesty we have experienced reluctance in the judiciary to make findings of fundamental dishonesty without the claimant being present, especially where the claimant has not been given prior warning that his honesty is being called into question.

Indeed, a judge who fails to allow the claimant an opportunity to present evidence as to their honesty may find themselves open to appeal, so most judges err on the side of caution.

When a claimant, who is lying about or exaggerating elements of a claim, is being cross examined, our objective is to ensure that we have laid the foundations to enable the advocate to "tie the claimant up in knots". The litigation strategy will be key to success and litigation tools such as Notices to Admit or Part 35 Questions to the medical expert must be carefully deployed and used to minimise the claimant's room for manoeuvre under cross examination.

It is vital in cases where the claimant can demonstrably be shown to be fabricating or exaggerating elements of their claim that a forensic approach to the documentary evidence is taken. To successfully obtain a fundamental dishonesty decision we must be able to walk the judge through the chronology of the claim, drawing out inconsistencies and pointing out where statements contradict other sources such as surveillance or social media.

Claimant Behaviours and Procedural Issues

We are having a significant degree of success in cases using the claimant's own social media output during the prognosis period and claimant profiling produced by our intelligence team. Having information relating to the claimant's social and sporting activities during the prognosis period, particularly where the claimant has provided evidence to the medical expert that these activities have been severely restricted, allows the use of Part 18 and 35 Questions to tie the claimant to their position and cause them difficulty when cross examined.

When claimants are then presented with the evidence of their own dishonesty, they typically discontinue close to trial. The discontinuance presents insurers with a number of choices around case strategy but where a matter is listed for trial and the claimant is on notice that their honesty and credibility will be in issue at trial, we are seeing some courts willing to utilise the allotted trial time to adjudicate on the question of whether the claimant has been fundamentally dishonest. This allows insurers to pursue the deterrent message in such cases at minimal additional cost as the resources required to hear the application on fundamental dishonesty have already been allocated to the claim.

There has been a wait for the first Section 57 finding and our April verdict was well received. This, and others, will send a message not only to Claimants and those representing them, but the industry as a whole. It is satisfying that the judiciary are now looking to dismiss the whole claim despite a possible genuine element rather than simply allowing the enforcement of costs and we expect the numbers of findings under the Act to increase over the coming months.