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Having sat on both sides of the fence in this type of case, I can say that it has long been the case that Defendant lawyers, whilst admitting that a collision may have occurred, will contest everything else about the claim, very clearly implying that a claim is considered by them to be dishonest in some way, albeit without positively pleading fraud / dishonesty in the Defence.

If a Defence is properly stated, is it not for the Claimant to then prove their case, the issues in dispute? Just because a collision may have been admitted, does not always mean that it is accepted that a party has suffered any injury or loss as a result of it.

If a Claimant (or the lawyers) fail to spot and be alive to the real issues that may be in dispute in the case and the reasons why, then fail to prepare the claim accordingly, why should it not be open for a Judge to make appropriate findings? The issues in this instance would seem to have been clearly pleaded in the Defence.

Or is it being suggested that, just a little bit of exaggeration to a claim, seeking damages for a 6 month injury when the reality is more like a 6 week injury (if any injury at all in this case), a bit of extra padding to a claim for specials etc, is ok?

As commented below, you can blame insurers for a lot of things, but not the dishonest actions of a Claimant!