Rely on the most comprehensive, up-to-date legal content designed and curated by lawyers for lawyers
Work faster and smarter to improve your drafting productivity without increasing risk
Accelerate the creation and use of high quality and trusted legal documents and forms
Streamline how you manage your legal business with proven tools and processes
Manage risk and compliance in your organisation to reduce your risk profile
Stay up to date and informed with insights from our trusted experts, news and information sources
Access the best content in the industry, effortlessly — confident that your news is trustworthy and up to date.
With over 30 practice areas, we have all bases covered. Find out how we can help
Our trusted tax intelligence solutions, highly-regarded exam training and education materials help guide and tutor Tax professionals
Regulatory, business information and analytics solutions that help professionals make better decisions
A leading provider of software platforms for professional services firms
In-depth analysis, commentary and practical information to help you protect your business
LexisNexis Blogs shed light on topics affecting the legal profession and the issues you're facing
Legal professionals trust us to help navigate change. Find out how we help ensure they exceed expectations
Lex Chat is a LexisNexis current affairs podcast sharing insights on topics for the legal profession
Discuss the latest legal developments, ask questions, and share best practice with other LexisPSL subscribers
Claire Laver, partner in the claims solutions group at DAC Beachcroft, comments on the recent case of Shahid v Puddick and considers whether it opens up a new avenue for insurers in the fight against fraud.
The compensation culture in England, Wales and Northern Ireland has reached epidemic proportions and the judiciary has indicated that legislation is necessary to empower them to discourage fundamentally dishonest claims and ensure that compensation is
only awarded in cases of genuine and reasonable claims. This legislation introduces a provision to require the court to dismiss in its entirety any claim where it is satisfied that the claimant has been fundamentally dishonest, unless it would cause
substantial injustice to the claimant to do so. It was anticipated that the main effect of the reform would be the wider behavioural impact of discouraging claimants from making exaggerated claims.
In the recent decisions the court were asked to consider dismissing claims brought by phantom passengers, dismissing the genuine personal injury claims brought by genuine occupants who have supported the presence of phantom passengers, dismissing genuine
vehicle related loss claims and dismissing claims in their entirety where there has been a finding of fundamental dishonesty pursuant to CJCA 2015, s 57. The new legislation has empowered the court to move away from principles of tort and the decision
in the case of Ul-Haq v Shah  EWCA Civ 542,  1 All ER 73 in circumstances where the claimants are found to be fundamentally dishonest.
The courts were asked to consider the strength of the oral evidence of all the parties. In each case the strength of the defendants’ oral evidence was crucial. Adverse evidence affecting the claimants’ credibility along with inconsistent medical
evidence was also adduced. On the whole the defendants’ evidence was preferred to the extent that the court felt they could make such a finding pursuant to CJCA 2015, s 57.
There has been a flurry of legislation and common law decisions in the last 18 months which deal with fraudulent insurance claims to include CJCA 2015, s 57 and section 12 of the Insurance Act 2016. The Supreme Court decision in Versloot Dredging BV and another v HDI Gerline Industrie Versicherung AG 
UKSC 45,  3 WLR 543, and our case of Hayward v Zurich Insurance Company plc  UKSC 48,  3 WLR 637, have aligned the way insurance claims are dealt with and provide a consistent deterrent message. Organised fraudsters have changed
their tactics by presenting claims in areas of insurance other than motor and by using professional enablers in an effort to circumvent detection and fixed costs implemented by the civil justice reforms. These changing tactics will require a higher
dependence on data analytics and expertise in handling claims fraud across a multitude of product lines.
Insurers should feel comforted by the new legislation. For phantom passenger claims securing the strongest possible evidence as early as possible from the insured will be key to the strategy set for defending the claim. Consideration should be given as
to whether liability should be admitted. The timing of any admission will also be key. Arguably compensation should not be paid to the genuine claimant who supports a bogus passenger claim because there is now the possibility that his entire claim
will be dismissed if he is found to fundamentally dishonest by supporting the presence of a phantom passenger. Continue to try to secure other adverse credibility evidence and plead defences accordingly.
Interviewed by Anne Bruce. The views of our Legal Analysis interviewees are not necessarily those of the proprietor.
Free trials are only available to individuals based in the UK
* denotes a required field
**excludes LexisPSL Practice Compliance, Practice Management and Risk and Compliance. To discuss trialling these LexisPSL services please email customer service via our online form. Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason. Trial includes one question to LexisAsk during the length of the trial. See our full terms here.
Access this article and thousands of others like it free by subscribing to our blog.
Read full article
Already a subscriber? Login
0330 161 1234