The truth about dishonest claims: How the rules could affect you

When someone is injured because of another person’s negligence, claiming compensation is often the only way to recover lost earnings, pay for medical treatment, and get your life back on track. The legal system is designed to protect people and ensure that those responsible are held accountable.

But there’s a worrying trend emerging in personal injury claims. Some insurers and defendants are misusing a legal rule intended to prevent fraud, instead using it to attempt to block legitimate and fair claims. If this issue isn’t tackled properly, more innocent people could be denied the justice and compensation they deserve.

We support the call for change, backed by The Association of Personal Injury Lawyers (APIL) and believe in protecting the rights of injured people. Here’s what’s happening and why it matters.

What is the ‘fundamental dishonesty’ rule?

In personal injury law, if a court believes a claimant has been fundamentally dishonest, for example, by exaggerating injuries or faking part of a claim, the entire case can be thrown out. Not just the dishonest part, but the whole claim, even if some of it was completely genuine.

It’s a strict rule, introduced to prevent fraudulent claims from succeeding. Courts can also order the claimant to pay the defendant’s legal costs, which can run into thousands of pounds.

When the rule is used correctly, for instance, to expose someone making a false claim, it helps protect the integrity of the legal system. However, the problem arises when defendants and insurers make allegations of dishonesty without sufficient evidence to support them.

The rise in false fraud allegations

APIL has raised serious concerns about how some defendants are using this rule. In a recent response to the Legal Services Board’s consultation, APIL explained how certain insurers are taking a “scattergun” approach to allegations of fraud. In simple terms, they’re accusing claimants of dishonesty in the hope that something sticks.

This kind of behaviour is particularly damaging. Many people already find the legal process daunting, especially when they’re recovering from physical or psychological injuries. Being accused of fraud, even if it is false, adds an extra layer of stress and fear. Some claimants may drop their case altogether, worried about the risks or the cost if they lose.

The fundamental dishonesty rule gives defendants a powerful tool, but there’s currently no penalty if that tool is misused. APIL argues that this creates an unfair playing field, where insurers can make unsubstantiated claims without consequences.

How does this impact genuine claimants?

If you’re pursuing a personal injury claim, being falsely accused of dishonesty could have serious implications:

• Financial pressure: If your case is dismissed because a judge believes you were fundamentally dishonest (even if only a small part of your claim is questioned), you could be forced to pay the other side’s costs.
• Emotional strain: Being wrongly accused of fraud is highly stressful, especially for someone already dealing with the after-effects of an accident or injury.
• Access to justice: The fear of being accused, or the cost of defending such accusations, may discourage people from making a claim at all, even when their case is completely legitimate.

We see how difficult the process can be for people already under pressure. We believe that everyone should be treated fairly and that the legal system should support those who are genuinely injured, rather than punishing them.

The need for stronger regulation

So why is this happening? In short, there’s a gap in the rules.

While claimants face severe consequences if they’re found to be dishonest, defendants don’t face the same level of accountability for making baseless accusations. That imbalance is what APIL wants to address.

In their response to the Legal Services Board, APIL called for clearer ethical guidance for legal professionals, including training, real-world examples, and a focus on upholding public trust. They also warned that some defendant solicitors are prioritising loyalty to their clients over their responsibility to act with integrity.

Without clear rules and penalties for bad behaviour, this issue is only likely to get worse.

What can be done?

The Legal Services Board is currently reviewing its policy on professional ethics. APIL has urged them to take action to stop the misuse of the fundamental dishonesty rule. This could include:

• Holding defendants to account for baseless allegations
• Encouraging ethical behaviour among legal professionals
• Ensuring training and guidance are available for those working in complex cases
• Protecting access to justice for people who have been genuinely injured

As personal injury lawyers, we fully support these changes. Our role is to stand up for those affected by negligence, and we believe everyone should be able to bring a claim without being unfairly accused of wrongdoing.

How can we help?

If you’re thinking about claiming for personal injury, the idea might feel overwhelming. We work directly with clients, not through legal administrators or paralegals. You’ll speak to a qualified solicitor from day one, and we’ll guide you through the process clearly, professionally, and with compassion.

We’ll be upfront about your chances of success and ensure your case is built on solid evidence. And if any unfair allegations arise, we’ll be there to defend you every step of the way.

We believe in justice. And we believe that the rules designed to protect the legal process should never be used as a weapon against the very people the system is meant to support.

The abuse of the fundamental dishonesty rule isn’t just a legal issue; it’s a moral one. Genuine claimants should not be put off making a claim because of fear or intimidation.

The legal profession, regulators, and insurers all have a role to play in putting this right. But most importantly, claimants need to know that with the right legal support, they can still pursue justice and win.

If you’ve been injured through no fault of your own and want clear, honest advice, get in touch with our team at NV Legal.

About NV Legal

We pride ourselves on our personal, hands-on approach. When you work with us, you won’t be passed between departments or left chasing updates. You’ll deal directly with one of our experienced solicitors, who will manage your claim and recovery pathway from start to finish.

If you’ve suffered an accident and need support, get in touch for a free, no-obligation chat. It’s not just about the claim, it’s about helping you recover.

Contact NV Legal

Call – 03330 112 732

Email – info@nvlegal.co.uk

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