horwich farrelly

Horwich Farrelly Secures a New Type of Fundamental Dishonesty Ruling

April, 12, 2016

In a landmark case Horwich Farrelly, has successfully employed Section 57 of the Criminal Justice and Courts Act 2015 (CJCA) to secure the first finding of fundamental dishonesty under the extended provisions contained within the legislation. The matter, which involved three claimants including a professional boxer, saw the claims dismissed in full and an order to repay the insurer’s legal costs of £6,100.

Whilst some fundamental dishonesty provisions have been in place since the ‘Jackson Reforms’ of 2013, the CJCA 2015 provides much greater scope for sanctions to be applied to insurance fraudsters. Where a claim made after 13 April 2015 is found to be fundamentally dishonest in any part the court must now dismiss the whole claim – even if it includes a genuine element – unless to do so would cause ‘substantial injustice’.

A finding of fundamental dishonesty under the Act also results in the claimant automatically losing qualified one-way costs shifting (QOCS) protection, allowing a defendant to apply for recovery of its costs.

Boxer in silhouette

Round One: The Weigh In

In the case of Hughes, Kindon and Jones v KGM, heard on 1 April 2016 at Taunton County Court, all three claimants alleged they had suffered injuries lasting 12 months, despite what was a very minor incident with the insurer’s policyholder.

At the trial Horwich Farrelly, representing KGM, raised a number of inconsistencies in the claimants’ evidence. These included the nature of injuries suffered, failure to seek medical attention and, in the case of one claimant, failing to mention the incident and injuries to their GP several months after the incident.

Jones’s claim was struck out for failing to provide witness evidence, with costs awarded to KGM. However, Deputy District Judge Eaton-Hart found that the impact was sufficient to have caused injury to Hughes and Kindon, but only for a period of just two weeks, rather than the 12 months claimed. On this basis he initially awarded the pair £750 each in damages.

Round Two: The Counterpunch

Horwich Farrelly felt this was an unjust result given that, under QOCS, the insurer would liable for substantial legal costs defending what was, in essence, a grossly exaggerated claim. We drew the court’s attention to the fact that during a medical examination six weeks after the accident the claimants had stated they were still suffering from injuries arising from the incident. Given that the judge had decided that the injury period lasted just two weeks, it stood to reason that they had lied during the examination.

We therefore requested the claims of Hughes and Kindon be ruled as fundamentally dishonest under Section 57 CJCA 2015. DDJ Eaton-Hart accepted our request.

Round Three: The Knockout Blow

Striking out the claims in their entirety, he said that the two claimants had “presented a deliberate inaccurate position to the medical expert for financial gain”. He also ruled that the claimants would not suffer substantial injustice from the decision.

The claimants automatically lost QOCS protection and were ordered to pay the insurer costs of £6,100. The claimants’ solicitor sought permission to appeal but this was refused.


As well as being an excellent outcome for our client, KGM, and our London office, this is a very important result for the insurance industry as a whole. We were able to successfully utilise Section 57 CJCA 2015 to our advantage to have the claims struck out and come away with an enforceable costs order.

In the case of professional boxer, Michael Hughes, who was one of the dishonest claimants, Horwich Farrelly delivered the knockout blow by using the new rules regarding fundamental dishonesty to get the best result for our client.

Whilst we’re expecting to see the ‘substantial injustice’ clause of CJCA 2015 tested in the coming months, this result sends a clear message that we will use the full range of tools at our disposal to tackle dishonest claims.

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