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Fraudulent or Exagerated Claims in Personal Injuries

14/07/2015

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Ireland

The Civil Liability and Courts Act, 2004 (“the 2004 Act”) was designed to revolutionise the handling of personal injuries claims.  One of the core objectives of the 2004 Act was to deal with fraudulent and exaggerated insurance claims.

Section 26 of the 2004 Act requires the Court to dismiss a personal injuries claim where the Plaintiff knowingly gives (or causes to be given) evidence that is false or misleading in any material respect, unless dismissal of the action would result in an injustice.

Section 26 has been brought before the courts by insurers on many occasions. Killian O'Reilly, Partner in the Dispute Resolution and Litigation Unit, explores the manner in which the provision has been applied and why this has made it challenging for insurers to know when to rely on it or not.

A recent example of a case which was dismissed is Lukasz Waliszewski –v-  & Company (Steel & Metal) Limited [1] in which judgment was delivered in the High Court on 24 April 2015.

The Plaintiff was employed as a general operative at the Defendant’s Blessington site.  He alleged that between July 2006 and September 2007, he was required to drive a side loader unit on a constant basis over uneven surfaces. He claimed that the side loader unit was not designed for such use. He alleged that he was subjected to “whole body vibration” which, together with the necessity for him to twist his body in his seat in order to face the lifting fork of the side loader, caused him a back injury.

At the trial of the action, it transpired that the Plaintiff had subsequently been involved in a road traffic accident in December 2010. Initially, this was not disclosed in Replies to Particulars and was not disclosed by the Plaintiff to the doctor retained by the Defendant’s insurers to examine the Plaintiff.

The normal Affidavits of Verification had been sworn by the Plaintiff. When the claim initially came on for hearing, an issue arose in relation to the subsequent road traffic accident and the Plaintiff attempted to mend his hand in relation to his pleadings.

It emerged that the Plaintiff had brought a separate claim in respect of the Road Traffic Accident.  He alleged that he had suffered a back injury as a result of that accident.  He issued separate proceedings which he settled in November 2011, using the same firm of solicitors.

Judge Barton concluded that:-

“on the evidence, therefore, the Court cannot come to any other conclusion but that the Plaintiff, in withholding information from his solicitors in January 2011 in relation to the occurrence of the accident in December 2010 and the injuries – including an injury to his lower back – sustained by him as a consequence of that accident, must have known that the replies which were given, insofar as they related to any subsequent accident, were incorrect and that this was so when he swore the Affidavit of Verification in relation to those replies.”

The Judge characterised Section 26 as:-

“a provision which places in the hands of a Defendant a weapon to attack and destroy a Plaintiff’s case ….” 

He went on to say:-

“when successfully invoked, there are serious and potentially penal consequences for the Plaintiff.  Accordingly the provisions of the Section must receive and be given a strict construction.” 

Judge Barton concluded that the Plaintiff had misrepresented his injuries and was also guilty of exaggeration. The claim was dismissed in its entirety since there was no evidence that doing so would represent an injustice.

Since Section 26 covers conduct that may occur during the litigation process or at a trial, it does not need to be expressly pleaded by a Defendant and can be raised at the conclusion of the Plaintiff’s case, as it was in this case.

Key Considerations: Fraudulent or Exaggerated Claims

It is worth bearing the following points in mind in relation to claims where a Defendant considers fraudulent or exaggerated evidence has been tendered:

  1. The burden of proofs rests on the Defendant who must satisfy the requirements of Section 26 on the balance of probabilities. [1]
  1. Where a Defendant invokes Section 26 inappropriately, the Defendant may be liable for both aggravated and exemplary damages. [2]
  1. Where the Court is satisfied that the requirements of Section 26 have been met, then the provisions of Section 26 are mandatory. Therefore, the Court is required to dismiss the Plaintiff’s claim, in its entirety – unless dismissal of the action would result in an injustice being done.
  1. The false and misleading evidence necessary to satisfy the requirements of Section 26 must relate to evidence which is material to the Plaintiff’s claim. It follows that if evidence has been tendered by or on behalf of the Plaintiff which is false or misleading, the entire claim may not be dismissed.

Main Reasons for Dismissal

In our experience, the main reasons for dismissal of cases under Section 26 are often one or more of the following:-

  • Likeability of witnesses and the overall profile of the claim.
  • Previous injuries not disclosed.
  • False loss of earnings claims.
  • Very damaging private information investigator footage.
  • Consistent untruths in evidence of a serious and material nature.

Very few claims present insurers with an absolutely clear case of fraud or exaggeration.  In every case, an assessment must be made, often at short notice during the course of a trial.

In the Waliszewski case, the Defendant’s insurers took a risk in bringing the Section 26 application since they faced an award of aggravated and/or exemplary damages if the application was unsuccessful.

Pleading Section 26 requires courage and can backfire. That said, it is one of the few provisions of the 2004 Act that can be used to discourage fraudulent and exaggerated claims.

Note: This article was published in the July 2015 Issue of Irish Broker Magazine 

[1] [2015] IEHC 264

[2] Aherne –v- Bus Eireann [2011] IESC 44 and Meehan –v- BKNS Curtin Walling Systems Limited & Anor. [2012] IEHC 441 and Salako –v- O’Carroll [2013] IEHC 17

[3] Lackey –v- Kavanagh [2013] IEHC 341