11 Oct 2016

Fundamental dishonesty: Difficult to assess, but potentially serious for personal injury claimants

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.

Read more about it here: http://bit.ly/2e4qmwo

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