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    Safeguarding against Fraud and Fundamental Dishonesty

    Since the value of a claim is to be raised from a minimum of £1,000.00 to £5,000.00+, Claimants like Mrs Ravenscroft from my previous blog Fundamental Dishonesty will be vulnerable as they will not have the benefit of legal representation.

    Should a Claimant not get proper legal advice regarding their claim, will they actually understand the legal procedure, and how to defend an allegation of fraud or fundamental dishonesty?

    The ramifications of a finding will leave them vulnerable to Costs sanctions and embarrassment amongst family, friends and any future proceedings they wish to bring. Furthermore, will a claimant know what they need evidently to respond fully to allegations of fraud or fundamental dishonesty and whether a Defendant has fully disclosed all relevant documents?

    The floodgates will open up for innocent and honest Claimants to be threatened and bullied into withdrawing a claim or even leaving a Claimant open to financial and legal ramifications by outmaneuvering an unrepresented lay person.

    A Defendant needs to plead and particularise fundamental dishonesty and fraud in their Defence to comply with CPR 16.5. A Defendant needs to deny the claim and put their version of events and allegations across to the Claimant. Both fundamental dishonesty and fraud need to pleaded as there is a great deal of overlap.

    The Court will need to assist in its case management and consider whether the Defendant has pleaded correctly and whether a reply to the Defence is needed.

    As we all are too aware of the costs implications for Claimants, there seems to be no consequences for Defendants who pursue a Defence of fraud and/or fundamental dishonesty. Shouldn’t there be some sort of cost sanction against a Defendant who pleads fraud or fundamental dishonesty if their claims are unfounded? There is so much emphasis on dishonest Claimants the Courts perhaps need to consider imposing cost sanctions against Defendants.

    Parties need to be placed on an equal footing. The proposal to increase the small claims limit to £5,000.00 will result in many actions being cosigned to the small claims. The proposed threshold is unfair, many would express.

    Therefore, in a nutshell, the legal process should look to incorporate a costs sanction in circumstances where the Defendant fails to prove allegations of fraud and/or fundamental dishonesty, the sanctions should be a real deterrent. The proposed regime will leave Claimants in a vulnerable position if no sanctions are levered against a Defendant for bringing a false claim of fundamental dishonesty and/ or fraud.


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