The Court of Appeal has ruled that a district judge was entitled to find that a civil claimant was fundamentally dishonest – despite the term not being expressed by the defendant during trial.

In Howlett & anor v Davies & anor, Lord Justice Newey backed the decision to throw out the claim after defendants raised suspicions about the details.

The personal injury claim followed a low-speed road traffic accident in March 2013 that was contested by insurer Ageas, which insisted the accident had been unlikely to cause injury.

The claimants, mother and son Lorna and Justin Howlett, now face losing qualified one-way costs protection and will be required to pay the defendant's costs.

Sitting in the county court at Portsmouth, deputy district judge Taylor held the claim was fundamentally dishonest and granted an adverse costs order against the claimants. This decision was appealed without success at Swindon County Court and the appeal moved on to the higher court.

The claimants argued that Ageas had not pleaded a case of dishonesty or cross-examined witnesses on that basis, and so the court could not make findings of dishonesty.

Lawyers for Ageas said the claim was the ‘stuff of fantasy’. Following a four-day trial, DDJ Taylor said the defendant did ‘make it clear that it is suggesting in the clearest possible terms to the claimants that they have not been honest’. The judge added that the claimants had been given ‘every opportunity’ to defend themselves.

Newey said credibility was ‘expressly stated to be in issue’ during the trial, and the defendant had listed a series of contentions about the claimants’ case. These included the occurrence of similar claims by them in the past, inconsistent or unlikely accounts of injuries, and the lack of any witnesses to the reported collision.

The Court of Appeal judge added that Ageas had not accepted the accident happened as described and suggested to the court it could find ‘elements of fraud’. Newey added the Howletts were given sufficient notice of the points Ageas intended to raise at trial and could not, in the circumstances, suggest they were ambushed in court.

He added: ‘The relevant points were, as it seems to me, adequately foreshadowed in Ageas’ defence and sufficiently explored during the oral evidence.’

Iain Davison, partner at national firm Weightmans, who represented Ageas in the appeal, said the ruling affirms that trial judges can make findings of fundamental dishonesty even when that expression has not been specifically pleaded. ‘The case will hopefully end any speculation as to what is required of an insurer when defending claims which are potentially dishonest,’ he added.