I am grateful to barrister Tom Vonberg  for sending me a copy of the Court of Appeal decision today in Howlett -v- Ageas [2017] EWCA Civ 1696.  Howlett & anr v Davies & anr- jt Final-1. Tom acted for the defendant.

 ” the mere fact that the opposing party has not alleged dishonesty in his pleadings will not necessarily bar a judge from finding a witness to have been lying: in fact, judges must regularly characterise witnesses as having been deliberately untruthful even where there has been no plea of fraud”

“… what ultimately matters is that the witnesshas had fair notice of a challenge to his or her honesty and an opportunity to deal with it. It may be that in a particular context a cross-examination which does not use the words “dishonest” or “lying” will give a witness fair warning. That will be a matter for the trial judge to decide. Secondly, the fact that a party has not alleged fraud in his pleading may not preclude him from suggesting to a witness in cross-examination that he is lying. That must, in fact, be a common occurrence.


  •  A judge was not precluded from making a finding of fundamental dishonesty even when there was no express pleading of fraud.
  • The issue was whether the party knew the nature of the allegations that were being made against them.
  • The “Gosling” test of fundamental dishonesty was accepted by the Court of Appeal.
  • On the facts of this case the claimants were well aware of the nature of the case they had to meet.


The claimants stated they had been injured in a road traffic accident involving a car driven by the first defendant. The first defendant’s insurer was a second defendant to the action.  The second defendant defended the action on the basis that the incident never happened.


The claim was resisted by Ageas, which was Ms Davies’ insurer. Ageas’ defence said
that it did “not accept the index accident occurred as alleged, or at all” and required
the Howletts “to strictly prove” that they “were involved in the index accident”, that it
was caused by negligence of Ms Davies, that they suffered injury and loss in
consequence and that the accident, injury and loss were reasonably foreseeable. The
relevant part of the pleading continued:
“If, which is denied, there was an accident as alleged, [Ageas]
will aver that it was a low velocity impact unlikely to cause
injury with injury being unforeseeable in any event.”
6. Credibility was expressly stated to be in issue, and paragraph 6 of the defence asserted
that the Howletts must prove their case “on a balance of probabilities, set against the
backdrop of the following facts and/or contentions”:
“(i) The Claimants [i.e. the Howletts] contend that on 27th
March 2013 they were passengers in the First
Defendant’s vehicle when the First Defendant [i.e. Ms
Davies] seems to have reversed down her drive way
and into collision with a parked and unoccupied X3
belonging to a Sharon Tutton.
(ii) They claim to have been injured as a result, yet the
damage to the X3 was de minimus.
(iii) Just 3 months prior, on 7th December 2012, the
Claimants contend they were passengers in the First
Defendant’s vehicle and the First Defendant was
involved in another road traffic accident wherein she
was the at fault driver and the Claimants contend they
were yet again injured.
(iv) The Second Defendant [i.e. Ageas] avers that this is
beyond coincidence and, instead, is indicative of a
staged/contrived accident and injury.
(v) This is corroborated by the fact that the Second
Claimant failed to disclose this earlier accident to his
medical expert.
(vi) Moreover, the First Defendant has been involved in at
least 4 road traffic accidents between 2011 and 2013.
Again, the Second Defendant avers that this is beyond
(vii) This is also corroborated by the lack of full cooperation
from the First Defendant, in particular as
regards an inspection of her vehicle.
(viii) The Claimants and the First Defendant give an
unlikely/uncorroborated journey purpose and have
given inconsistent/unlikely accounts as to injury.
(ix) The locus of the purported index accident is large and
unlikely to have obscured/hidden the presence of the
said X3.
(x) Despite there being damage and multiple injuries,
there would appear to have been no witnesses and
neither were the emergency services involved.
(xi) Despite being recommended physiotherapy, the
Claimants have failed to avail themselves of the same.
Adverse inferences will be sought at Trial.
(xii) The Claimants instructed geographically remote
solicitors either before or at the same time as they
sought medical advice.”
7. It was stated in paragraph 2 of the defence that Ageas did “not assert a positive case
of fraud at this stage”, but required the Howletts “to prove their case”. Paragraph 11
“Should the court find any elements of fraud to this claim, the
Second Defendant will seek to reduce any damages payable to
the Claimants to nil together with appropriate costs orders

The action proceeded to trial where the district judge rejected an application to strike out the Defence. The trial lasted for days and the judge dismissed the claimants’ action. The judge rejected an argument that the defence had been “insufficiently” clear. He found that the defendant had made the nature of its case wholly clear. He went on to find fundamental dishonesty. The claim was dismissed with costs.

