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Fundamental Dishonesty Rule Change

Industry News : 22 April 2015

Section 57 of the Act, which received Royal Assent in February this year, provides that if, on an application by the defendant, an otherwise successful claimant is found on the balance of probabilities to have been ‘fundamentally dishonest’ in relation to a claim, said claim must be dismissed unless the court is satisfied the claimant would suffer substantial injustice. APIL members meet in Newport last Thursday for their annual conference, where new president Jonathan Wheeler described the treatment of claimants as ‘draconian’ and appealed for insurance firms to come under the same scrutiny. ‘What about defendants who pursue fundamentally dishonest defences?’ he said in his keynote speech. ‘How about the defendant who purposefully sets out to delay a settlement on behalf of a terminally ill claimant, because it would be cheaper to pay out on the claim when they are dead? ‘Why aren’t such defendant practices also caught by legislation?’ If found guilty of fundamental dishonesty, not only will a claimant recover no damages but they would also lose the costs protection offered by qualified one-way costs shifting (QOCS), as a court finding fundamental dishonesty for the purposes of section 57 will find it for the purposes of Civil Procedure Rules 44.16, which allows for the displacement of QOCS costs protection, too.