As insurers get to grips with the implications of section
57's definition of fundamental dishonesty, Clyde & Co's
Damian Rourke shows how the legislation can halt exaggerated
third-party claims early.
Three years ago, new legislation in England and Wales filled a
gap that has existed in third-party personal injury claims. In a
first-party claim, the duty of utmost good faith has always meant
that, in the event of a claimant behaving dishonestly, the claim
could be dismissed. But in third-party claims, the potential to
respond in this way did not exist – until section 57 of the
Criminal Justice and Courts Act 2015 (CJCA) introduced the concept
of fundamental dishonesty. This legislation handed insurers a new
weapon in the battle against dishonest claimants, but in the three
years since its introduction, relatively few have sought to use
it.
