Fundamental Dishonesty – Costs, Consequences and Risks

By Bipin Regmi, Senior Underwriter

Estimate read time 4 minutes 57 seconds

As most claimant solicitors would agree, allegations of fundamental dishonesty (FD) have become an increasingly common litigation tactic used by defendants in personal injury and clinical negligence cases.

Defendants sometimes raise FD allegations to place undue pressure on claimants, often with limited consequences when those allegations fail. As a result, many claimant solicitors have called for changes to the rules to ensure a fairer balance between the parties.

• FD occurs in personal injury and clinical negligence cases where the claimant acts dishonestly often by exaggerating injuries, fabricating evidence or falsifying financial losses.
• In accordance with Section 57 of the Criminal Justice and Courts Act 2015, the court has a statutory discretion to dismiss claims in their entirety where the courts make a finding of FD unless it is satisfied that the claimant would suffer substantial injustice as a result.
• If a finding of FD is made against a claimant, the consequences are severe. They can include costs sanctions, the disapplication of QOCS and potential criminal prosecution.

The recent decision in Hakmi v East & North Hertfordshire NHS Trust & Anor [2025] EWHC 2597 (KB) illustrates the costs risks for defendants who pursue unsubstantiated allegations of fundamental dishonesty. In Hakmi, although the claimant ultimately failed because the judge concluded that the treatment would not have changed the outcome, the court nevertheless ordered the successful defendants to pay 15% of the claimant’s costs from the point at which they raised the dishonesty allegation.

This judgment will be welcomed by claimants and their representatives, as it reinforces the need for defendants to act reasonably when advancing such serious allegations.

In practical terms, raising an FD allegation can severely increase the overall costs burden. Such allegations often lead to extended evidential work, additional expert input, and more extensive cross‑examination each of which adds further cost and complexity to the litigation.

The Temple Perspective

From an ATE insurer’s perspective, allegations of FD carry significant risk. Policyholders must understand that a successful FD finding can invalidate their policy, potentially exposing substantial financial consequences.

It is also important to recognise that an unsuccessful FD allegation can significantly increase the recoverable costs, which the ATE insurer may ultimately be required to fund if the underlying claim later fails for unrelated reasons.

When assessing a case in which FD allegations are raised, an ATE insurer should carefully evaluate the strength and consistency of the claimant’s evidence, taking into account the evidence put forward by the defendant. Consideration should also be given to the likely increase in costs, whether the allegation undermines the claimant’s prospects at trial, and whether any inconsistencies such as contradictions in witness evidence, social media content, or expert reports may leave the claim vulnerable to FD challenges.

It is essential that solicitors carry out early and ongoing risk assessments to identify and record any potential FD concerns at the outset, and again at later stages, to enable effective damage control where possible.

This assessment should consider whether

• the claimant has provided any inconsistent evidence that may expose the claim to FD challenges.
• whether the claimant’s social media content conflicts with their stated evidence; whether any expert reports are inconsistent with the claimant’s account or could be interpreted as undermining credibility.
• the defendant’s conduct: and whether the FD allegation is being used as a negotiation tactic rather than being based on genuine evidential concerns.

The Hakmi decision reinforces that defendants who advance unreasonable allegations of dishonesty may face costs penalties. In doing so, it is hoped that the tactical use of FD as a pressure tool will be reduced.

For claimant solicitors and ATE insurers alike, Hakmi provides support for adopting a more confident and robust approach when faced with speculative FD allegations.

If you would like to discuss any of the details raised in this article, please call Bipin on 01483 514414 or send an email to Bipin.Regmi@temple-legal.co.uk