In negligence claims a claimant should not forfeit his entire claim because he has dishonestly claimed in respect of unjustified heads of loss. The rule which applies to insurance claims, recently illustrated in Axa v Gottlieb, that the entire claim is forfeit where it is tainted by dishonesty, does not apply where the claim is not made against insurers but they are merely picking up the bill. Sums already paid out to the claimant can be recovered by insurers where a claim tainted by dishonesty is made under a policy.
In this case, the claimant was involved in a car accident and claimed damages for injury and loss. After the insurers had paid £1,500 for damage to his vehicle, they discovered that the claimant’s claim for loss of earnings was fraudulent. The claimant had been dismissed from his job not because of the accident but because he had been caught stealing and the letter of dismissal he relied upon was forged. The judge refused to order the claimant to repay the £1,500 but rejected the fraudulent loss of earnings claim and the award of £1,800 for his injuries on the ground that his perjury concerning the former made his evidence about his injuries unreliable. He also ordered the claimant to pay the defendant’s costs on an indemnity basis.
Comment: this is a useful illustration of the different approaches taken to partly dishonest claims in insurance contract law and at common law. In practice, however, this case shows that the courts have ways of penalising the dishonest claimant in negligence claims although they have previously been less robust – see for example Molloy v Shell UK Ltd where the Court of Appeal failed adequately to penalise a claimant who had deceived his experts and fraudulently claimed for loss of earnings. In that case, Laws LJ commented that, when faced with manipulation of the civil justice system on so grand a scale, he doubted whether the court should entertain the case at all. This simple if harsh solution has not been adopted by the courts.