Fundamentally dishonest clause to impact insurance industry

Backed by insurers, a new law which brings hope to defendants fighting fraudulent claim has been passed in Parliament.

The Criminal Justice and Courts Bill contains a provision which requires courts to dismiss the whole of the claimant’s claim if it is satisfied that the claimant has been ‘fundamentally dishonest’.

For over two years BLM and Zurich have joined forces to keep the topic of fraud and fundamentally dishonest claims high on the agenda of the Ministry of Justice, the Law Commission and the Transport Select Committee.

According to BLM, the new law is likely to have a multi-million pound impact for insurers as well as for their customers, whose premiums have increased as a result of fraudulent claims.

David Spencer, partner at BLM and solicitor for the defendant in the litigation and appeal of Summers, said: “BLM continues to be at the forefront of fighting fraudulent claims and this legislation is a fitting conclusion to many years’ of hard work in the fraud arena. Honest claimants continue to have nothing to fear when this new law comes into effect. Claimants who are dishonest, and found to be so, should not be surprised to be heavily penalised, even to the extent of forfeiting their entire claim.”

David Southwell, head of personal injury claims at Zurich, said: “Dismissal of a ‘fundamentally dishonest’ claim might be thought a harsh sanction by some, but if its aim is to deter presentation of fraudulent claims from the outset, while at the same time sanctioning those few which might nonetheless enter the system, it can only be a positive thing. This outcome is potentially worth millions of pounds to our customers.”