Fundamental dishonesty

Category: Claims and policy principles · Reviewed by the Apex broking team · Last reviewed 2026-08-22 · ~4 min read

Definition

Fundamental dishonesty is not defined by statute. It is a finding the court makes on the evidence, that the claimant has been dishonest in a way that goes to the root of the claim or a substantial part of it, rather than being dishonest about something incidental. The two regimes in which the phrase does work — section 57 of the Criminal Justice and Courts Act 2015 and rule 44.16 of the Civil Procedure Rules — use the same expression but produce different consequences, and it is worth keeping them apart.

Section 57 of the Criminal Justice and Courts Act 2015

Section 57 applies where, in proceedings on a claim for damages in respect of personal injury, the court finds that the claimant is entitled to damages, but on an application by the defendant is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim. In that case the court must dismiss the primary claim, unless satisfied that the claimant would suffer substantial injustice if the claim were dismissed. The dismissal extends to any element of the primary claim in respect of which the claimant has not been dishonest. The court must record in the dismissal order the amount of damages it would have awarded but for the dismissal, and when assessing costs it must deduct that recorded amount from the costs the claimant is ordered to pay the defendant. Section 57 applies only to proceedings begun on or after its commencement on 13 April 2015.

What section 57 does that ordinary rules do not

Two features are unusual. The first is that an honest head of loss goes with the dishonest one: a claimant genuinely injured, who exaggerates the consequences fundamentally, loses the genuine element as well. The second is the substantial injustice escape, which is deliberately narrow — the loss of genuine damages cannot in itself be the injustice, or the exception would swallow the rule. The set-off mechanism in subsections (4) and (5) is what stops a dishonest claimant walking away without a costs consequence, by netting the notional damages against the defendant’s costs.

CPR 44.16 and qualified one-way costs shifting

Qualified one-way costs shifting, in Section II of CPR Part 44, means that in personal injury claims a costs order against the claimant may generally be enforced only up to the value of the damages and interest recovered. Rule 44.16 is one of the exceptions. Where the claim is found on the balance of probabilities to be fundamentally dishonest, the court may permit orders for costs to be enforced to their full extent. It is a permission-based exception, so the court retains a discretion, and it operates on the whole claim rather than on individual heads of loss. Rule 44.16 also covers claims made for the financial benefit of someone other than the claimant or a dependant.

How the two interact

They can apply to the same case and do different work. Section 57 dismisses the claim; rule 44.16 removes costs protection so that the defendant’s costs order becomes enforceable. A defendant that establishes fundamental dishonesty will usually pursue both. Where a claim has already been discontinued or dismissed on other grounds, rule 44.16 may still be invoked to obtain permission to enforce costs, which is why the allegation is sometimes pursued even after the substantive claim has fallen away.

Evidence and procedure

Fundamental dishonesty is a serious allegation and is expected to be pleaded and particularised, not raised for the first time in closing submissions, so that the claimant has a fair opportunity to answer it. It is proved on the balance of probabilities, but the cogency of evidence required reflects the seriousness of what is alleged. Typical evidence includes surveillance, social media material, inconsistencies between the claimant’s account and the medical records, and evidence from treating clinicians. Section 57 also contemplates subsequent proceedings for contempt of court or criminal proceedings arising out of the same dishonesty, and requires the sentencing court to take the dismissal into account.

The insurance angle

For a liability insurer defending a personal injury claim, the two provisions together are the principal deterrent against exaggerated claims and the principal route to recovering defence costs. For a policyholder, the relevance is different: a business whose own claim on its policy is tainted by dishonesty faces a separate regime altogether, because the Insurance Act 2015 provides remedies where the insured makes a fraudulent claim under a contract of insurance. The two subjects are often confused. Fundamental dishonesty is about a claimant in litigation; the fraudulent claims regime is about an insured claiming on its own policy.

Why it matters

Fundamental dishonesty converts exaggeration from a discount on damages into a total loss of the claim and an enforceable costs bill. For anyone handling injury claims — on either side — it changes how inconsistencies are investigated, how allegations must be pleaded, and how settlement is approached once a serious credibility issue has emerged.

Frequently asked questions

What happens if a court finds a personal injury claimant fundamentally dishonest?

Under section 57 of the Criminal Justice and Courts Act 2015 the court must dismiss the whole primary claim, including elements the claimant was honest about, unless the claimant would suffer substantial injustice. The court records the damages it would have awarded and sets that figure against the costs the claimant must pay the defendant.

Is fundamental dishonesty defined in legislation?

No. Neither section 57 nor CPR 44.16 defines it. It is a finding made by the court on the evidence, and it is generally understood to require dishonesty going to the root of the claim or a substantial part of it, rather than dishonesty about something incidental.

How does it affect costs protection?

CPR 44.16 provides that where a claim is found on the balance of probabilities to be fundamentally dishonest, the court may permit costs orders against the claimant to be enforced to their full extent, removing the protection that qualified one-way costs shifting would otherwise give.

Related entries

• Dishonesty exclusion
• PI fraud and dishonesty exclusion
• Dishonesty extension
• Claims handling
• ATE insurance: an overview

This entry is part of the Apex Insurance Wiki. Last reviewed 2026-08-22. Next review: 2027-02-22. It is insurance information, not legal advice, and it states the position as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.