Fundamental Dishonesty

Parvez v Calpe Insurance Company Ltd- XS Direct Insurance


I set out below details of a claim reported in Insurance Times. If anyone is aware of the identity of the CHO or their solicitor or counsel, could they make contact with me? I am aware of a claim involving similar legal issues that is currently being appealed and it may be useful the two firms speaking. Likewise, if anyone has a copy of the judgement, that too would be appreciated.


“The judge found this type of dispute to be ‘a convenient camel for hire companies to ride across the plains’


A court has ordered a credit hire company to pay 90% of a defendant’s costs after a personal injury claim was found to be fundamentally dishonest.


The case, Parvez v Calpe Insurance Company Ltd- XS Direct Insurance, involved claimant Mohammed Masud Parvez, who bought claims for personal injury, recovery, storage and credit hire following a motor incident on 1 February 2018 – his claim was pleaded up to a value of £17,000.


This included credit hire totalling £14,706, while storage and recovery costs amounted to £1,590 via Apex Recovery and Paloma Car Hire.


However, liability, causation and quantum were all disputed by the defendant and the case - which was being handled by DWF Law - proceeded to trial on 25 March 2021. Here, Recorder Lambert QC dismissed the claim after finding the personal injury element to be fundamentally dishonest.


As a result, the entire claim was struck out and the claimant was ordered to pay the defendant’s costs.


Taking a robust stance

Due to the claimant being unlikely to afford the defendant’s legal costs, the defendant was forced to pursue the credit hire company involved in the case.


The case therefore proceeded to a further hearing on 6 August 2021 – the credit hire company was then ordered to pay 90% of the defendant’s costs, rather than the claimant.


The judge described this this type of litigation as ”a convenient camel for hire companies to ride across the plains until they are brought to an oasis and can drink water from defendant insurers”.


Victoria Hughes, fraud manager at broker XS Direct Insurance - which was involved in the legal action - said: “I want credit hire companies and others hoping to profit from claims to know, if they are bringing claims and hoping to profit and the case is in any way fundamentally dishonest, XS Direct Insurance will not let them simply walk away.


”We will pursue them for underwriters’ wasted costs on that case. We do not tolerate fraudulent claims, which are still a significant problem, and are determined to always take a robust stance for the sake of our genuine policyholders.”


David Unwin, chartered legal executive at DWF Law, added: “This was a useful decision as the judge found that the relationship between the credit hire company and the claimant did not have to be exceptional in order to find that the credit hire company should pay the defendant’s costs pursuant to CPR 44.16.


“We will work with XS Direct and other insurers to pursue not only credit hire companies, but anyone hoping to profit from litigation including rehabilitation companies and storage and recovery.


”They are on notice as to what will happen when we encounter this situation again and should perhaps consider that walking away will not be an option in this scenario.”


CPR 44.16 regards exceptions to shifting one-way costs. According to Justice.gov.uk, the rule states:

(1) Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest.

(2) Orders for costs made against the claimant may be enforced up to the full extent of such orders with the permission of the court and to the extent that it considers just, where –

(a) the proceedings include a claim which is made for the financial benefit of a person other than the claimant or a dependant within the meaning of section 1(3) of the Fatal Accidents Act 1976 (other than a claim in respect of the gratuitous provision of care, earnings paid by an employer or medical expenses); or

(b) a claim is made for the benefit of the claimant other than a claim to which this section applies.

(3) Where paragraph (2)(a) applies, the court may, subject to rule 46.2, make an order for costs against a person, other than the claimant, for whose financial benefit the whole or part of the claim was made.”

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