MoJ Defends Fundamental Dishonesty Rule

This article was published on: 08/21/14

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The Government have defended the newly imposed fundamental dishonesty rule, insisting that it could, not only, lead to a reduction in the number of personal injury claims being made but act as a deterrent to those considering making exaggerated claims moving forward.

Clause 45 of the Criminal Justice and Courts Bill has been met with much disdain from both the claimant solicitor and insurer lobby over, mostly over its vagueness as many struggle to establish just what being fundamentally dishonest really means.

But despite trepidation from those involved in the profession, the MoJ have stuck to their guns and passed the proposal through as they look for ways to continue to tackle fraud within the industry.

Speaking about Clause 45, the MoJ said: “The government anticipates that this will reduce the number of fundamentally dishonest PI claims, and the associated costs of paying compensation, which are met by insurers and by bodies such as the NHS, which are not insured.”

“In addition, as a behavioural response, the government expects that other PI claims may be exaggerated less, again leading to lower compensation paid by defendants.”

The justification for the enforcement of Clause 45 seems to be focused around reduced compensation payouts, a point that Scott Rees & Co Partner, David Byrne, has criticised.

He said: “When the clause for fundamental dishonesty was proposed, we were led to believe by the government that its purpose was to clamp down on those people bringing claims that were dishonest.”

“The problem that claimant solicitors like ourselves have is that it was too vague in it’s definition, leading us to question what exactly ‘fundamental dishonesty’ actually covers.”

“After the latest statement from the MoJ in regards to the motive for the clause, it is now easy to suggest that there maybe something more sinister going on here.”

“Talking about the clause meaning ‘lower compensation’ payouts make it easy to think that this is just another method to appease the insurance companies, rather than a genuine way of tackling fraud.”

“At the end of the day if bodies, such as the NHS, who the MoJ mentions, have committed negligence that has caused injury or illness to a claimant, then it is only right that they should pay compensation.”

“If the Government really wanted to tackle the problem of bodies such as the NHS paying large sums of money out, surely it would be more beneficial to look at the standards of care the NHS is offering or the way it is being managed.”

The MoJ insists that the fundamental dishonesty clause is only likely to apply to a small number of claims and that the amount of legal work required by claimant and defendant lawyers should remain relatively the same or maybe even less.

Explaining this they said: “It could be that less work is required to resolve some claims in future if the claim appears to defendants to be less exaggerated and if defendants accept the claim with less discussion and negotiation. Conversely it could be that the claimant lawyers devote more resource in future to demonstrating that a claim is honest.”

Reacting to this, David Byrne accused the Government of once again trying to paint claimant solicitors as the bad guys within the injury and ignoring the wide scale effect that defendant insurers have had on the fraud numbers.

He retorted: “It is clear that in thinking up such a clause the Government has once again made its mind up that the claimant solicitor is the cause of all things terrible within the industry.”

“This is almost laughable, considering that in reports carried out by their own colleagues, it was in fact revealed that it was the insurers who were using misleading figures in order to try and encourage further whiplash reform that was certainly not required.”

“Not to mention the fact that they were also found to being, I suppose what you could call, ‘fundamentally dishonest’ with some of the practices they were using in terms of repairing accident damaged cars, in order to cut costs and save their dwindling profits.”

“It is also worth remembering that there is an ongoing issue in regards to insurance companies making pre-medical offers to accident victims, which undoubtedly ramps up the number of fraudulent claims going through the system.”

“Yet it consistently the claimant that is called into question and all the explanation for this piece of legislation continues to do is point the figure at the accident victims for receiving compensation.”

“Perhaps if you look at it another way, if more defendants were encouraged by their insurance companies to accept the liability for their claims, then maybe claimants wouldn’t be forced to fight fire with fire and that would bring an end to any exaggeration being made.”

“Remember, no accident victim asks to be put in the situation where they are forced to make a claim, that is down to the defendant, but when they are it is only right that they are compensated by the person who has caused them so much discomfort and in most cases, lifestyle changes.”

The Government have insisted that no assumption has been made in regards to the aggregate reduction in compensation being paid as a result of some settlements being lower but they have stated that they believe it is reasonable to consider the prospect of a claim being dismissed without any compensation being paid may act as a deterrent to claimant who maybe considering exaggeration moving forward.

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