A HUDDERSFIELD woman accused of making a fraudulent compensation claim for injuries after a road accident with a Kirklees councillor can keep her £3,500 payout.
Pub waitress Beverley Handley, 28, of Rawthorpe, fought off a bid to strip her of the cash.
She was accused of lying to doctors about the extent of her injuries, forging taxi receipts and making up a story that someone else was in the car with her.
But Appeal Court judges ruled that, despite the fierce attack on her credibility - motor insurers said her claim was "tainted by fraud" - she was entitled to some compensation.
Lord Justice May said a Sheffield County Court judge who awarded her £3,551 damages in July had justifiably accepted her claim that whiplash had caused her long-term neck and back pain.
Miss Hanley, of St James Way, was injured when a car drove into the back of hers in Brockholes Road, Brockholes, on November 28, 2000.
From an early stage, motor insurers for the other driver, Tory councillor Donald Firth, of Penistone Road, New Mill, said her claim for up to £15,000 in compensation was "tainted by fraud".
She had only a provisional licence at the time and could not legally drive unaccompanied. The insurers disputed her statement that there was a qualified driver in the car with her.
Lord Justice May said she had "told a tale" to Judge Bentley at the county court that the man in the car with her had made off immediately after the crash as there was a warrant out for his arrest.
Finding "on the balance of probabilities" that Miss Hanley had been by herself, Judge Bentley had said that, if her account was true, the man "seems to have made himself remarkably scarce, extremely quickly".
Neither Clr Firth nor a woman who worked at a nearby petrol station, had seen him.
Miss Hanley, who Lord Justice May said, had a conviction for burglary, had also sought £650 for taxi fares to and from work, saying the accident had left her unable to drive.
Clr Firth's insurers even went to the lengths of calling in a handwriting expert in a bid to prove the receipts were forged.
Lord Justice May said Judge Bentley, in disallowing Miss Hanley's claim for the taxi fares, had made "no positive finding that the receipts were forgeries, but he came quite close to doing so".
The insurers also said Miss Hanley had misled medical experts who examined her and exaggerated her injuries.
Lord Justice May said a claim that the accident had triggered post-traumatic stress disorder had "fallen away" after a psychiatrist retracted his opinion on finding out more about Miss Hanley.
But in making the damages award - despite his "misgivings" - Judge Bentley ruled that Miss Hanley's whiplash injury was genuine and that she was still suffering pain.
Mr Timothy Edge, for Clr Firth's insurers, told the Appeal Court the judge's decision was "plainly wrong".
He said all Miss Hanley's claim should have been thrown out as it was "tainted by fraud".
But Lord Justice May said he knew of no legal authority for the idea that an accident victim's entire claim should be dismissed simply because part of their account had been disbelieved.
Judge Bentley had been "extremely cautious" in assessing Miss Hanley's credibility and his ruling was "not open to criticism".
The insurers were refused permission to appeal.