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Matthew Perkins

Matthew Perkins


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Fundamental Dishonesty – An Inconvenient Truth?

Client Alerts29/01/2018

esure saves £1million in fundamental dishonesty case

In the latest case highlighting the impact of S57 of the Criminal Justice and Courts Act 2015, esure and Keoghs celebrated success following the withdrawal of a fundamentally dishonest claim in which the claimant had sought damages exceeding £1 million.

The case represents more positive news for insurers in the fight against exaggerated claims, hot on the heels of Aviva v Kovacic ([2017] EWHC 2771 QB) and LOCOG v Sinfield ([2018] EWHC 51 QB), providing further evidence of the wide-ranging scope of the legislation.

Motorcyclist Mr Samuel Mervin was seriously injured in an accident on 3 August 2014, with the 23 year old sustaining severe lower limb fractures leading to compartment syndrome and numerous surgeries. Liability was admitted early in the claim and esure funded extensive rehabilitation to supplement Mr Mervin’s NHS care. During the course of the claim suspicions arose regarding Mr Mervin’s credibility as he continued to report disproportionate limitations, sufficient to render him almost immobile, in need of substantial care, and completely unable to work. As a result esure commissioned a number of periods of surveillance.

Contrary to the limitations which he had reported to the various medical experts, in his witness evidence and his particulars of claim, the surveillance revealed that Mr Mervin was fully mobile, capable of riding and working on a motorcycle, and even engaging in home removal activities. Mr Mervin continued to insist that he was unable to ambulate without walking aids and even went through further unnecessary and painful surgeries to perpetuate his fraud, eventually serving proceedings which provisionally claimed around £825,000, with a likely fully particularised claim in the region of £1.5million.

Soon after service of his claim esure took the decision to plead that the claimant was fundamentally dishonest and to disclose the surveillance and the medical evidence which they had obtained, commenting directly on the disparity between the footage and his claimed limitations. When confronted with the pleadings, surveillance and expert evidence Mr Mervin took the decision to withdraw his claim with immediate effect, with no damages or costs being paid.

Commenting on the case, esure’s Head of Technical claims Steve Morrison said;

“esure operates a zero tolerance policy on any type of fraud and whilst fraud in serious injury cases is thankfully unusual, this is a great example of how to approach a claim when there are suspicions of fraudulent exaggeration by a claimant and an excellent outcome for our premium paying customers.”

Keoghs comment

This case has a number of important features which are of considerable significance for insurers when considering their approach in potential S57 cases involving exaggeration. In particular, despite his serious injuries and his decision to undergo unnecessary further surgery to perpetuate his fraud, the claimant was still prepared to drop his claim, rather than allowing his dishonesty to be further scrutinised via the court process. This decision is likely to have been a wise one in light of the guidance issued by the High Court in LOCOG, which reflects the hardening legislative and judicial attitudes to fraud.

Keoghs will be providing further comment on fundamental dishonesty in upcoming articles.