When an insurer obtained evidence that a claimant had fraudulently misrepresented the extent of his injuries in a personal injury claim that was settled in 2003, it took the case all the way to the Supreme Court to obtain a repayment.
The original claim was settled for £135,000, despite the fact that Zurich insurance had doubts about its veracity. However, the company took the view that, on the basis of the evidence then available, there was a substantial chance that it would lose if it defended the claim, so the settlement was agreed.
After acquiring evidence that the claim was exaggerated, Zurich obtained a court order that more than £120,000 should be repaid, but the original award was reinstated on appeal. Zurich then appealed to the Supreme Court.
At the heart of the decision was whether or not Zurich had relied on the original and fraudulent evidence in making its settlement. Had the insurer not done so, the settlement would stand. However, the Court concluded that, despite having doubts about the veracity of the evidence, Zurich had relied on it.
The decision is likely to lead to insurers who have made sizeable settlements based on flimsy evidence taking steps to ascertain if the settlements were made on the basis of fraudulent claims and, if so, attempting to reopen the legal proceedings.
The Criminal Justice and Courts Act 2015 gives the court the ability to dismiss a claim for damages if it concludes that the claim is fundamentally dishonest.
There has long been a feeling in some quarters that personal injury cases where the seriousness of the injury has been exaggerated are relatively common and steps must be taken to limit the 'compensation culture'. However, any claimant with a genuine injury which has resulted from the negligent action or failure to act of another should not be deterred from pursuing a claim. The court system exists to provide justice for all and, with strong legal representation, a fair settlement should be the result.