‘Dishonesty claims that fail should incur penalties’

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A personal injury lawyer who beat a ‘fundamental dishonesty’ defence to a claim has called for costs penalties for defendants who fail with the tactic.

Martin Littler (pictured), of Cobden House Chambers in Manchester, represented Carol Ravenscroft, who was awarded £3,500 at Manchester County Court last month after suffering injuries caused by a falling wardrobe at an Ikea store.

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The defendant sought to have the case thrown out, invoking new laws enacted last April, by saying the claimant was fundamentally dishonest and had injured herself trying to lift the wardrobe.

The judge said Ikea had taken a ‘stance of suspicion rather than sympathy’. This is believed to be one of the first cases in which a defendant has failed with a fundamental dishonesty defence.

Despite winning the case, Ravenscroft was not awarded indemnity costs or aggravated damages. Littler said his client had considered withdrawing her claim in light of the allegation.

Ravenscroft had been ‘incensed’ by the allegation but was also concerned that a finding of fraud would result in her losing her job, Littler said, adding: ‘Surely a defendant who fails to succeed with a defence based on fundamental dishonesty should receive a costs sanction.’

Littler suggested the problem will become more acute if the small claims limit for personal injuries increases to £5,000, as proposed by the government. ‘Parties are expected to operate on a level playing field. In cases where the claimant has no representation, the defendants will be able to “dig up the pitch”,’ he added.

Mikhail Kireev, operations manager at Ikea Warrington, said the company regretted that the accident in the store had occurred.

Readers' comments (19)

  • My company has seen an increase in fundamental dishonesty being pleaded by certain defendant firms usually signed off by a para- legal quickly followed by a drop hands offer. This is nothing short of bullying and I agree that there should be a penalty but I would like to see aggravated damages awarded, that would benefit the Claimant, a costs penalty would benefit only the lawyer.

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  • The court has the power to penalise a party for unreasonable conduct. If it was unreasonable to have argued fundamental dishonesty, the defendant will be penalised.

    I certainly agree with Martin Littler about unrepresented parties though. Also, when the SCL increases, there is considerable scope for insurers to abuse their position by threatening or pleading allegations of fraud/FD.

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  • The FRC regime should be dissaplied if FD is pleaded but not established: after all QOWCS is disapplied if FD is found.

    This should not be left to the DJ's discretion.

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  • YES MARTIN!!! WELL DONE TO YOU SIR

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  • And I also definitely agree with ANON 06:39am that there must also be an Award for Aggravated Damages made to the Claimant put in place, if nothing else, for the additional distress and defamation they have been forced to endure. As this situation cannot possibly be allowed to become merely a Gravy train for the Justice System.

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  • Couldn't agree more. Exemplary damages, indemnity costs? There is presently no control / constraint mechanism for this, moreso as Claimants do not have the same equality of arms.

    I wrote a letter to LSG on this in summer:-
    http://www.lawgazette.co.uk/analysis/letters/defendant-dishonesty/5050819.article

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  • why would 6 people disagree with Anon at 06.39, can they seriously think the Defendant should allege fundamental dishonesty with all that entails with no penalty if they fail?

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  • Seven now John. Perhaps they all work the defendants lawyers. I couldn't agree more that defendants who raise a fundamental dishonesty defence should suffer penalty if it fails.

    From what little we know about the case so far it seems as though this defence was simply made up. And IKEA have shown no remorse. Shameful.

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  • But hang on, if penalties were awarded against insurers would that not make the Government look a bit too even handed and therefore less than committed in their goal of denying justice...err I mean... stamping out fraud and the compensation culture. I would not see that going down very well at all with the insurance lobby. Nor the Daily Mail. Furthermore policy premiums would have to raise .Probably by £90 or more

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  • @2.59 and 3.44. Agree with you in principle, but perhaps those disagreeing with Anon @ 6.39 did so on the basis that a costs penalty is actually very important. The costs of fighting the application are likely to have exceeded the FRC for the entire claim.

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