Court of Appeal dismisses appeal where bogus personal injury claim was withdrawn without a verifying affidavit.

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THE COURT OF APPEAL

CIVIL

Court of Appeal Record Number: 2025/187

High Court Record Number: 2019/4941P

Neutral Citation Number [2026] IECA 95

Faherty J. Binchy J. Meenan J.

BETWEEN/

KEVIN LYNCH

PLAINTIFF/RESPONDENT

- AND –

MOTOR INSURERS BUREAU OF IRELAND

DEFENDANT/APPELLANT

JUDGMENT of Mr. Justice Charles Meenan delivered on the 19th day of May 2026

Introduction: –

1. Compensating people who have been injured through the negligence of others raises a number of problems for our legal system. Firstly, and most importantly, compensation must be fair and reasonable both to the injured party and the wrongdoer. Secondly, the system of compensation has to fairly accommodate the fact that people react in different ways to similar injuries. Thirdly, a system of compensation has to make provision to identify and penalise those who falsely or deliberately exaggerate an injury and/or its financial consequences. It is these provisions that are at the heart of this appeal.

2. The Civil Liability and Courts Act, 2004 (the “Act of 2004”) brought about a number of changes in personal injuries law. Two changes, in particular, are the focus of this appeal. Firstly, the requirement to file a verifying affidavit in respect of claims made and, secondly, a statutory power enabling a court to dismiss fraudulent personal injury proceedings. A further important development in the law was the provision in the Courts and Court Officers Act, 1995 which enabled a court to make a “differential costs order”. A person who brought High Court proceedings in respect of a personal injuries claim that fell within the jurisdiction of the Circuit Court could be faced with such an order. The effect of the order would be to substantially reduce the amount of the award that was payable to the plaintiff.

3. This is an appeal from the judgment of the High Court (Kennedy J.) and subsequent order (29 May 2025) which ordered the defendant/appellant to pay to the plaintiff/respondent the sum of €45,000. In addition, the High Court made a differential costs order in favour of the defendant.

Background to the claim: –

4. The proceedings arose from a road traffic accident in which the plaintiff/respondent claimed to have sustained personal injuries due to the negligence and breach of duty of a driver who was unidentified. The road traffic accident took place on 5 July 2015.

5. At the time of the accident the plaintiff/respondent was 49 years old. After working in England as an apprentice stonemason he returned to Ireland in 1996 and set up his own business as a stonemason in 1997. The business was successful but, like many other businesses at the time, encountered serious financial difficulties arising from the economic crisis in 2010/11. As a result, from 2012 the plaintiff/respondent worked in a Community Employment Scheme maintaining greenways and pedestrian ways. Subsequently the plaintiff/respondent and his son have launched an innovative business bringing foreign tourists on hunting trips.

6. There was one particular aspect of the claim that was problematic. This concerned the effects of the injuries sustained by the plaintiff/respondent on his ability to work. The plaintiff/respondent was no longer working as a stonemason, and a fundamental question arose in the proceedings as to whether this change in employment arose out of injuries sustained in the road traffic accident or by reason of economic circumstances and/or preexisting medical conditions.

7. In maintaining his claim for loss of earnings the plaintiff/respondent did two things that were, to say the least, troubling. Firstly, he furnished incorrect information to medical experts retained by himself and the defendant/appellant. Secondly, and quite extraordinarily, solicitors on his behalf served particulars of special damage claiming loss of earnings in the sum of €621,388. He claimed €210,249 loss of earnings to date and €410,139 into the future. These loss of earnings were based on the plaintiff/respondent working and continuing to work as a stonemason. The day before the hearing of the action this claim, without any explanation, was abandoned.

8. The appellant/defendant had video evidence which appeared to show the plaintiff/respondent, without any apparent difficulty, engaging in physical construction and DIYwork.

9. The manner in which the plaintiff/respondent pursued his claim inevitably led to the defendant/appellant making an application to the trial judge pursuant to section 26 of the Act of 2004.

Relevant statutory provisions: –

10. Section 14 of the Act of 2004 provides:-

“14 (1)– Where the plaintiff in a personal injuries action –

(a) serves on the defendant any pleading containing assertions or allegations, or

(b) provides further information to the defendant,

the plaintiff – – – shall swear an affidavit verifying those assertions or allegations, or that further information.”

