Court Of Appeal Highlights Gap In Section 26 Fraudulent Claim Legislation

In Lynch v Motor Insurers Bureau of Ireland [2026] IECA 95, the Court of Appeal noted a limitation in respect of section 26 of the Civil Liability and Courts Act 2004 (2004 Act), which concerns fraudulent personal injury claims. The section does not apply in circumstances where a bogus claim is made, without an affidavit of verification and is subsequently withdrawn.

Loss of Earning Claim

The plaintiff issued personal injuries proceedings, following a road traffic accident with an unidentified driver. A fundamental question before the High Court was whether the fact that the plaintiff no longer worked as a stonemason arose from injuries sustained in the road traffic accident or because of economic circumstances and/or pre-existing medical conditions.

Particulars of special damage for loss of earnings were submitted in the sum of €621,388, including €210,249 for past loss and €410,139 for future loss. These figures were based on the plaintiff continuing to work as a stonemason. The day before the hearing commenced in the High Court, this element of the claim was abandoned.

Section 26 Application

The defendant submitted video evidence which appeared to show the plaintiff engaging in physical construction and DIY work without difficulty and it made an application to the trial judge pursuant to Section 26 of the 2004 Act (Section 26) to dismiss the action.

Pursuant to Section 26, if a plaintiff gives or adduces (or dishonestly causes to be given or adduced) false or misleading evidence in any material respect that he or she knows to be false or misleading, the court will dismiss the action unless dismissal would result in an injustice. Secondly, if an affidavit of verification is sworn that is false or misleading in any material respect and the plaintiff knows it to be so when swearing the affidavit, the court will dismiss the action, again unless it would result in an injustice.

Section 26 provides guidance as to what is meant by “dishonestly”, namely an act done “with the intention of misleading the court”.

High Court Decision

The High Court dismissed the Section 26 application.

In respect of the video evidence, the court noted that while it appeared to confirm the plaintiff’s ability to undertake physical work, the test is subjective and the court was not satisfied that the plaintiff was deliberately dishonest or evasive in giving his evidence on his ability to work as a stonemason. A Section 26 order dismissing a claim cannot be made if a witness is merely misguided or mistaken.

In respect of the second aspect of the Section 26 application, namely the plaintiff’s withdrawal of the loss of earnings claim, the High Court found that the contents of the particulars and the actuarial report were material and that the plaintiff knew that there was no basis for the figures. However, the particulars were withdrawn prior to trial, the report was not put into evidence, no evidence was given or adduced at trial in support of the particulars and there was no affidavit of verification. As such, neither element of Section 26 applied. The court noted that it would have had no hesitation in dismissing the proceedings (notwithstanding their withdrawal) if the plaintiff had sworn an unqualified affidavit of verification knowing material particulars were unsubstantiated. However, there was no such affidavit.

In terms of the claim that was made, the High Court was not satisfied that the plaintiff had established that the pain and suffering due to the incident or its likely effects on his future enjoyment of life were or will be as severe as he maintained.

An award of €45,000 was made. As this was within the jurisdiction of the Circuit Court, a differential costs order was granted. Further, the plaintiff was ordered to pay the defendant’s costs in respect of the loss of earnings claim.

Court of Appeal Decision

The Court of Appeal was satisfied that the High Court’s application of Section 26 was correct and dismissed the appeal.

The Court of Appeal referenced principles relating to Section 26 derived from earlier judgments[1], including;

•  The onus of establishing that evidence given in an action and/or in an affidavit of verification is false and misleading, and that the plaintiff knew it to be so, rests with the defendant.

• The requirement of materiality has two aspects; the evidence must be material to the claim and also, false and misleading to a material degree.

• It is not necessary for a defendant to establish that the entirety of the claim is false or misleading but the false or misleading evidence must be sufficiently substantial to render the claim itself fraudulent.

Issues identified in respect of Section 26

Conclusions based on the Manner and Demeanour of a Witness

The Court of Appeal noted that the test for dismissing an action pursuant to Section 26 is subjective, requiring a trial judge to make an assessment of the plaintiff following examination/cross-examination. While not questioning the High Court’s conclusions in this instance, the Court of Appeal observed that reliance on a witness’s manner and demeanour as a basis for assessing the veracity and reliability of evidence can be limited, noting that judges do not have any special insight or ability in this regard.

Further, having to consider the manner and demeanour of a plaintiff may have the unfortunate effect of putting such judgments beyond the reach of appellate courts. This is because the appellate court does not have the same opportunity as the trial judge to see and hear the witness. The Court of Appeal suggested that this is an issue that could be revisited.

Requirement for Verifying Affidavit

In his evidence the plaintiff acknowledged that the loss of earning figures were “pie in the sky”.

The Court of Appeal was, however, satisfied that the trial judge was correct in finding that, for the purposes of Section 26, there was neither any evidence nor any affidavit of verification before the court.

While the making and withdrawal of a bogus claim prior to trial without an affidavit of verification may result in credibility issues for a plaintiff on cross examination, Section 26 does not apply in such circumstances.

The Court of Appeal stated that this matter ought to be addressed by legislation.

Conclusion

Section 26 does not extend to claims that are withdrawn before trial and unsupported by a verifying affidavit, even where they are overstated. The Court of Appeal has identified this as an area for legislative reform.

Footnote

1  O’Sullivan v Brozda and Others [2022] IECA 163

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