Contrary to what some may believe, not every insurer and defendant lawyer believes that every claimant is a scoundrel out to fleece them and the system. Similarly, not every claimant is sinned against paragon of virtue deserving of unswerving belief. The true position, as with most things in life, does not lie at the extremes of any argument, but somewhere in between.
Insurers do not launch fundamental dishonesty-based defences as a tactic. The decision to plead them is not taken lightly, cogent and cohesive evidence being required.
However, while there are matters in which the issue of fundamental dishonesty is cut and dried there are many more where the issue is less definite and it will be for the court to interpret the totality of the evidence and the credibility of the witnesses in coming to its impartial determination.
As is evident from many previous decisions the courts are quite prepared to arrive at the conclusion that a claimant’s actions did not amount to fundamental dishonesty, examples including Cojanu v Essex Partnership University NHS Trust [2022] EWHC 197 (QB) and Elgamal v Westminster City Council [2021] EWHC 2510 (QB).
Following in the footsteps of these and other cases, but providing no new developments or change in the law was the decision of the High Court in Palmer v Mantas and Liverpool Victoria Insurance [2022] EWHC 90 (QB).
The law applied by the court in Palmer was precisely that established and applied in many decisions, namely that in order for Section 57 of the Criminal Justice and Courts Act 2015 to apply and the court therefore be required to dismiss the whole claim, it was for the defendant to satisfy the court that the claimant had been fundamentally dishonest (Ivey v Genting Casinos Limited T/A Crockfords Club [2016] UKSC 67. The test is a two-stage one in which a defendant must firstly establish on the balance of probabilities that the claimant’s conduct or behaviour has been dishonest, and secondly that it was fundamental (London Organising Committee of the Olympic and Para Olympic Games (in liquidation) v Sinfield [2018] EWHC 51 (QB).
Palmer v Mantas and Liverpool Victoria Insurance [2022] EWHC 90 (QB)
In Palmer the claim involved a road traffic accident on the M25 in which the first defendant (D1) collided with the rear of the claimant’s vehicle. D1 was uninsured: the second defendant (D2) was the s.151 insurer. An admission of liability was made with the issues of causation and quantum being determined at trial. The claimant alleged she had suffered, among other things, a mild TBI, Post-Traumatic Amnesia, Somatoform Symptom Disorder (SSD) and other physical injuries.
In advancing its argument that the claimant had been fundamentally dishonest, the court was provided by the defendant with a wide range of evidence sources including the claimant themselves, lay witnesses, medical experts, social media, surveillance, notes and records from the GP, hospital, other treating professionals, a case manager and the Department of Work & Pensions.
The fundamental dishonesty arguments failed in this case, the defendants failing to establish dishonesty with the judge finding the claimant “to be an honest, helpful, impressive and dignified witness.” Damages were awarded to the claimant in the sum of £1,679,406.
What is to be learnt from Palmer?
The reality is that Palmer changes nothing. There are no new principles, no new law, and no new tests; it is simply a case of the evidence advanced not satisfying the court.
The decision, however, can be taken as a reminder of the need to examine the evidence very carefully and consider not just whether it can be interpreted in a way as to support an allegation of fundamental dishonesty, but also whether there could be an alternative interpretation. It should also be remembered that evidence cannot be truly said to be neutral as D2 sought to argue in respect of the 17 days of surveillance evidence which was not relied on in Palmer. If it does not support one party’s argument then it is supportive of the other’s.
As regards evidence from social media, the judge in Palmer approached this evidence with caution noting that “social media tends to paint a glossy picture of the poster’s life” but could not be dismissed as “not real” or untrue as they were a reflection of where they were and what activity they were doing at that moment. In any given case the claimant may be doing no more than putting on a brave face in public, though it may be that they are displaying their true self and condition.
Even expert evidence needs to be carefully analysed. It is, of course, open for any expert to disbelieve a claimant when presenting with symptoms, but it is essential in reaching that conclusion that the expert considers all of the evidence and is able to explain why, in their opinion, they would favour one end of a range of opinion to another. Alleged “experts’ bias” is becoming a feature of scrutiny in these cases and an accurate summary of their instruction will be required, the avoidance of flowery or emotive language being a wise approach. The experts’ Part 35 duty is to the court and should not be departed from either intentionally or recklessly: it is incumbent upon them to consider all the material evidence and facts, including those that may detract from their opinion nor are in the best interests of the party who has instructed them.
A particularly difficult evidential issue is that of omissions. To what extent can a failure to provide information not asked for be interpreted as dishonest conduct? In Palmer there was a reliance by the defendant on the claimant’s failure and omission to report some information at the medical examinations, despite her not being asked directly for this information, the omission meaning that she was not giving a true description of her level of function. This was said to amount to dishonesty. The judge appears to have felt that the discrepancies were minor and on one specific occasion related to the claimant failing to volunteer she had been to Paris the weekend before the examination. This was also the inferred reason for her being tired at the examination, after the medical records were reviewed by the defendant’s expert.
This issue of failing to provide information has to be a matter of context and again requires review of the wider evidence. So, a claimant who failed to disclose working as a jump jockey, whilst complaining of lower back restrictions, an ice hockey player complaining of ongoing knee restrictions, or a claimant with a foot or ankle injury running marathons would certainly be the basis for an investigation for potential fundamental dishonesty.
Future claims handling
The decision in Palmer was made on the particular facts and evidence, the judge finding that despite some inconsistencies the claimant was honest. How a judge will assess a claimant as an individual and witness is inevitably an unknown quantity for a defendant, and with this in mind, assessment of the whole body of evidence on an objective basis is required to assess the risk and run the right cases.
In high value claims there are often many sources of evidence and it is important to review all of the evidence, test the evidence, fill evidence gaps where possible, as well as to identify and address the evidence that is not supportive. The benefits of s.57 are obvious but identifying and running the right cases is essential to avoid the high cost of failure.
At DAC Beachcroft, we implement a strategy with our counter-fraud and complex injury teams working together to conduct a balanced and complete investigation covering the usual causation and quantum elements appropriate to higher value cases, but also to considering and pursuing appropriate fraud investigations.
There is always a risk in running cases to trial but filling evidence gaps, testing the evidence and making a realistic and objective assessment will help minimise this.
From a fundamental dishonesty perspective building the evidence is key, but context is everything. It is important that all the evidence is considered, a balanced assessment done balancing the strengths of the case, and not too much weight is attached to individual pieces of evidence, as well as consideration of alternate explanations and evidence that favours the claimant.