11. Section 26 provides: –

“26 (1) if, after the commencement of this section, a plaintiff in a personal injuries action gives or reduces, or dishonestly causes to be given or adduced, evidence –

(a) is false or misleading, in any material respect, and

(b) he or she knows it to be false or misleading,

the court shall dismiss the plaintiff’s action unless, for reasons that the court shall state in its decision, the dismissal of the action would result in injustice being done.

(2) The court in a personal injuries action shall, if satisfied that a person has sworn an affidavit under section 14 that –

(a) is false or misleading in any material respect, and

(b) that he or she knew to be false or misleading when swearing the affidavit, dismisse the plaintiff’s action unless, for reasons that the court shall state in its decision, the dismissal of the action would result in injustice being done.”

Judgment of the High Court: –

12. In a lengthy and detailed judgment the trial judge meticulously analysed and considered the evidence, in particular the medical evidence. The trial judge also considered so much of the video footage as was played during the trial. As this appeal concerns the refusal of the trial judge to accede to an application under section 26 I will refer to the trial judge’s ruling and his reasons for it. The trial judge considered the section

26 application under two headings: -

(i) "information supplied to experts" and

(ii) "withdrawn particulars of loss of earnings".

13. Though the section 26 application was dismissed that was not the end of the matter. The plaintiff/respondent was less successful in persuading the trial judge as to the extent and effects of his injuries: – “147. In summary, I accept that the Plaintiff has experienced, and may continue to experience, pain and suffering due to the incident and that it exacerbated existing injuries to some degree, but I am not satisfied that he has established that the pain and suffering which is due to the incident or its likely future effects on the Plaintiff’s future enjoyment of life are or will be as severe as the Plaintiff maintains. The Plaintiff did not appear to suffer significant consequences at the time of the incident. I am not convinced that many of the subsequent symptoms of which he complains are due to the incident to a material degree..."

14. The award of damages in the sum of €45,000 was well within the jurisdiction of the Circuit Court. On costs the following order was made: - “And the COURT DOTH MAKE a differential costs Order in the Defendant’s favour and to apply to the costs incurred by the Defendant from August 2019 and thereby IT IS ORDERED that the Plaintiff to pay to the Defendant all costs incurred for the Plaintiff’s ‘Loss of Earnings’ claim to include without limitation work undertaken by the Defendant to compel the Plaintiff to furnish details of his loss of earnings including the correspondence dated – – –, the Notice of Motion dated 9th day of March 2023 and the associated Grounding Affidavit the retention and work done by Southern Surveillance Services and the Defendant’s retention of a Vocation Assessor such costs to be on the High Court scale…”

15. This differential costs order must have an adverse effect on the amount that will actually be paid to the plaintiff/respondent. This is an inevitable consequence of making a significant but unjustifiable claim for loss of earnings notwithstanding its withdrawal prior to the hearing.

Notice of Appeal: –

16. The various grounds set out in the notice of appeal centred on the trial judge’s refusal to accede to an application under section 26. It is stated that the decision of the trial judge was “unsupported and contrary to the evidence”.

17. It is notable that there was no appeal by the plaintiff/respondent against the differential costs order.

Consideration of appeal: –

18. It should be recorded that in the course of hearing this appeal counsel for the defendant/appellant stated that they had had a “Rolls-Royce hearing” in the High Court. Like the approach taken by the trial judge the first step in considering an application under section 26 requires an analysis of the statutory provision itself. Firstly, the section concerns “evidence” that is given or adduced or dishonestly given or adduced. “Adducing” evidence entails referring to facts or reasons in support of a claim.

19. Secondly, the court has to be satisfied that the “evidence” is: –

(a) false or misleading, in any material respect, and

(b) he or she knows it to be false or misleading.

Thirdly, even if (a) and(b) are satisfied the plaintiff’s action is not automatically dismissed. The action will not be dismissed if, for stated reasons, the court concludes that the dismissal of the action would result in injustice being done.

20. The statutory power to dismiss an action under section 26 extends to situations where a person knowingly swears a verifying affidavit under section 14 that is false or misleading in any material respect. Again, the action will not be automatically dismissed if, for stated reasons, the court concludes that the dismissal of the action would result in injustice being done.

21. Section 26 provides guidance to the court as to what is meant by “dishonestly” that is an act that is done “with the intention of misleading the court.” It is clear from the wording of section 26 in deciding whether a plaintiff has given or adduced evidence or sworn a verifying affidavit that is false or misleading or acted dishonestly, the test is subjective not objective.

