Personal Injury: Unmerited Attacks On Claimant’s Honesty

Where an insurer alleges a personal injury claimant is pursuing their case dishonestly or fraudulently, they will need to prove it – or potentially face a costs penalty.  A recent ruling is reassuring for all honest clients. The injury lawyers at ParrisWhittaker in Jamaica, The Bahamas and the wider region partner are experienced in recovering compensation for injured individuals.

The UK’s Court of Appeal has issued an important decision¹ that should deter insurers from claiming fundamental dishonest on the part of a claimant.  The decision has important persuasive authority on the courts in Jamaica and the wider region.

What happened?

Following a road traffic accident, the claimants were awarded compensation for their injuries. The respondent insurer (AXA Insurance UK) denied liability and alleged fundamental dishonesty on the part of the claimants.

However, the trial judge was not impressed with the allegations and refused (at a preliminary hearing) to allow AXA to amend its defence to alleged fundamental dishonesty.

Although it could still raise ‘dishonesty’ at trial (only if appropriate) it did not raise it in the event; nor did the judge specifically address any suggestion of fraud or dishonesty on the part of the claimants.

The substantive claim succeeded at trial and AXA was held responsible for the claimants’ costs on the normal standard basis. They were also ordered to pay costs on an indemnity basis (which is more punitive) for a limited period of time (from the day before the trial started as the claimants beat an offer to settle).

Indemnity costs

However, the dishonesty issue arose in connection with the matter of costs. Particularly the claimants argued they should be entitled to costs on an indemnity basis from the date of the preliminary hearing, because of the failed allegations of fundamental dishonesty. The trial judge concluded that AXA’s conduct did not meet the threshold for indemnity costs.

The Court of Appeal reviewed the legal framework for awarding costs and the correct approach to indemnity costs. It helpfully clarified the position on a judge’s discretion whether or not to make an order for indemnity costs, including:

• The default position is for standard costs, unless the party seeking indemnity costs can demonstrate why they are appropriate in all the circumstances
• There is no presumption in favour of indemnity costs where unsuccessful allegations of fundamental dishonesty have been made
• The seeking party has a high bar to cross and must be able to show conduct that was “unreasonable to a high degree”
• The judge retains a complete and unfettered discretion on costs

Here, the appeal judges agreed that while AXA could be criticised for, this was not a case in which those criticisms should attract an order for indemnity costs (though other judges may have reached a different conclusion). The judge’s decision could not be described as perverse, ie one that no reasonable judge could have reached.

What does this mean?

Where there is no reasonable basis for alleging fundamental dishonesty against a complaint, the court may penalise the insurer/defendant in costs, but it’s within the judge’s discretion as to whether the bar has been crossed.

The decision should deter unmerited allegations of dishonesty which claimants will welcome.

How can we help?

Our specialist personal injury lawyers are experienced in dealing with insurance companies and where unreasonable allegations of fraud and dishonesty are raised. We take a robust approach to such claims – ensuring we protect the interests of injured individuals throughout their claim.

For advice on making your injury claim, contact the personal injury team at ParrisWhittaker on +1.242.352.6112 or  info@parriswhittaker.com

¹Hiren Thakkar & Others v Ioan Mican & AXA Insurance [2024] EWCA Civ 552