Insurer not entitled to hold back evidence of potential PI fraud

The High Court has ruled that an insurance company cannot withhold evidence suggesting a connection between a claimant and the owner of the involved vehicle, with the intention of catching the claimant in a lie. Mr. Justice Johnson emphasized that when alleging fraud, a party must disclose the supporting facts. AXA Insurance UK had initially planned to rely on evidence showing a friendship between the claimant and the van owner. However, the insurer chose to withhold this evidence until after the exchange of witness statements, hoping the claimant would be caught lying.

Mr. Johnson stated that AXA acknowledged the evidence should have been disclosed and admitted to a deliberate breach of court orders and rules. The case involved Mr. Kryeziu's claim of a collision with Louis Fraser's van in October 2018. AXA paid damages of £44,214 for personal injury claims but later deemed the incident fraudulent, alleging deceit and conspiracy.

Despite initial refusals, AXA sought permission to amend its case, which included settling its claim against the passengers in Mr. Kryeziu's car without admission of liability. The court, led by His Honour Judge Lethem, initially refused permission, declared AXA estopped from seeking adverse findings, and struck out the claim. AXA appealed, arguing that when alleging fraud, it need not know the true underlying factual position, but only needed to set out the relevant facts.

Mr. Johnson found flaws in the assumptions underlying the refusal of amendments and granted AXA permission to amend. This included allowing the Facebook evidence, although he expressed disapproval of AXA's conduct. The court refused permission for AXA to claim exemplary damages and warned of potential significant cost sanctions.