There are no statutory definitions of fundamental dishonesty and despite numerous commentators providing their views and explanations, we are still left without any real guidance as to when the aforesaid explanations will apply.
It appears that at present, the Courts are assessing fundamental dishonesty on a case-by-case basis. A recent decision was reflected in the case of Howlett v Davies whereby the Court of Appeal upheld a District Judge's finding of fundamental dishonesty in a road traffic accident claim, despite fraud not having been specifically pleaded in the insurer's defence.
Consequently, one - way costs shifting applied in accordance with CPR 44.16(1) and the Second Defendant was granted permission to enforce a costs order against the claimants.
Contrary to the aforementioned, the case of Zurich Insurance Plc v Bain asserts the power regarding costs afforded by CPR 44.16 will not always be exercised. In this instance, his Honour Judge Freedman considered the meaning of fundamental dishonesty and concluded that it did not extend to situations where the Claimant has simply exaggerated or embellished their claim. He accepted that the claimant was generally speaking, an upright and honest member of society. Ultimately, the best person to assess the issues surrounding fundamental dishonesty is the Judge that hears both the Claimants and the Defendants evidence. Any criticism of a tougher line on fundamental dishonesty may seem ill - placed and is not likely to be well received in the insurance or law enforcement circles. The rule of thumb remains that any allegations must be buttressed by evidence.