‘Fundamental Dishonesty’ clause splits profession

‘Fundamental Dishonesty’ clause splits profession

The legal industry has produced a mixed reaction over the introduction of a Clause into the Criminal Justice and Court Bill currently being considered in the House of Commons.

Clause 45 allows the Court to dismiss a personal injury claim if it is satisfied that the Claimant has been ‘fundamentally dishonest’. This was inserted into the Bill shortly before the second reading of the Bill by the House of Lords.

The Government justifies Clause 45 as being designed to deter and reduce dishonest claims. There have been recent announcements by the Government in an attempt to reform the personal injury industry, and it has stated that insurance companies have given assurances that the savings made by the introduction of measures such as Clause 45 will be  passed on to the customers (familiar words indeed)!

Criticism has been made by the Association of Personal Injury Lawyers (APIL) that this Clause has been inserted after the Bill was scrutinised by Parliament, prompting more loaded comments that the Conservative Government is working on the basis of information supplied by its friends in the Insurance industry.

The latest reading in the House of Lords on 23 July 2014, approved the insertion of the Clause, with Lord Hunt of Wirral noting that incentives and advertisements for personal injury claims are creating a ‘have-a-go’ culture and steps must be taken to rid the civil compensation system of this. Lord Hunt also recommended removing the word ‘fundamental’, arguing that all dishonesty is fundamental to a case and its inclusion would simply create avoidable ambiguity.

Some members of the legal profession hold the view that if personal injury lawyers conducted themselves properly and sought the necessary checks and evidence for their clients, then surely there is nothing for them to be concerned about.  If anything, it could be argued that it promotes better practice.

However many have argued that Clause 45 is legislating something which already exists – the judicial discretion of the Court to itself deal with dishonest parties by an array of means including cost orders or the striking out of claims. Then the further question arises, why should Clause 45 only apply to the Claimant? There lies the potential for Defendants to repeatedly argue a claim is dishonest, with no risks posed to them. Lord Faulkes dismissed this proposed amendment by Labour on the basis that Defendants are not in the same position as Claimants, and other actions are available to be brought against a dishonest Defendant. Herein lies the merry-go-round effect of leaving the decision as to whether or not to penalise a party at the Court’s discretion.