Is fundamental dishonesty going out of fashion? This is a question we are asked a lot by our clients and one which was addressed in our recent counter fraud conference. This claim is a paradigm example of how fundamental dishonesty has evolved since its implementation in 2015, and with an astute strategy and working in partnership with NFU Mutual has led to the dismissal of the whole claim.
The facts
The claimant was working as a subcontractor and alleged that he fell through a hole at the defendant's construction site whilst plastering on 7 August 2020. The defendant was the principal contractor on site. The claimant presented his claim based on an alleged breach of the Occupiers Liability Act 1957 in that they:
- Had failed to take reasonable care;
- Caused or permitted the hole in the floor to be or remain there;
- Permitted the hole to be a hazard and failed to make it safe;
- Failed to give any warning of the hole;
- Failed to fence off or guard the area; and
- Failed to devise or enforce any adequate system of inspection.
His claim was for £52,100 in damages and £62,292.74 in costs. The defendant denied breach of duty, causation and quantum.
Evidence
Documentary evidence for the defendant was in short supply. We had no risk assessments, no statements of works, no training records etc. There was a witness who confirmed that the claimant had turned up to work after the alleged accident complaining of a sore ankle.
The claimant's schedule of loss included loss of earnings in the sum of £25,836. He claimed that prior to the accident he was earning £12,198. We requested disclosure of the claimant's DWP records which showed that he had lied in respect of his pre-accident medical history. The claim was defended to trial on the basis that there was no breach and the claimant had exaggerated his claim, and had been fundamentally dishonest in respect of his claim for loss of earnings.
The claimant gave contradictory oral evidence which was unimpressive and confused, but the judge found that he had suffered a genuine injury to his ankle as a result of putting his foot into a hole and that the defendant had breached its duty of care to him. However, the judge also found that the claimant had lied and had been deliberately dishonest about his pre-accident medical history and his salary. The claimant claimed that he had injured his right hip in the accident but the judge found that this was a lie not honest misattribution. The judge also found that the claimant had been deliberately dishonest in respect of his pre-accident earnings.
Outcome
The judge found that the claimant's dishonesty in relation to both the injury to his right hip, and his claim for disadvantage on the labour market, was fundamental and dismissed the claim acceding to the defendant's application pursuant to section 57 of the Criminal Justice and Courts Act 2015.
The judge determined that, but for the dismissal of the claim, the value of the genuine injury and associated losses would have been:
- £16,000 general damages;
- £254 physiotherapy;
- £4,500 surgery costs; and
- £640 interest.
This was, therefore, to be credited against the award of costs made to the defendant. The judge ordered that QOCS should be set aside pursuant to CPR 44.16 (in respect of both the trial and an earlier adverse costs order) and that the costs should be assessed on the indemnity basis in a summary assessment. The judge made an order for costs against the claimant in the sum of £40,527.17, against which he was credited with the sum of £21,394, resulting in a balance of £19,133.17. The total saving is £114,000.
Impact
In our opinion, fundamental dishonesty isn't going out of fashion. Moreover, it is evolving. It would have been inconceivable in the early years after the implementation of section 57 CJCA 2015 that defendants would secure a finding of fundamental dishonesty in an EL/PL claim, without documentary evidence and with an admission or finding of breach of duty. We began to test new strategies, pleading fundamental dishonesty in claims where breach of duty was admitted and succeeded. Now, with the right evidence, the courts are prepared to make fundamental dishonesty findings where the accident is found to have taken place and where the defendant is in breach of its duty of care to the claimant.
Claire Laver, Head of Fraud - CSG said:
"Our counter fraud solutions continue to evolve to keep pace with the ever changing challenges insurance fraudsters bring. This is a fantastic outcome and one that would not have been possible without the combined tenacity, specialist strategy and determination of those at NFU Mutual and our counter fraud lawyers. "
Alex Baird, Department Manager – Claims Validation (Corporate Insurance), commented:
“This case demonstrates the importance of a consistently robust, evidence‑led approach to counter fraud and the role our people, processes and partnerships play in achieving the right outcomes. By identifying and investigating fraud risks early, and working closely with our specialist legal partners, we are able to make confident, proportionate decisions that protect NFU Mutual, our members and genuine customers. The finding of fundamental dishonesty reinforces our commitment to preventing and deterring fraudulent and inflated claims, while ensuring fair and transparent outcomes for those who claim honestly.”
For more information or advice, please contact one of our experts in our Casualty Fraud Team.