22. In his judgment the trial judge considered the many authorities on the application of section 26. In particular he referred to the decision of this court in O’Sullivan v Brozda and Others [2022] IECA 163 where, at page 5 of his judgment, Collins J. stated: - “7. So far as appears to me, the following are the main points to emerge from the terms of section 26 itself and the authorities which have addressed it:

• The onus of establishing that evidence given in an action and/or in a section

14 affidavit is ‘false and misleading in any material respect’ is on the defendant. The requirement of materiality appears to have two aspects. First, the evidence at issue must be material to the claim advanced… Second, the evidence must be false and misleading to a material degree. That does not mean that a defendant must establish the entirety of the claim is false or misleading in order to succeed (Nolan, para. 44) but the false or misleading evidence must nonetheless ‘be sufficiently substantial or significant in the context of a claim that it could be said to render the claim itself fraudulent’.

• Similarly, the onus of establishing that the plaintiff knew that the evidence given and/or that any section 14 affidavit sworn was false or misleading is on the defendant. The test of knowledge in this context is subjective: Hearne v Bus Eireann [2011] IESC 44, per Denham CJ at para. 34. Actual, rather than constructive knowledge/dishonesty must therefore be established. Where section 26(2) is relied on, the defendant ‘must establish, on the balance of probabilities, that the plaintiff swore a verifying affidavit knowing it to be false and misleading in a material respect.’ – – –”

23. As the test to be applied in a s. 26(1) application is subjective it must necessarily mean that a trial judge has to make an assessment of the plaintiff. This assessment arises following the examination and, presumably, cross-examination of the plaintiff. For a court hearing an appeal this inevitably means the application of the principles in Hay v O’Grady [1992] 1 IR 210, in particular the oft-cited passage from the judgment of McCarthy J.

where he stated at page 217: –

“1. An appellate court does not enjoy the opportunity of seeing and hearing the witness as does the trial judge who hears the substance of the evidence but, also, observes the manner in which it is given and the demeanour of those giving it. The arid pages of a transcript seldom reflect the atmosphere of a trial.

2. If the findings of fact made by the trial judge are supported by credible evidence, this court is bound by those findings, however voluminous and, apparently, weighty the testimony against them. The truth is not the monopoly of any majority.”

24. The trial judge was satisfied “that material information furnished by the plaintiff to the experts retained by the respective parties was objectively incorrect or incomplete to such an extent as to be materially misleading…”

The trial judge continued: –

“116. The plaintiff’s cross-examination was robust but fair. There are legitimate concerns as to the accuracy, completeness and objectivity of the information furnished. The Defendant’s application would be unanswerable if the test was purely objective or dependent on constructive knowledge. However, the test is subjective, and the Defendant bears a significant burden in proving such a serious allegation on the balance of probabilities.”

25. On the defendant/appellant’s video evidence the trial judge stated: – “118. The Defendant relied on the video footage which certainly appeared to confirm the Plaintiff’s ability to undertake physical construction and DIY work and to be difficult to reconcile with the characterisation of the Plaintiff’s condition in the experts’ reports. However, the Defendant has not satisfied me that the Plaintiff was dishonest when he discussed his ability to work as a stonemason. He seems to have genuinely believed that he was not operating at the level expected of a professional within the industry – –. Whatever may be the objective position, in his own mind, he seems to have thought that he was unable to operate at the level required in order to operate full-time as a stonemason or in a similar capacity.”

26. Having considered the video evidence and the evidence of the plaintiff/respondent the trial judge concluded: – “119. – – – Last, but certainly not least, I scrutinised the Plaintiff carefully in terms of his demeanour as a witness and reviewed the totality of his evidence. I was not satisfied that all answers were objective or accurate. Nor did I agree that all conclusions were justified. However, the Defendant did not satisfy me that he was being deliberately dishonest or evasive. Even where I considered his replies unreasonable, it seemed to me that he was saying what he believed. A s. 26 order cannot be made if a witness is merely misguided or mistaken (or even if they are stubbornly but genuinely deluded)…”

27. I am satisfied that the trial judge’s application of both the wording and the authorities on s. 26 were correct. The reference to the “demeanour” of the plaintiff/respondent invokes the Hay v O'Grady principles stated above.

