2019 AND CIVIL PROCEDURE – THE YEAR IN REVIEW (4): FUNDAMENTAL DISHONESTY

There have been relatively few cases about fundamental dishonesty this year.   However the cases that have been reported have all been interesting.  The first involves a failing adverse to the defendant. The second highlights the point that there is no need to wait for an assessment of damages. The third relates to the “substantial injustice” escape route to a fundamental dishonesty finding. The final post highlights the importance of telematic evidence.

FEBRUARY: AN ELEMENT OF BAD FAITH ON THE PART OF THE DEFENDANT

The judgment of HHJ Hampton in  Smith -v- Ashwell Maintenance Limited (Leicester County Court 21/01/2019) contains much that is critical of a defendant attempting to argue fundamental dishonesty. A witness summary provided by the defendant was so inaccurate that the judge was driven to the conclusion that there was an element of bad faith.  The defendant’s experts evidence did not go unscathed.

“I am driven to the conclusion that there was an element of bad faith on the part of the Defendant in seeking to introduce this witness summary in this way.

Exaggeration is not necessarily fundamental dishonesty: when the defendant digs a big evidential hole for itself.

MAY: NO NEED TO WAIT FOR AN ASSESSMENT OF DAMAGES

A post in May looked at the judgment in  Patel v Arriva Midlands Ltd & Anor [2019] EWHC 1216 (QB) where it was held that  a defendant did not have to wait until quantification of damages before a Section 57 application could be heard.

“In my judgment, the costs of full quantification (both to the parties and in terms of the call on the resources of the court) are likely to be both unnecessary and disproportionate, in breach of the Overriding Objective.”

Fundamental dishonesty proven: no need to wait for assessment of damages

AUGUST: A DETAILED EXAMINATION OF THE “SUBSTANTIAL INJUSTICE” ARGUMENT

A post in August looked at the possible escape route to a finding of fundamental dishonesty. Section 57 (2) provides an exception if the court finds that the claimant would suffer “substantial injustice if the claim were dismissed.” There are relatively few decisions on this issue. To my knowledge there have been no cases where a claimant has successfully used the “substantial injustice” route to avoid the penalties.

“… it seems to me plain that substantial injustice must mean more than the mere fact that the claimant will lose his damages for those heads of claim that are not tainted with dishonesty. That must be so because of s 57(3). Parliament plainly intended that sub-section to be punitive and to operate as a deterrent… it would effectively neuter the effect of s 57(3) if dishonest claimants were able to retain their ‘honest’ damages by pleading substantial injustice on the basis of the loss of those damages per se. What will generally be required is some substantial injustice arising as a consequence of the loss of those damages.”

Fundamental dishonesty – the “substantial injustice” argument: three key cases.

NOVEMBER: FUNDAMENTAL DISHONESTY AND TELEMATICS

One of the interesting cases of the year is the decision of HHJ Gargan in Wise -v- Hegarty & Alpha Insurance (9th July 2019) a copy of which is available here.  OT APPROVED CRAWFORD D10YJ706 WISE HEGARTY ALPHA 09.07.19 (MIDD) – J v4

This was a case where neither the claimant or defendant driver attended the trial. The insurer established fundamental dishonesty by telematic evidence.  The judge found that a finding of fundamental dishonesty can be made when the claimant fails to attend trial.  An expert was called on the telematic device that had been fitted to the defendant’s car.

 “Mr Street was then asked about whether there could have been a collision at some other time during the 7 February or, indeed, on the days either side of that date. His evidence is that there is nothing to suggest that there was any untoward incident involving this vehicle on any of those three dates. The box is sufficiently sensitive that it has an accelerometer which measures the extent to which the vehicle accelerates or stops or the G forces which are applied to it. G events can fall into four categories”