29
Sep
20
Articles, Personal Injury
Fundamental Dishonesty – recent decisions and practical steps for practitioners

Personal Injury analysis: Dominique Smith, barrister specialising in Personal Injury at 1 Chancery Lane, discusses the latest developments in relation to fundamental dishonesty, including how the courts deal with such allegations, and what practical steps practitioners should take when dealing with, or making, such an application.

 

Introduction

For several years, the courts have been faced with personal injury claims where allegations are raised to suggest they may have been exaggerated or are fraudulent. Since the introduction of the Qualified One-way Costs Shifting (“QOCS”), defendants have an opportunity to obtain their costs pursuant to CPR 44.16(1) from a claimant who is found to be fundamentally dishonest. Consequently, it is not uncommon for allegations of fundamental dishonesty to be raised in the course of litigation.

A claim is fundamentally dishonest if the dishonesty goes to the root of either the whole claim, or a substantial part of it (Howlett v Davies [2017] EWHC Civ 1696). The test for dishonesty was set out in Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67. Ultimately, the court has to consider what the actual state of the individual’s belief or knowledge as to the facts was, and secondly, if a dishonest state of mind is established, whether the conduct of the individual was dishonest in accordance with the objective standards of ordinary decent people. Provided the test is satisfied, and the dishonesty is considered to go to the root of the claim or a substantial part of it, fundamental dishonesty is likely to be made out.

Practitioners either making a fundamental dishonesty application, or indeed responding to such an application, often wonder how the courts will approach inconsistencies in evidence and whether those inconsistencies in themselves will amount to dishonesty. This article seeks to consider:

  • the latest developments in the case law concerning fundamental dishonesty;
  • what recent county court judgments tell us about the way the courts will approach fundamental dishonesty;
  • how fundamental dishonesty may be raised, and the tactics and practical steps practitioners may consider when facing or making such allegations;
  • whether the type of claim has an impact on the approach taken by practitioners or the courts.

 

Latest developments

Many practitioners are aware of the judgments of Mr Justice Martin Spencer concerning fundamental dishonesty, such as Molodi v Cambridge Vibration Maintenance Services (1) Aviva Insurance Ltd (2) and Richards & Anor v Morris [2018] EWHC 1289 (QB). Mr Justice Martin Spencer recently delivered a further judgment in Pegg v Webb (1) Allianz Insurance PLC (2) [2020] EWHC 2095 (QB) that practitioners should be aware of. In Pegg, the claimant did not seek medical assistance after his accident, except for undergoing physiotherapy arranged by his solicitors. The claimant further failed to inform his medical expert of a separate accident, in which he sustained injuries, following the index accident. The claimant was found to be fundamentally dishonest.

Pegg emphasises that if a claimant does not seek medical assistance after an accident, whether by attending their GP, A&E or otherwise, and only has medical assistance when arranged by their solicitors, that should immediately raise a suspicion in the mind of the Judge. In addition, the failure of the claimant in Pegg to notify his expert of injuries he sustained in a separate accident pointed to the conclusion he had been dishonest. This is worth bearing in mind, particularly when claimants have made omissions of recent relevant injuries to their experts.

Another decision for practitioners to be aware of is that of Garraway v Holland & Barrett Limited (2020), which was a county court appeal. In Garraway, there was a considerable discrepancy between the claimant’s claimed injuries and the documentary evidence, as well as the experts’ views of her injuries. Surveillance footage was utilised, which further contradicted her account. Consequently, the claimant was found to have exaggerated her symptoms and misled her experts, leading to a finding of finding of fundamental dishonesty.

 

What do county court decisions such as Crosby v Wakefield MDC (2020) and AX and BX (by their Litigation Friend CX) v ZZ (2019) tell practitioners about how the Courts will approach fundamental dishonesty?

Crosby and AX emphasise that there must be cogent evidence of dishonesty before a finding will be made. In addition, should a claimant come across in cross-examination as a credible and honest witness, the court is unlikely to make such a finding.

In Crosby, the defendant considered that the claimant had grossly exaggerated her claim, particularly in relation to past care and assistance, such that she had been fundamentally dishonest. However, whilst the past care claimed was deemed to be excessive, the court found that the claimant was an honest witness following cross-examination and did not consider the claim had been deliberately or dishonestly exaggerated. Despite the defendant’s best efforts, the claimant’s credibility was such that the court did not accept she had been fundamentally dishonest.