28. As a general observation, without in any way questioning the trial judge’s

conclusion, I have serious doubts about the reality of a trial judge reaching conclusions as to the veracity or reliability of evidence based on the “manner” and “demeanour” of the witness giving the evidence. Persons are appointed judges based, to a large extent, on of their knowledge and application of the law. In truth, I do not think judges have any special insight or ability to decide on the veracity or reliability of evidence based on the “manner” or “demeanour” of a witness. Rather, in my view, a judge is better able to reach a

conclusion on the evidence based on logic, consistency, reliability and relevance. I suspect that sometimes, and I am specifically not referring to the instant case (in which it is clear that the conclusions of the judge were reached following a rigorous assessment of the evidence), terms pertaining to the of the “manner” and “demeanour” of witnesses are used so as to reflect the dicta of McCarthy J. in Hay v O’Grady, for the benefit of the appellate court, but the fact is that such observations are rarely of assistance in determining whether any particular conclusion has been reached on the basis of credible evidence. The use of such terms as “manner” and “demeanour” may have the unfortunate effect of putting judgments beyond the reach of appellate courts. Maybe this is an issue that could be revisited.

29. The second aspect of the s. 26 application concerned the plaintiff/respondent’s withdrawal of particulars of loss of earnings. In giving evidence the plaintiff/respondent acknowledged that the figures were “pie in the sky” and, according to the trial judge, did not “seriously push back on the defendant’s characterisation of the figures as ‘bogus’”.

30. There was no verifying affidavit, as required by s. 14 of the Act of 2004, in respect of the claim for loss of earnings to date and into the future. The quantification of this claim was set out in an actuarial report furnished by the plaintiff/respondent. The trial judge concluded: – “127. Turning to the s 26(2) application, insofar as it relies upon the abandoned loss of earnings claim, I am satisfied that the contents of the particulars and the actuary’s report were material and that (in subjective terms) the Plaintiff knew that there was no basis for the figures. The Plaintiff's reliance on his solicitors does not excuse the provision of false information to the Court or to the other party to the proceedings.

128. That said, the particulars of loss of earnings were withdrawn prior to trial and the actuary’s report was never put in evidence at trial (save as part of the discovery and in circumstances in which it was no longer relied upon). Furthermore, no evidence was given or adduced at the trial in support of the particulars, nor was there an affidavit of verification. I would have had no hesitation in dismissing the proceedings (notwithstanding their subsequent withdrawal) if the Plaintiff had sworn an unqualified affidavit of verification knowing material particulars to be unsubstantiated. However, no such affidavit was sworn.”

31. I am satisfied that the trial judge was entirely correct. There was no “evidence” for the purposes of s. 26 (1) and no verifying affidavit of the purposes of s. 26 (2).

32. It is clear from the foregoing that s. 26 has its limitations in that it does not provide for a situation where a bogus claim is made without an affidavit of verification but then withdrawn. I agree with the trial judge where he stated: – “126. The parties and their lawyers should appreciate that the grave concern as to the service of incorrect particulars is not necessarily cured by their abandonment on the eve of trial. The Defendant could have been seriously misled by the particulars and the actuary’s report when determining whether to make a lodgement or settlement offer and at what level.…”

33. Though the making of a bogus claim without an affidavit of verification which was withdrawn prior to the hearing may result in raising credibility issues for a plaintiff on crossexamination, the provisions of s. 26 do not apply. This ought to be a matter that is addressed by way of making suitable provision by statute.

34. The trial judge was correct not to accede to the submission made by the appellant/defendant to the effect that by discovering the actuary’s report in an affidavit of discovery that this amounted to an affidavit of verification for the purposes of s. 14. Clearly, discovering a document does not verify its contents.

35. By reason of the foregoing, I am satisfied that the appeal should be dismissed. As for costs, seeing as the plaintiff/respondent has been successful in resisting the appeal the provisional view of the court is that he should be awarded his costs of the appeal. Should the defendant/appellant wish to resist such an order he may do so by the furnishing of written submissions. Such submissions should address whether and to what extent in making an order for costs the court should have regard to the circumstances that gave rise to the s. 26 application. Should the plaintiff/respondent wish to reply to the submissions he may do so within 14 days thereafter. The submissions of both parties should not exceed 2000 words.

36. As this judgment is being delivered electronically, Faherty and Binchy JJ. have authorised me to record their agreement with it.