I think WannaB actually asked if it was a flawed system because it relied on honesty, not whether he would get into trouble as a result of lying....
The answer is not as simple as you would expect WannaB - there is no reliable medical record system in the UK. General Practice produces as near as we can get, but anyone can 'restart' their record and GPs often do not pick up medical episodes for various reasons - emergency admission and wrong GP coding, private treatment etc. Moreover, the Government's national computer system, apart from wasting £1700 for every man woman and child, has driven a considerable number of people to being LESS honest than before and to developing pseudonyms. The recent proposed legislation to allow 200 agencies access will not help.
In the absence of a state system that is reliable it is hard to see what else can be done. In fact most people are very honest, even when honesty costs them their job. The real problem is that most people, pilots included, dont know the significance of their medical past, and often dont know the diagnosis. I suspect 99% of non disclosure is totally innocently undertaken.
And despite the soothsayers of doom who tell you that hell will freeze over if you lie, I am not aware of any individual who has been proescuted for non disclosure. Does anyone else? The insurance issue is a different matter but there has to be adequate proof and if the policy holder is dead, that isnt easy to prove.