The claimants appealed to the circuit judge, this was unsuccessful. They appealed to the Court of Appeal.


The Court of Appeal considered, and accepted, the “Gosling” test set out by His Honour Judge Moloney QC.

“The meaning of “fundamental dishonesty”
16. As noted above, one-way costs shifting can be displaced if a claim is found to be
“fundamentally dishonest”. The meaning of this expression was considered by His
Honour Judge Moloney QC, sitting in the County Court at Cambridge, in Gosling v
Hailo (29 April 2014). He said this in his judgment:
“44. It appears to me that this phrase in the rules has to be
interpreted purposively and contextually in the light of
the context. This is, of course, the determination of
whether the claimant is ‘deserving’, as Jackson LJ put
it, of the protection (from the costs liability that would
otherwise fall on him) extended, for reasons of social
policy, by the QOCS rules. It appears to me that when
one looks at the matter in that way, one sees that what
the rules are doing is distinguishing between two
levels of dishonesty: dishonesty in relation to the claim
which is not fundamental so as to expose such a
claimant to costs liability, and dishonesty which is
fundamental, so as to give rise to costs liability.
45. The corollary term to ‘fundamental’ would be a word
with some such meaning as ‘incidental’ or ‘collateral’.
Thus, a claimant should not be exposed to costs
liability merely because he is shown to have been
dishonest as to some collateral matter or perhaps as to
some minor, self-contained head of damage. If, on the
other hand, the dishonesty went to the root of either the
whole of his claim or a substantial part of his claim,
then it appears to me that it would be a fundamentally
dishonest claim: a claim which depended as to a
substantial or important part of itself upon dishonesty.”
17. In the present case, neither counsel sought to challenge Judge Moloney QC’s
approach. Mr Bartlett spoke of it being common sense. I agree.


The claimants’ basic argument was that it was not open to the trial judge to find “fundamental dishonesty” because dishonesty was not pleaded and not put to the relevant witnesses.

20. It is not, I gather, unusual for insurers to file defences comparable to that put in by
Ageas in the present case in response to claims in respect of personal injuries alleged
to have been caused by low-speed traffic accidents. Mr Vonberg submitted that the
approach that Ageas adopted here followed the guidance given by the Court of
Appeal (Brooke, Dyson and Carnwath LJJ) in Kearsley v Klarfeld [2005] EWCA Civ
1510. In that case, Brooke LJ, giving the judgment of the Court, said that it was
“puzzled … by the practice that has started to emerge in low velocity impact litigation
of requiring the defence to include a substantive allegation of fraud or fabrication”
(paragraph 41). The defendant, Brooke LJ explained, “does not have to put forward a
substantive case of fraud in order to succeed” (paragraph 47): it sufficed that the
defendants “set out fully the facts from which they would be inviting the judge to
draw the inference that the plaintiff had not in fact suffered the injuries he asserted”
(paragraph 45).
21. On the facts of that case, the defence had pleaded (in paragraph 3) that the relevant
incident had occurred when the defendant’s vehicle was travelling at only a few miles
per hour and (in paragraph 4) that an expert had concluded, among other things, that it
was “very unlikely” that the claimant had sustained injury and, hence, that the
defendant’s case was that “the claimant is fabricating his symptoms and … no injuries
were truly sustained by him”. In addition, paragraph 6 of the defence asserted that the
claimant was “put to strict proof”. Brooke LJ said (in paragraph 48 of the judgment):
“So long as a defendant follows the rules set out in CPR 16.5
(as this defendant did in [paragraphs 3 and 4 of the defence])
there is no need for a substantive plea of fraud or fabrication.
All that is necessary is to make clear that an assertion along the
lines of what is now para 6 is based on the assertions in paras 3
and 4.”
22. CPR 16.5, to which there is reference in this passage, requires a defendant to identify
in his defence which of the allegations in the particulars of claim he denies and, where
an allegation is denied, to “state his reasons for doing so” and, “if he intends to put
forward a different version of events from that given by the claimant”, to “state his
own version”. It can be contrasted with paragraph 8.2 of Practice Direction 16, which
provides that a claimant “must specifically set out” in his particulars of claim “any
allegation of fraud” on which he wishes to rely in support of his claim.
23. In Hussain v Amin [2012] EWCA Civ 1456, Davis LJ expressed concern (albeit
obiter) about “hybrid” defences to road traffic accident claims. He said in his
“18. I would, however, wish to add my own comments
about the pleaded defence of the second defendant [i.e.
the relevant insurer]. It was perfectly proper to join
issue on the primary facts alleged in the Particulars of
Claim and as to whether there had indeed been
negligence and whether the claimed losses had been
caused thereby. But the pleaded defence went much
further in paragraphs 7 and 9, setting out a number of
matters which, it was alleged, raised ‘significant
concerns’ as to whether or not this had been a staged
accident requiring further investigation. Possibly,
although I have my reservations, such a pleading could
be justified as an initial holding defence. But it is a
case pleaded on insinuation, not allegation. If the
second defendant considered that it had sufficient
material to justify a plea that the claim was based on a
collision which was a sham or a fraud, it behoved it
properly and in ample time before trial so to plead in
clear and unequivocal terms and with proper
particulars. Thereafter the burden of proof would of
course have been on the second defendant to establish
such a defence.
19. In the event, as I see it, the claimant was faced with a hybrid,
he in effect being required at trial to deal with an insinuation of
fraud without any express allegation to that effect pleaded.
Realistically, the trial judge dealt with the matter in the round,
concluding that the claim was not fabricated or fraudulent and
that the accident had not been staged. But this sort of pleading
should not be sanctioned.”
For his part, Lord Dyson MR said (at paragraph 2):
“Although the terms of the pleaded defence are not relevant to
the issues that have been raised in this appeal, I am bound to
register my concern with the way in which what in substance is
an allegation of fraud was pleaded.”



