Almost exactly one year ago on 13 April 2015, a new rule on “fundamental dishonesty” in personal injury actions was implemented: under s57 of the Criminal Justice and Courts Act 2015 (CJCA 2015), where a court finds that a claimant has been fundamentally dishonest in relation to “the primary claim or a related claim”, the court “must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice”. It has now been reported that the first finding of fundamental dishonesty since the rule came into force has been secured.

In Hughes, Kindon and Jones v KGM1, heard on 1 April at Taunton County Court, all three claimants alleged they had suffered injuries lasting 12 months, despite what was a very minor incident involving the insurer’s policyholder. Several inconsistencies in the claimants’ evidence were demonstrated in that hearing, including the nature of injuries suffered, failure to seek medical attention and, in the case of one claimant, failing to mention the incident and injuries to their GP several months after the incident.

Deputy District Judge Eaton-Hart found that the impact was sufficient to have caused injury to Hughes and Kindon, but only for a period of two weeks, rather than the 12 months claimed. It was further demonstrated by the defendant insurer that during a medical examination six weeks after the accident the claimants had stated they were still suffering from injuries arising from the incident. Given that it had already been determined that the injury period lasted just two weeks, it was argued that the claimants had lied during their medical examination and stated by the Judge that they had presented a “deliberate inaccurate position... for financial gain”. The claims were thereby struck out in their entirety, losing the protection of qualified one-way costs shifting, with costs awarded in favour of the insurer.

This is a significant finding for the insurance industry and practitioners in general dealing with personal injury matters, which will provide precedent for decisions to come. In this case it was ruled that the claimants would not suffer substantial injustice from the decision (ruling out the exception set out in s57(2) of the CJCA 2015) and permission to appeal was refused. However, it remains to be seen how the concept of “substantial injustice” will be examined in subsequent decisions.