To sustain a pleading of fraud there must be “reasonably credible material which as it stands establishes a prima facie case of fraud” (see Bar Code of Conduct at Paragraph 704(c)), but what happens if a Defendant’s concerns fall short of the requisite standard?
The answer, according to Lord Justice Davis, is not to, as many Defendants have done in recent years, simply to recite a number of matters which raise “significant concerns”, and leave the matter there hoping that the insinuation of fraud will either put a Claimant off pursuing the claim or put the judge on notice that something fishy appears to be going on.
The question was raised by Davis LJ recently in Hussain v (1) Amin, (2) Charters Insurance  EWCA Civ 1456, an appeal relating to a costs order following a trial where the Second Defendant raised in its Defence a number of matters that caused them concern as to whether the accident that was subject to the litigation had been staged, without expressly pleading fraud.
Davis LJ considered that such pleadings “should not be sanctioned” as “… the claimant was faced with a hybrid, he in effect being required at trial to deal with an insinuation of fraud without any express allegation to that effect pleaded.”
Earlier in the judgment it was noted that at a push such a defence could be justified as a holding defence but
“… it is a case pleaded on insinuation, not allegation. If the second defendant considered that it had sufficient material to justify a plea that the claim was based on a collision which was a sham or a fraud, it behoved it properly and in ample time before trial so to plead in clear and unequivocal terms and with proper particulars”.
Davis LJ’s comments highlight the difficult situation Defendants are in when faced with a collection of inconsistencies and peculiarities that whilst on the face of things appear pretty rum, do not establish a prima facie case of fraud. Will Defendant’s now take a more bullish approach and plead fraud when otherwise they would not have done so? Given the increasing recognition of the scale of fraudulent rta claims, the answer may well be yes.