Insurers are adopting a zero tolerance approach to false and exaggerated claims. Tomás McDonagh looks at recent case law in the area.

Section 26 of the Civil Liability and Courts Act 2004 (“the 2004 Act”) is a powerful tool to enable defendants’ fight against fraud. Recent court decisions reveal the courts’ tougher stance with regard to exaggerated claims but suspicious claims remain difficult to defend.

The Motor Insurers’ Bureau of Ireland’s (“MIBI”) recent report “Fighting Fraud” highlighted the increasing problem of false and exaggerated claims. In the report, the MIBI has committed to adopting a zero tolerance approach to these types of claims. However, while there appears to be a similar view by the courts in relation to exaggerated claims, it remains difficult to prove fraud in suspicious cases as is evident in recent court decisions.

The Legislation

Section 26 of the 2004 Act requires a judge to dismiss a personal injury claim if a claimant knowingly gives, or causes to be given, false or misleading evidence unless the dismissal of the action would result in injustice.

Staged Accidents

An increasing number of Section 26 applications involve suspected “staged” claims where links may be established between claimants in separate vehicles, with the benefit of social media and other online resources. In Darragh & Ors v Feeney and Hertz Rent a Car Judge Meenan in the High Court held there was insufficient evidence to establish the collision was a “set up”. Although the claimants’ prior knowledge of each other to the court was less than forthright, it did not convince the judge the accident was staged.

Exaggeration

Judge Irvine in the Court of Appeal described the claimant’s dishonesty as “relentless” in the case of Platt v OBH Luxury Accommodation & Anor. The claimant sustained injuries as a result of a fall on the defendant’s hotel premises and presented as severely incapacitated due to his alleged injuries. Surveillance footage of the claimant, however, was in stark contrast to the claimant’s alleged incapacity. The Court of Appeal upheld the High Court’s decision to dismiss the claim commenting that the claimant acted in a “determined fashion” to seek a significant award. The court was satisfied that there was no injustice to the claimant.

In Lukasz Waliskzewski v McArthur and Company (Steel and Metal) Limited the claimant sought compensation for alleged injuries during the course of his employment but failed to disclose a subsequent road traffic accident in which he sustained injuries and received compensation, to either the defendants or their medical experts. Judge Barton, in dismissing the claimant’s claim, concluded the claimant misrepresented his injuries and was guilty of exaggeration. The judge was satisfied there was no injustice to the claimant.

Conclusion

Extreme vigilance is required on the part of defendants in successfully raising a section 26 application. It is clear from the decision of Judge Meenan in Darragh & Ors that more than circumstantial evidence is required in order to succeed in a Section 26 application. To successfully invoke Section 26 strong factual evidence and strong evidence undermining a claimant’s credibility at trial is required. Judge Irvine confirmed the courts view in Platt that relentless dishonesty on the part of the claimant in exaggerated claims is the type of claim that Section 26 sought to target.