Fundamental dishonesty: Difficult to assess, but potentially serious for personal injury claimants
Fletchers trainee Katelyn Williams on the new Criminal Justice and Courts Act
S57 of the Criminal Justice and Courts Act was introduced on 13 April 2015 into civil law, specifically in relation to personal injury proceedings.
This statute states that where a claim is found to be fundamentally dishonest in any way whatsoever the court must dismiss the whole claim even if there is some genuine element, unless to do so would cause “substantial injustice.”
This recent development has kept me (as a trainee at Fletchers Solicitors within the Serious Injury team) very aware of the potentially serious ramifications of such a principle being applied to one of our cases. My team deals with cases which vary in value from £25,000 up to multi-millions of pounds. This concept therefore has the potential to have an adverse effect on not only the recoverability of our costs, but also on each of our client’s settlement damages.
Such a concept has posed a number of issues: should, for example, claiming for four taxi journeys when only one was actually incurred mean that a case which is catastrophic in nature and worth multi-millions of pound be disallowed on the basis that the claimant has been dishonest? If not, where should the line be drawn?
Prior to this rule, a finding of fundamental dishonesty simply resulted in the claimant losing the protection of qualified one-way costs shifting (QOCS). Lawyers will be aware that the basis of QOCS is that an unsuccessful claimant will not be required to pay the defendant’s costs but the defendant must pay a successful claimant their own costs. It seems unlikely that the disapplication of QOCS (awarding full recovery of the costs of a defendant) would follow where the dishonesty goes only to part of a claim. However it is yet to be seen whether the court will feel bound to interpret fundamental dishonesty in relation to QOCS in the manner that would be required by s57.
Obvious fundamental dishonesty
An unreported case in 2015 involving a Mr Burnett, a semi-professional footballer, concerned him tweeting about playing a match just 24 hours after he had claimed for a whiplash injury.
He originally claimed £2,000 in damages for an accident but talked about his skills on the pitch a day later on social media. He claimed that injuries to his neck and back meant he would be unable to play for his team. He was subsequently ordered to pay £11,000 in costs when the court found his claim to be fundamentally dishonest.
Here, the claimant had been fundamentally dishonest in relation to the whole of his claim and should not receive any damages. If anything, he deserved more of a punishment by trying to ‘cheat the system’.
However, can the same really be said for claimants who do have a genuine claim and it is merely a small part of their claim that they have been dishonest about?
In Hughes, Kindon and Jones v KGM (2016), all three claimants alleged they had suffered injuries lasting 12 months following what was a very minor incident. At trial, a number of inconsistencies in the claimant’s evidence were highlighted, including the nature of the injuries suffered, failure to seek medical attention, and — in the case of one claimant — failure to mention the incident and injuries to their GP several months later. The claim was struck out for the claimant’s failure to provide witness evidence, with costs awarded to KGM.
However, one judge found that the impact was sufficient to have caused injury to Hughes and Kindon but for a period of just two weeks, rather than the 12 months claimed. On this basis, he awarded the pair £750 each in damages. The defendant insurer, using s57, said it would be unfair for them to still be liable for their costs.
In striking out the claims in their entirety, the judge said that the two claimants had presented a deliberately inaccurate position to the medical expert for financial gain. He also ruled that the claimants would not suffer substantial injustice from the decision. The claimants lost QOCS protection and were ordered to pay insurer costs of £6,100 and permission to appeal was refused. It would therefore seem the courts are adopting a very strict approach in this area.
Should mild exaggeration be enough to render a claim completely unsuccessful?
In the case of Gosling v (1) Hailo (2) Screwfix (2014), the claimant suffered a serious knee injury, requiring an arthroplasty operation, following an accident with a ladder manufactured by Hailo and sold by Screwfix.
The claimant claimed serious restrictions in his ability to function and founded a very large part of his case on his ongoing disabilities. The defendants conducted covert surveillance to see whether the claimant’s ongoing symptoms were as significant as he claimed. Footage showed the claimant shopping at some length in the morning without using a crutch. However, the same afternoon, the claimant attended a medical appointment during which he said he had constant pain, used a crutch and his wife did his shopping.
The medical experts were shown the footage and stated in a joint report that it showed the claimant was being dishonest about his problems. On being presented with the footage, the claimant settled with the first defendant for a significantly reduced amount of damages (£5,000 against the £80,000 pre-footage value of his claim) plus costs, and discontinued the case against the second defendant as they sought to argue that the claim regarding both liability and quantum was fundamentally dishonest.
It was held in this case that fundamental dishonesty was so clear the matter could be dealt with on paper and not by way of an oral hearing. Despite the arguments of a hearing wasting costs, being disproportionate and encouraging satellite litigation, did the claimant not deserve a right to have himself heard and convince the court that the papers were inaccurate? The footage showed the claimant was actually limping and still struggling despite not using a crutch.
When does exaggerating turn into being fundamentally dishonest? It would seem that where dishonesty goes to a large part of the claimant’s claim to damages, it should be characterised as being fundamental to the claim. Thus, assessing what constituted fundamental dishonesty requires placing a value on the dishonesty to the claim.
What should we be doing about it as lawyers?
I have been researching this particular topic, primarily to advise many of our clients and keep them up to date on this recent development. Essentially, clients need to be aware that any slight exaggeration of their injuries or any dishonesty in their claim, however small, has the potential effect of it being struck out and no damages being awarded.
In terms of putting these thoughts into action, I have been amending the covering letters for witness statements and schedule of losses which we send to our clients to read:
Under the Criminal Justice and Courts Act 2015 the defendant can apply for dismissal of the claim if the court is satisfied that, on the balance of probabilities, you have been fundamentally dishonest in relation to the primary claim or a related claim.
So far, it would appear that intentional deceit and also mild exaggeration are enough for claims to be held as fundamentally dishonest and to be struck out as a result. The outcome of a small part of the claim being dishonest is yet to be seen. However, judging from the strict interpretation of the law in the cases mentioned, it is likely the court will have no hesitation in applying the principle in a catastrophic case unless substantial injustice was to be caused.
The question of fundamental dishonesty is yet to receive the consideration and attention that it deserves. Both the process and the basis for such a finding are likely to develop as the rule is applied and such application is tested.
Katelyn Williams is a trainee solicitor at Fletchers. She studied a law degree at the University of Sheffield and is currently completing her Legal Practice Course at BPP Law School alongside a training contract.
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