The case, Basir v Larizadeh, initially went to trial in May 2018 when, following a motor accident, the claimant, Mr Basir, presented claims for personal injury as well as special damages for vehicle damage and credit hire. Despite the Judge ruling that Mr Basir’s claims for personal injury were "wholly unbelievable in relation to injuries” and therefore fundamentally dishonest, he was still awarded £1,824 for the credit hire claim as well as costs.
Given the finding of fundamental dishonesty for the personal injury claim, Horwich Farrelly urged the Judge to dismiss the entire claim under Section 57 of the Criminal Courts and Justice Act 2015 (“Section 57”). The Judge interpreted the word 'claim' in Section 57 as referring to the claim for injury and, as that was dismissed, there was no award of damages for the purpose of the Act, thus Section 57 was not engaged.
Unhappy with this outcome, Horwich Farrelly, on behalf of Aviva, appealed the decision on the basis that the law on Section 57 had been misapplied. The appeal hearing took place in Central London County Court, before His Honour Judge Saunders.
Finding that the trial judge had been wrong in his interpretation of Section 57 and had misinterpreted the legislation by awarding the claimant damages (and, therefore, costs) for the credit hire claim, HHJ Saunders allowed the appeal and dismissed the whole claim.
He commented that the decision of the lower court would give “perverse results where a claimant who had completely fabricated their claim for personal injuries would be in a better position in claiming for vehicle damages than a claimant who had merely exaggerated their injuries.”
It is now clear that Section 57 applies to the whole of the claim and any damages claimed in the proceedings, whether related to the injury or not, can be dismissed on a finding of fundamental dishonesty.
As a result of the successful appeal, Aviva was awarded the costs of defending the original proceedings and the costs of bringing the appeal on the indemnity basis. The costs totalled over £19,000 which are enforceable directly against the Claimant.
Howard Grand, Director of Legal General Insurance, Aviva, said, “We are pleased with the appeal judge’s finding in this important case. We must not return to the ‘bad old days’ where honest motorists were, in effect, forced to subsidise the actions of fraudsters through inflated premiums.
“Aviva campaigned tirelessly for whiplash reforms, known as the Civil Liability Act, which will reduce the incentive for fraudsters and opportunists to exaggerate or fabricate their injuries. This ruling will form an important precedent to ensure that the judiciary apply similar rigour when hearing cases where claimants fabricate their injuries. This should send a clear message to would-be fraudsters that the courts will not tolerate any part of an exaggerated or fabricated claim.”
Jared Mallinson, Partner at Horwich Farrelly said: “We are extremely happy that we persevered with this case on behalf of Aviva and it resulted in a successful appeal. Poorly drafted and at times confusing, Section 57 is open to some interpretation. It is crucial that the courts apply the ruling correctly to avoid cases where claimants can be found to be fundamentally dishonest yet still be awarded damages.
“The courts are, in the main, applying an eminently sensible approach in dismissing the entire claim when part of an injury claim is dishonest, no matter the make-up of special damages. However, it has been argued that this interpretation is wrong and only the losses associated with the injury claim ought to be dismissed. In finding that this argument is wrong, this judgment increases the effectiveness of Section as a deterrent to fraudulent claims because fraudsters can no longer expect to recover some damages even if they are found to be fundamentally dishonest.
“This is a great example of how we work closely with the insurance industry, going to great lengths in order to stop fraudsters in their tracks and ensure that the courts are on board. This ruling can be applied in future cases to ensure that both consumers and insurers benefit from the costs saved on unmerited claims.”
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