Mind The Gap: Unverified Claims And The Limits Of Section 26

Introduction

In May 2026, the Court of Appeal delivered its landmark judgment in Lynch -v- Motor Insurance Bureau of Ireland [2026] IECA 95. This decision is the first resolution of the Superior Courts in the Irish jurisdiction to address whether the provisions of section 26(1) of the Civil Liability and Courts Act 2004 can be extended to apply in proceedings where an unverified claim for loss of earnings is jettisoned without any explanation prior to the commencement of the trial. 

What Happened?

The Plaintiff suffered personal injuries in a road traffic accident (RTA) due to the negligence of an unidentified driver on 5^th of July 2015, commencing legal proceedings for personal injury seeking compensation thereafter. The primary issue for the High Court to resolve was the extent to which the Plaintiff’s capacity to continue work as a stonemason was reduced following the alleged injuries sustained in the RTA at issue. 

The Plaintiff submitted a loss of earnings claim of €621,388 (€210,249 in loss of earnings up to and including 3^rd of April 2023, and €410,139 in loss of future earnings), asserting that he was unable to continue his work. He further informed medical experts that the injuries allegedly sustained by him in the RTA of July 2015 had obliged him to cease his stonemasonry. However, in an attempt to contradict this claim, the Defendants had obtained surveillance footage of the Plaintiff participating in physical construction and DIY work in September 2020. 

The Plaintiff’s claim for loss of earnings was jettisoned the day prior to trial commencement, without explanation, in an updated particulars of injury and an amended schedule of special damage. Consequently, the Defendants brought an application under section 26 of the Civil Liability and Courts Act 2004 (s.26 of the 2004 Act), which provides the courts with the power to dismiss fraudulent personal injuries proceedings where “evidence” given is found by the Court to be knowingly false or misleading in any material aspect by the party.

Decision of the High Court

The Video Evidence

The High Court considered the video evidence produced by the Defendant, showcasing the Defendant’s ability to carry out physical labour despite his maintenance of the severity of his alleged injuries. The judgment of Mr Justice Kennedy on the 30^th of October 2024 accepted that while “legitimate concerns”¹ as to the accuracy, completeness and objectivity of the evidence presented by the Plaintiff were present and persisted in the case before the Court, the Plaintiff had not been “deliberately dishonest or evasive”² in his presentation of such before the High Court. The learned judge thus held that an order under s.26 of the 2004 Act dismissing a claim cannot be made if a witness is merely misguided. The test for this is subjective and based on the facts of the case, wherein Kennedy J found that the Plaintiff subjectively believed that he was not capable of working to a satisfactory standard.

Loss of Earnings Claim

The second ground of the Defendant’s application under s.26 of the 2004 Act concerned the unexplained withdrawal of the loss of earnings claim immediately prior to the trial. Kennedy J found that the Plaintiff knew that the figures included in the claim lacked basis, as the Plaintiff admitted under “robust”³ cross-examination that the figures he had produced as to the loss of earnings claim were “pie in the sky”.⁴ However, the claim was withdrawn prior to trial, the actuarial report was not entered into evidence, there was no accompanying affidavit of verification, and no evidence was given or adduced at trial in support of the figures. Thus, the High Court held that s.26 of the 2004 Act was not applicable. 

Order of the High Court

In regard to the claim advanced by the Plaintiff, the High Court was not satisfied that the Plaintiff’s injuries and employment capabilities were as detrimentally affected as the Plaintiff maintained throughout the proceedings. The High Court awarded the Plaintiff €45,000 in damages. Owing to the fact that this award fell within the remit of the Circuit Court, the High Court also made a differential costs order in favour of the defendant, who subsequently appealed the refusal of their application under s.26 of the 2004 Act. The Defendant appealed to the Court of Appeal, with the grounds of appeal being focused on Kennedy J’s refusal to grant their s.26 application.

Decision of the Court of Appeal

In considering the evidence adduced by the Plaintiff as to the extent of the injuries sustained by him in the incident at issue in these proceedings, and his subsequent ability to work as a stonemason as a source of employment, Mr. Justice Meenan in the Court of Appeal held that since the test under s. 26(1) of the 2004 Act for the dismissal of proceedings was subjective, this necessarily entailed an evaluation of the Plaintiff through examination and cross-examination.⁵ As such, the Court of Appeal held that it was not within the remit of the Court to interfere with this finding of fact by the High Court.

The Court then considered the issue of the unexplained withdrawal of the unverified loss of earnings claim advanced by the Plaintiff. The Court held that while the actuarial report for the figures advanced had been served with an accompanying affidavit of discovery, this was not the equivalent to the report being verified by means of an affidavit of verification. Therefore, the Court found an apparent lacuna in the s.26 application procedure, in that unverified losses being abandoned by parties in personal injury proceedings are not covered by the provisions of s.26 of the 2004 Act. The Court held that this ought to be addressed only by statute, rather than by judicial activism.⁶ Therefore, the appeal was dismissed.

Key Takeaways

The approach of the Court of Appeal and its findings in the present case provide grounds of concern for insurers, and indeed their respective policyholders, in raising a defence against a personal injuries claim. 

The Court of Appeal ultimately made clear that s.26 of the 2004 Act does not cover instances where a plaintiff decides to abandon an unverified claim for loss of earnings on the eve of the trial. This is unfortunate, as it appears that unverified claims which are “pie in the sky” can be maintained up to an advanced stage of the proceedings, and can then be subsequently abandoned, without being prejudiced by the dismissal of proceedings under s.26 of the 2004 Act. The only detriment to the plaintiff’s case is possible credibility issues in their presentation of their claim before the courts.

The decision of the Court of Appeal highlights the pressing need for legislative reform to s.26 of the 2004 Act to encompass unverified claims advanced by parties up to an advanced stage of the proceedings. Until such reform is affected, there is a burdensome strategic onus on insurers to progress litigation proactively and pressurise plaintiffs to verify any claims for special damages presented at the earliest possible opportunity.

Conclusion

It remains to be seen how the legislature responds to the decision in Lynch -v- MBI of the Court of Appeal. Nevertheless, it is clear that steps must be taken to bridge this gap in the law, as to fail to do so would be to place an overbearing burden on defendants to progress an action against them.

Footnotes

^{1. Lynch v. Motor Insurers Bureau of Ireland [2024] IEHC 587, at para 116Ibid., at para 119.}

^{2. Ibid., at para 116.}

^{3. Ibid., at para 34.}

^{4. Lynch v. Motor Insurers Bureau of Ireland [2026] IECA 95, at para 23.}

^{5. Ibid., at para 33.}