In AX, however, there were a number of issues that troubled the court, particularly the credibility of the litigation friend. AX arose out of a road traffic collision, whereby two children (the claimants) were alleged to have sustained injuries in their father’s car.  When reporting the collision to the police on the day of the accident, the litigation friend had said that no one was injured as a result of the collision, contrary to their claims. In addition, there was a delay in the claimants seeking medical attention, as well as inconsistencies in the reasons given for that delay. Further inconsistencies were apparent in respect of the alleged injuries sustained. The evidence was such that a finding of fundamental dishonesty was made.

 

When and how may a defendant raise fundamental dishonesty?

Defendants do not need to plead fundamental dishonesty in order to raise it (Howlett v Davies [2017] EWCA Civ 1696). However, claimants must be given an adequate warning of, and a proper opportunity to deal with, the possibility of such a conclusion and the matters leading a Judge to it. It is common course for dishonesty to be put to a claimant in the course of cross-examination at trial and for claimants to be warned of fundamental dishonesty being in issue prior to trial.

What is the best tactical approach when dealing with these types of claims?

For claimants, it is vital that inconsistencies are explored early on in proceedings to determine whether the allegations raised are well founded and are likely to bite at trial. Conferences with the client will also assist in determining whether the claimant is likely to be a credible and straightforward witness. Where inconsistencies are present, these should be addressed in the evidence, where possible.

For defendants, it is important to either gather evidence early on to support an allegation that a claimant has been fundamentally dishonest, and to comb through the evidence already disclosed. It may be that the disclosure of the claimant’s medical records may alert a defendant to the fact the claimant has relevant injuries that they have not disclosed, thereby misleading their expert. Defendants should also consider gathering surveillance evidence of a claimant, which can be particularly useful in such applications, as well as requesting social media evidence and metadata. In holiday sickness claims, for example, Instagram and Facebook posts may indicate that at the date of injury, the claimant was not sick in bed, yet was participating in an excursion.

 

What practical steps should be taken by lawyers dealing with or pursuing an allegation?

Defendants may wish to raise fundamental dishonesty prior to trial, or indeed to alert claimants to inconsistencies, exaggerations or untruths in their evidence. This can be effective in causing claimants to discontinue their claims. Those acting for claimants, however, should explore with their clients whether the inconsistencies identified permit of a logical explanation. It may well be that a claimant has failed to disclose previous road traffic accidents, for example, despite being specifically asked about the same by their expert. Conferences with a claimant facing such an allegation will no doubt be useful in deciding the appropriate course forward.

If a claimant decides to discontinue in the face of allegations of fundamental dishonesty, they should bear in mind that is not without risk. A defendant may make an application for a finding of fundamental dishonesty post-discontinuance. The timing of the discontinuance will be relevant to that application. In Zurich Insurance PLC v David Romaine [2019] EWCA Civ 851 (CA), LJ Haddon-Cave stated that the fact that a claimant discontinues proceedings shortly after being confronted with evidence or an accusation of falsity is likely to be a relevant factor, because “a claimant who discontinues immediately upon realising that “the game is up” is naturally… to be contrasted with the claimant who contumaciously presses on nevertheless”. LJ Haddon-Cave further emphasised that early discontinuance should not be seen to be used by claimants or lawyers as an inviolable means of protecting themselves from the consequences of dishonest conduct. Defendants, however, should be aware that the claimant may need to be cross-examined at such an application, and that it is likely a claimant may be permitted to respond to the application by way of a witness statement. As such, applications post-discontinuance can take some time to get to court and may be costly.

 

Does the type of claim have an impact on the type of approach taken by either practitioners or the Courts to allegations of fundamental dishonesty?

In short, no. While there is more specific case law in respect of fraudulent road traffic claims, such as in Molodi, the test for dishonesty remains the same. The courts are well alive to the issue of fundamental dishonesty and will not treat allegations of fundamental dishonesty differently in different types of personal injury claim.

This article first appeared in LexisNexis

Written by or involving: Dominique Smith

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