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High Court takes firm line with dishonest claimant and awards damages for deceit

Posted: 12/02/2018

The delicate balance between allowing genuinely injured claimants to recover damages for their injuries and financial losses through personal injury claims and the perceived compensation culture is a difficult one. Worse still is the potential risk of encouraging fraudulent claims for financial gain. Unfortunately, a small percentage of people continue to bring unfounded or even dishonest claims resulting in higher insurance premiums for everyone else. It is important that these claimants are taken to task as a deterrent to others who might be tempted to follow the same route.

In the recent case of UK Insurance Ltd v Goundry [2018] EHWC 37 (QB), the court found that a claimant had been dishonest and took a hard line as a result. This was a case brought against the original claimant by the insurance company from which it had tried to recover damages.

The defendant had made a claim against the driver of a Peugeot, insured by UK Insurance, alleging that he had caused a collision with the defendant’s car, a Range Rover, and received damages. It later transpired that the defendant and the Peugeot driver were friends – and that when asked, the defendant had denied this fact. UK Insurance took the view that the accident was staged for financial gain and that the defendant’s claim was fraudulent. It claimed damages for deceit for sums in excess of £200,000.

It was for the claimant insurer to prove that the defendant had made dishonest representations in relation to the alleged accident and the court made it clear that a very high standard of proof was required before it would find that such dishonesty had occurred and award damages. The claimant insurer would have to exclude any substantial possibility that the collision was genuine. However, in this case the court felt that the standard of proof had been met, taking into account all the evidence and the conduct of the defendant, who would not give evidence about the collision in court, thus avoiding any cross examination. It gave judgment for UK Insurance against the defendant.

Philippa Luscombe, partner in the personal injury team at Penningtons Manches, comments: "This was a brave step by UK Insurance but the correct one. There is no doubt that the publicity given to injury claims and the availability of motor insurance for accidents involving road vehicles has triggered a stream of fraudulent claims – sometimes where the accident was genuinely the fault of another party but the injury / losses claimed are false and sometimes where the accident itself was staged. These claims have a significant impact – partly because undetected and commercially settled cases result in increased motor insurance premiums and partly because insurers develop a suspicion of claimants which can slow down claims generally. The fact that UK Insurance pursued this case and that the court in turn decided to award damages for deceit is a step forward in combating fraudulent claims. It should also give motor insurers the confidence to take similar cases forward."

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Penningtons Manches Cooper LLP is a limited liability partnership registered in England and Wales with registered number OC311575 and is authorised and regulated by the Solicitors Regulation Authority under number 419867.

Penningtons Manches Cooper LLP