24. Mr Vonberg suggested four reasons for insurers being slow to include fully-fledged
pleas of fraud in their defences: first, that they lack direct knowledge of the relevant
events; secondly, that lawyers’ professional obligations mean that they must be slow
to allege fraud; thirdly, that a case is more likely to be allocated to the multi-track if
fraud is asserted; and, fourthly, that a trial judge concluding that a fraud defence has
not been proved is liable to find for the claimant without sufficiently considering
whether he has made out his case. While the third of these points seems unattractive,
the others are easier to understand. With respect to the last of them, it is perhaps worth
noting that it can be seen from the decision of the Court of Appeal in Francis v Wells
[2007] EWCA Civ 1350, [2008] RTR 13 that, whatever the position may be as
regards evidential burdens, the legal burden of proof remains on the claimant even
where a defendant alleges fraud. Lloyd LJ said (in paragraph 23 of his judgment):
“There was some debate before us about the burden of proof.
Clearly the burden is on the claimants to prove that the
collision occurred, by the negligence of [the defendant], and
that each claimant suffered damage. Unless that is proved on
the balance of probability, the claim of any particular claimant
cannot succeed. Even apart from the coincidence of three
events involving the third claimant and Mr Senghore there
would still be plenty of material on the basis of which to
question the reliability of the respective claimants, though no
obvious basis for saying that any of them had deliberately
invented their story. The judge might dismiss a claim, even in
those circumstances, as not proved on the balance of
probabilities but equally he might hold that, despite a good deal
of inconsistency and internal conflict, there was enough
common ground between the parties to find that the case was
proved. The legal burden then remains on each claimant, but
with the allegation of fraud by way of defence an evidential
Judgment Approved by the court for handing down. Howlett v Davies
burden would arise on the defendant, and a substantial burden at that.”



“31. Statements of case are, of course, crucial to the identification of the issues between
the parties and what falls to be decided by the Court. However, the mere fact that the
opposing party has not alleged dishonesty in his pleadings will not necessarily bar a
judge from finding a witness to have been lying: in fact, judges must regularly
characterise witnesses as having been deliberately untruthful even where there has
been no plea of fraud. On top of that, it seems to me that where an insurer in a case
such as the present one, following the guidance given in Kearsley v Klarfeld, has
denied a claim without putting forward a substantive case of fraud but setting out “the
facts from which they would be inviting the judge to draw the inference that the
plaintiff had not in fact suffered the injuries he asserted”, it must be open to the trial
judge, assuming that the relevant points have been adequately explored during the
oral evidence, to state in his judgment not just that the claimant has not proved his
case but that, having regard to matters pleaded in the defence, he has concluded (say)
that the alleged accident did not happen or that the claimant was not present. The key
question in such a case would be whether the claimant had been given adequate
warning of, and a proper opportunity to deal with, the possibility of such a conclusion
and the matters leading the judge to it rather than whether the insurer had positively
alleged fraud in its defence.
32. Further, I do not think an insurer need necessarily have alleged in its defence that the
claim was “fundamentally dishonest” for one-way costs shifting to be displaced on
that ground. Where findings properly made in the trial judge’s judgment on the
substantive claim warrant the conclusion that it was “fundamentally dishonest”, an
insurer can, I think, invoke CPR 44.16(1) regardless of whether there was any
reference to fundamental dishonesty in its pleadings. To my mind, there is force in
Judge Blair QC’s comment (in paragraph 54 of his judgment):

“I observe that one does not have to plead a claim for an award
of costs on the indemnity basis (as opposed to the standard
basis), so why would one have to expressly plead this more
remote stage of the costs determination exercise, namely for an
order for the enforcement of an adverse costs order?”

