The recent months have produced a number of court decisions on fundamental dishonesty which have reinforced both the power and the limits of the fundamental dishonesty regime. For insurers, these decisions offer timely and practical guidance on when the regime can be deployed, what evidence is required, and how costs arguments should be framed.

This update reviews four key decisions, sets out the governing principles and offers practical guidance on what these cases mean for the claims handling strategy adopted by defendants and insurers.

The law

In civil litigation, a finding of fundamental dishonesty usually arises under s57 of the Criminal Justice and Courts Act 2015 and CPR 44.16 (qualified one-way costs shifting). The courts have developed a two-stage test in determining fundamental dishonesty:

1. Was the claimant dishonest? The test, set out by the Supreme Court in Ivery v Genting Casinos, requires an assessment of the claimant's subjective state of knowledge and belief, considered against whether an ordinary person would regard the conduct as dishonest.
2. Was the dishonesty 'fundamental'? The leading authority is LOCOG v Sinfield, which held that dishonesty is fundamental if it substantially affected the presentation of the case, had an impact on liability or quantum, and would potentially have an adverse effect on the defendant - all judged in the context of the specific litigation.

The consequence of a finding of fundamental dishonesty is that the entire claim must be dismissed (including any genuine parts), unless dismissal would cause substantial injustice. The claimant may also lose QOCS protection and become liable for the defendant's costs.

The cases

1. AXA Insurance PLC v Maher [2026] EWHC 1365 (KB)

AXA appealed against a first instance finding in favour of Mr Maher and the trial judge's refusal to find fundamental dishonesty. The King's Bench Division dismissed the appeal. The trial judge had been entitled to find that Mr Maher subjectively believed the account of his symptoms he gave to his medical expert, and having found subjective belief, was right to conclude the behaviour was not dishonest. The appellate court found no error in the judge's evidential assessment and confirmed that the absence of contemporaneous medical records had been properly explained.

2. Greening-Steer v Ainge [2026] EWHC 1239 (KB)

Despite genuine and serious injuries - including traumatic brain injury and incomplete spinal cord injury - the court found the claimant had been fundamentally dishonest in his presentation of symptoms from mid-2021 onwards. Surveillance evidence showed him walking normally, driving manual vans long distances, operating forklift trucks and loading heavy equipment - directly contradicting assertions made to medical experts. The claim was dismissed in its entirety. Honest damages would have been assessed at £378,420.

3. Ward v Donnellan [2026] EWCA Civ 729

The Court of Appeal held that the trial judge had erred in making no order for costs following findings of dishonesty against both parties. The court clarified that a judge must not depart lightly from the default position that the unsuccessful party pays costs and must weigh the centrality of the claimant's dishonesty to the overall claim against the more limited relevance of any dishonesty on the defendant's part.

4. Atuanya v Ministry of Defence [2026] EWHC 758 (KB)

Following discontinuance of a claim for a non-freezing cold injury, the sole issue was whether fundamental dishonesty removed the claimant's QOCS protection. The court found that the claimant had deliberately misrepresented his cold sensitivity to experts to inflate damages, and that this conscious exaggeration - even if not 'calculated' deception in the traditional sense - constituted dishonesty. A costs order was made against the claimant.

Key takeaways for insurers

1. Subjective belief remains the critical gateway. Maher underlines that objective inconsistency alone is insufficient: insurers must gather evidence of the claimant's actual state of mind. Relevant material includes statements to treating clinicians, social media activity, third-party accounts and occupational health records.
2. Surveillance remains the most powerful tool. Greening-Steer demonstrates what can be achieved when surveillance evidence is properly gathered and deployed. Total dismissal of a claim that would otherwise have attracted nearly £400,000 in honest damages illustrates the leverage available when exaggeration is material and provable. Surveillance should be planned with legal advice to ensure admissibility and relevance.
3. Exaggeration need not be 'calculated' to be dishonest.  Atuanya confirms that consciously exaggerating symptoms 'to convince' others of suffering constitutes dishonesty even without outright fabrication. This is particularly relevant in cases involving chronic pain, fatigue conditions and psychiatric presentations, where symptom exaggeration commonly occurs on a spectrum. Insurers should be prepared to run dishonesty arguments in such cases.
4. On costs, not all dishonesty is equal. Ward v Donnellan establishes that where dishonesty is found on both sides, the scale and centrality of the claimant's dishonesty to the overall claim will be decisive. A fundamentally false claim will, absent exceptional circumstances, still sound in a costs order against the claimant even where the defendant has behaved improperly on a discrete issue. Insurers should press for costs orders in appropriate cases.
5. Appellate challenges on credibility face a high bar.  Maher is a reminder of the difficulties facing any insurer considering an appeal based on evidential assessment. Fundamental dishonesty appeals face a high bar where the first instance judge has made findings of fact following a full trial. Insurers should assess the prospects of appeal carefully and swiftly, rather than treating it as a default response to an adverse first-instance decision.

Conclusion

The 2026 case law on fundamental dishonesty continues to develop the regime in ways that are broadly favourable to defendant insurers, whilst maintaining important safeguards for claimants who genuinely believe the case they are advancing.

The practical challenge for insurers lies not in the legal framework - which is now well established - but in the quality of the evidential case assembled to support a fundamental dishonesty argument. Early and proactive evidence gathering, particularly surveillance and records of the claimant's contemporaneous statements, remains the critical differentiator between a successful fundamental dishonesty finding and an unsuccessful one.