Rosalind obtained exemplary damages and indemnity costs on an insurer’s counterclaim brought under the tort of deceit against a Claimant who was alleged to be fundamentally dishonest.
The Claimant made a claim for general damages resulting from an RTA. The Defendant defended the claim on the basis of fraud and made a counterclaim for exemplary damages with the cause of action being deceit. The factual elements of the deceit (knowingly making false representations which would induce the insurer to pay out on the claim) overlapped with the insurer’s allegations of fundamental dishonesty.
The Claimant’s claim was discontinued, and the matter proceeded to trial on the insurer’s counterclaim alone. Rosalind was instructed to represent the insurer on their counterclaim.
At trial, the Court found the Claimant to have been fundamentally dishonest; the threshold for awarding exemplary damages to have been met; and it was decided that the appropriate measure of exemplary damages would reflect the award for PSLA that would have been made but for the deceit/fraud.
QOCS was disapplied under CPR 44.16(1) and the insurer recovered their costs of the entire action on the indemnity basis.
This is another example of a case where the criteria can be met for both proving the elements of deceit and for obtaining exemplary damages in circumstances where the loss to the insurer has not yet been incurred.