An insurance firm says it has forced two claimants to drop £25,000 personal injury claims after invoking the new fundamental dishonesty defence.

An AXA customer had registered a claim explaining that their passenger had opened a door which made light contact with a neighbouring vehicle.

The driver of the third-party vehicle initially confirmed this version of events, but subsequently submitted a personal claim along with his passenger. The claims for cervical spine (neck) injuries were both supported by medical evidence showing a 12-month prognosis.

AXA investigated the claim because of the minor nature of the impact, and subsequently entered a defence to the litigation pleading that both claims were fundamentally dishonest.

The defence was one of the first-known occasions that an insurer has used powers created by the Criminal Justice and Courts Act 2015, to have a claim thrown out in total if it is proven the claimant was fundamentally dishonest.

On this occasion, the claims were withdrawn and AXA was awarded costs of more than £18,000 against the claimants.

Kerry Underwood, founder of Hertforshire firm Underwoods Solicitors, said: 

‘This reinforces my view that section 57 of the Criminal Justice and Courts Act 2015 is a game-changer; that was clearly Parliament’s intention and those personal injury lawyers who take the view that it will only be of relevance in very large cases are plain wrong. Portal claims are now running at about 845,000 a year and that is where the money is won or lost as far as insurers are concerned. Big cases form a tiny percentage of personal injury work, and that is why the insurers concentrate their firepower on low value, high-volume cases such as whiplash.

‘This case demonstrates that personal injury lawyers, whatever type of work they do, need to take section 57 very seriously indeed.’