Court of Appeal finds that insurers did not have to plead
"fundamental dishonesty" to deprive claimant of benefit
of QOCS
The claimants alleged that they had been injured in a car
accident caused by the negligence of the defendant. The insurer did
not accept that the accident happened (or that, if it did, not in
the way that the claimants alleged).
However, the insurer did not go so far as to plead fraud in its
defence. That is now a common approach for insurers, following
guidance given by the Court of Appeal in Kearsley v
Klarfeld [2005] that a defendant "does not have to put
forward a substantive case of fraud in order to succeed".
There are various reasons why insurers might prefer this
approach, including that they lack direct knowledge of the relevant
events and that their lawyers are subject to professional
obligations which result in them being slow to allege fraud.