33. Turning to the facts of the present case, Ageas’ defence, while eschewing “a positive
case of fraud at this stage”, adverted to the possibility of the Court finding “elements
of fraud to this claim”; expressly stated that Ageas did “not accept the index accident
occurred as alleged, or at all”, that it was denied that “there was an accident as
alleged”, that credibility was in issue and that the Howletts were required to “strictly
prove” the matters specified in paragraph 7; and listed in paragraph 6 various matters
casting doubt on the claim, including facts that were stated in terms to be “beyond
mere coincidence and, instead, … indicative of a staged/contrived accident and
injury”. In my view, this pleading gave the Howletts sufficient notice of the points
that Ageas intended to raise at the trial and the possibility that the judge would arrive
at the conclusions he ultimately did. The Howletts cannot, in the circumstances, fairly
suggest that they were ambushed. Assuming, moreover, that the views that the judge
expressed in his substantive judgment are not open to objection because of how
matters were put (or not put) to witnesses in cross-examination (which I shall consider
in a moment), it was proper for Ageas to contend, and the District Judge to hold, that
the findings made in the judgment showed the claim to be “fundamentally dishonest”
within the meaning of CPR 44.16(1).”



“36. In the present case, Mr Bartlett argued that the Howletts were not cross-examined at
the trial on the basis that their claim was dishonest or even that there were dishonest
aspects to it. Accordingly, so Mr Bartlett said, the District Judge was not entitled to
make any finding of dishonesty in his substantive judgment, let alone to hold that the
claim was “fundamentally dishonest”. Mr Bartlett accepted that Mr Vonberg had put
inconsistencies to the Howletts in cross-examination and, more specifically, put to
them matters mentioned in the various sub-paragraphs of paragraph 6 of Ageas’
defence, but he maintained that that was not good enough.
37. For his part, Mr Vonberg accepted that he had not used the words “fraud” or
“dishonest” when cross-examining the Howletts, but said that that was not necessary
in the context. His recollection was that he had said things like “This is not true” to
the Howletts, and he suggested that it was patently clear at the time that he was
putting in issue the Howletts’ honesty, not just their credibility. He submitted, too,
that he had not been obliged to use any particular verbal formulation: what mattered
was that it was evident in the context that he was challenging the Howletts’ veracity.
Mr Vonberg further placed reliance on the fact that Mrs Howlett was asked in reexamination
whether the evidence she had been giving had been honest.
38. No transcript of the trial is available. That being so, we must, I think, look to the
District Judge’s judgment to assess whether the honesty of the Howletts’ evidence and
case was adequately explored during the oral evidence. In the light of the passages
from the judgment quoted in paragraph 13 above, the correct inference is, it seems to
me, that it was. Thus, the District Judge, as well as referring to the re-examination
question (paragraph 13(ii) and (viii)), said, for example, that he disagreed with the
suggestion that Ageas had not pleaded a case of dishonesty or cross-examined on that
basis; that there had been cross-examination to the effect that there had been
dishonesty, “so that the claimants knew what they were facing”; that he had himself
made it “perfectly plain from the get go” that he would be considering matters of
dishonesty and exaggeration; that every opportunity had been given to the Howletts to
defend themselves; that the matters to be decided would come as no surprise to either
party; that Ageas’ case had been “put fairly and squarely and so that the [Howletts]
might understand and answer that case being made against them”; and that there had
been sufficient explanation and description of the allegations made in the defence and
the way the case had been conducted on behalf of Ageas.
39. It is perhaps worth adding two comments. First, where a witness’ honesty is to be
challenged, it will always be best if that is explicitly put to the witness. There can then
be no doubt that honesty is in issue. But what ultimately matters is that the witness
has had fair notice of a challenge to his or her honesty and an opportunity to deal with
it. It may be that in a particular context a cross-examination which does not use the
words “dishonest” or “lying” will give a witness fair warning. That will be a matter
for the trial judge to decide. Secondly, the fact that a party has not alleged fraud in his
pleading may not preclude him from suggesting to a witness in cross-examination that
he is lying. That must, in fact, be a common occurrence.”


“I would dismiss the appeal. I agree with Judge Blair QC that the District Judge was
entitled to find that the claim was “fundamentally dishonest” and, hence, that CPR
44.16(1) applied. The relevant points were, as it seems to me, adequately
foreshadowed in Ageas’ defence and sufficiently explored during the oral evidence.”