Finding of fundamental dishonesty against claimant and defendant driver (Wise v Hegarty and Alpha Insurance)

Personal injury analysis: Convincing telematics evidence, coupled with evidence of social media links between the claimant and defendant, was sufficient for a road traffic accident claim to be dismissed and findings of fundamental dishonesty to be made against both the claimant and first defendant. Fundamental dishonesty will be pursued by an insurance company even if the finding is made against their own insured. Emily Formby discusses the case for Lexis PSL.

Wise v Hegarty (1) and Alpha Insurance A/S (2) [2019] Lexis Citation 413 What are the practical implications of this case? Fundamental dishonesty will be pursued by an insurance company even if the finding is made against their own insured. The fraudulent claim will sever the relationship between insurer and insured. Further, if a claimant has made a fraudulent claim walking away from the claim will not assist—discontinuing or simply failing to show up or engage further in proceedings will not prevent the judge, in the right case, from making enforceable rulings on fundamental dishonesty against the absent party.

Given that qualified one-way costs shifting (QOCS) protection does not apply once fundamental dishonesty has been proved, this may end up being an expensive claim attempt by both the exposed claimant and exposed first defendant.

If there is a risk of non-attendance of the claimant at any final hearing, make sure the evidence to be presented on the fundamental dishonesty point is as good as possible. The default expectation is that a judge will want to hear live evidence from a witness called to give oral evidence of the contents of their witness statement. Sounds simple? Of course, but in this case, the first defendant had been given the opportunity to provide a witness statement explanation of the telematics evidence—this was not produced. A second opportunity to give oral evidence during the hearing was also passed up—not surprisingly the judge concluded the failure to provide an explanation was the failure to have one.

What was the background? The claimant alleged she suffered minor injury (and a significant credit hire claim) in a road traffic accident on 7 February 2016. The accident was said to have been caused by the overtaking defendant's car. The defence accepted an accident but challenged the circumstances and denied liability. So far, so normal. However, the defendant's insurer investigated the accident with reference to the telematics system fitted in the defendant's car and came to the conclusion that there was a problem. Further investigation led to evidence of considerable social media links between the claimant and defendant. Accordingly, the defendant's insurer applied to be named as a defendant and to plead fundamental dishonesty against the claimant. Permission for Alpha Insurance to be added as a party was made and the allegation of fundamental dishonesty was pursued.

The issues Given warning of the allegation, the claimant did not attend the final hearing. The first defendant driver and the second defendant insurer were both present. Satisfied that the claimant had been notified of the hearing date, the judge allowed the claim to proceed. The first issue was whether the absence of a claimant should lead to the claim simply failing and being dismissed or whether the second defendant insurer could pursue a claim of fundamental dishonesty.

In the case of Alpha Insurance A/S v Roche and another [2018] EWHC 1324 (QB) the claimant discontinued when faced with the allegation of fundamental dishonesty. However, Justice Yip still allowed the allegations of fundamental dishonesty to be determined, relying on CPR 44 PD 12.4. Therefore, even abandoning the claim entirely did not remove the risk of determinations of fundamental dishonesty being made.

In this present case, the judge drew comfort from the continuation of the fundamental dishonesty allegations in Roche as being supportive of the decision to consider fundamental dishonesty in circumstances when the claimant had simply failed to appear for the hearing. Content the claimant knew the hearing was taking place, and so had failed to appear for presentational reasons, the court ordered consideration of the fundamental dishonesty provisions.

Here, the two defendants were at odds, one with another. The second defendant, the insurer, presented evidence that the court accepted, which proved that the car was not involved in an accident on the day in question (nor indeed the day before or after). Moreover, due to the information fed from the telematics scheme, the vehicle was not moving at the time of the accident and was confirmed by 15 out of 19 satellites(with only four needed to provide overwhelming proof) that the car was parked some miles from the accident site throughout this period of time.

What did the court decide? The claimant and the defendant driver had both been given the opportunity to explain this telematics evidence—and the defendant driver was present in court—but no explanation was forthcoming. The convincing telematics evidence presented by the technician in control of monitoring the technology, coupled with the (hearsay) evidence of the links between the claimant and defendant as shown by social media, was sufficient to convince the judge to dismiss the claim and make findings of fundamental dishonesty against both the claimant and first defendant.

Case details • Court: Middlesbrough County Court • Judge: His Honour Judge Gargan • Date of Judgment: 9 July 2019

This article was first published on Lexis®PSL Personal Injury on 25 November 2019