Horwich Farrelly criticises APIL over 'fundamental dishonesty' comments

No one should criticise insurers where they correctly use all the tools at their disposal to tackle and prevent fraudulent claims, counters insurance lawyers

The Association of Personal Injury Lawyers' (APIL) claim that the principle of 'fundamental dishonesty' allows 'dishonest defences' from insurers has been rebutted by an insurance industry law firm.

Speaking at APIL's 25th anniversary conference, the group's incoming president, Jonathan Wheeler, singled out the Criminal Justice and Courts Act (CJCA) for its 'one-sided, draconian treatment of claimants' that are considered to be 'fundamentally dishonest'.

Section 57 of the CJCA requires a court to dismiss a personal injury claim where a claimant is shown to have been 'fundamentally dishonest'. Previously, a claimant could expect to recover the genuine element of a claim even if it was found that they had dishonestly claimed additional losses.

Wheeled criticised the principle, arguing that it didn't target dishonest defences from insurers.

'What about defendants who pursue "fundamentally dishonest" defences? Who says they haven't got crucial documents to disclose when they have? Who defend a claim for child abuse against a priest by claiming that, at the age of 15, my client consented to being raped by a 61-year-old man of the cloth? Is this an honest defence?' Wheeler asked.

However, law firm Horwich Farrelly has countered Wheeler's comments by arguing that he simply highlights the need for insurers to be clear on the cases they pursue.

'Defendants who raise a defence without merit can rightly expect to have their case thrown out and be penalised though Part 36 and Indemnity costs,' responded Ronan McCann, a fraud partner at Horwich Farrelly.

'I do not accept Mr Wheeler's suggestion that insurers would dishonestly raise a defence in the hope that a claimant would die before settlement. His comments illustrate a lack of understanding amongst some personal injury lawyers about the impact of fraud on honest policyholders.'

McCann continued: 'Even before the CJCA came into force we have not found the judiciary to have any problem with interpreting what constitutes fundamental dishonesty and in fairly applying such a verdict.

'The insurance industry is facing a real threat from fraudulent claims and the courts appreciate that being lenient on proven fraudsters is hardly fair to honest citizens. These enhanced legal powers aim to close the net on fraudsters - they are a charter for honest policyholders.'

'The real problem isn't insurers trying to get out of paying claims, as Mr Wheeler suggests, but the cost of fraud raising premiums for everyone. Unfortunately due to the sheer volume of insurance fraud we are left in a position where all claimants have their claims carefully scrutinised to ensure they are genuine,' added McCann.

'It is this that sometimes creates some friction, but no one should criticise insurers where they are correctly using all the tools at their disposal to tackle and prevent fraudulent claims. We should welcome the changes introduced by the CJCA as they will inevitably mean honest policyholders will get better value from their insurance cover.'

John van der Luit-Drummond is deputy editor for Solicitors Journal
john.vanderluit@solicitorsjournal.co.uk | @JvdLD