CLEAR FINDINGS OF FUNDAMENTAL DISHONESTY: NO SUBSTANTIAL INJUSTICE IN APPLYING THE PRINCIPLE: CLAIMANT IN AT THE DEEP END

I am grateful to barrister Nadia Whittaker  for sending me a copy of the judgment of HHJ Sephton QC (sitting as a High Court judge) in Iddon -v- Warner, a judgment given on the 2nd March 202. A copy of the transcript is available here    Iddon v Warner – Judgment-1.  There are useful considerations of the law of fundamental dishonesty, coupled with a consideration of arguments in relation to substantial injustice.

“In my judgment, section 57 of the Criminal Justice and Courts Act 2015 is frankly punitive in character. A claimant who is fundamentally dishonest is penalised by having his claim dismissed. Parliament has plainly concluded that the aim of addressing the evils of dishonest claims justifies depriving a claimant of the part of the claim he can prove and providing the defendant with the windfall of not having to satisfy a lawful claim, albeit one that may have been dishonestly presented.”

THE CASE

The claimant brought an action for negligence against the defendant doctor. Liability was admitted. The claimant claimed substantial damages on the grounds that she was incapacitated. In fact the claimant was still taking part in strenuous sporting activities.   The defendant discovered this (by way of internet searches).  The claimant attempted to explain these matters and give evidence in response.  The judge did not accept the claimant’s evidence.  The claimant was found to be fundamentally dishonest.  She would have received damages of £70,050.32.   The judge rejected an argument that there was substantial injustice in applying  fundamental dishonesty.  Consequently the £70,050.32 was set off against the claimant’s costs liability to the defendant. The claimant had received £105,000 on account of damages and £100,000 on account of costs. The judge ordered that these be repaid.

 

THE CLAIMANT’S CLAIM FOR DAMAGES

The value of the claim was increased after issue.

17.By order dated 18 December 2018, DJ Stonier granted Mrs Iddon permission to increase the value of her claim to “damages exceeding £200,000” and to amend her Particulars of Claim. (The proposed amended Particulars of Claim had been served on the defendant on 15 May 2018.) So far as relevant, the amendment added the following to paragraph 20 of the Particulars of Claim:
c.Severe chronic post-surgical pain and associated dysesthesia and numbness in the left chest wall, left shoulder/arm and both hips causing severe disability, fatigue and psychological injury”
Mrs Iddon verified the Amended Particulars of Claim with a statement of truth dated 1 May 2018.

 

THE SCHEDULE OF LOSS

A schedule of loss was served claiming £941,182.03.

Judgment was entered and an interim payment of £100,000 was made on account of damages and £100,000 on account of costs.

 

THE DEFENDANT’S EVIDENCE

23. On 11 December 2019, Mr Richard Vaughan made a witness statement. Mr Vaughan is an intelligence analysist. His witness statement disclosed (amongst other things) that:
  • On 2 September 2016 Chris Barnes posted on Facebook the following: “Sara is not a victim but a fighter carrying on with her life running and swimming like she did before.”
  • On 1 November 2017, Sara Iddon posted on Facebook the following: “Fantastic night swim with Christine, Swimease 30/10/17, brilliantly organised and really good fun””
  • A Google search revealed that Sara Iddon finished 45th in the Great North Swimrun 2018 which took place on 9 June 2018.
  • A Google search revealed that Sara Iddon and Andrew Iddon finished 100th and 101st in the Great Scottish Swim Aquathon which took place on 25 August 2018.

THE DEFENDANT’S AMENDED DEFENCE: ALLEGING FUNDAMENTAL DISHONESTY

The defendant amended its defence to plead fundamental dishonesty.

THE CLAIMANT’S WITNESS STATEMENT

35. The claimant’s solicitors served witness statements made on 6 March 2019 by Mr and Mrs Iddon, Thomas Barnes and Christopher Barnes. I identify two material themes that run through these witness statements: firstly that Mrs Iddon is now significantly disabled such as to require care and support from her husband and father and secondly, that Mrs Iddon had been a keen sportswoman prior to her mastectomy and the attendant treatment but that now, she could no longer undertake the running and swimming that she used to.
36. It will be recalled that material exhibited to Mr Vaughan’s witness statement suggested that Mrs Iddon had been “carrying on with her life running and swimming like she did before” and had participated in 3 open water swimming events. This was a stark contrast to the picture painted in the witness statements of 6 March 2019 and in paragraph 20(c) of the Amended Particulars of Claim.
39. I emphasise the significance of the evidence that Mrs Iddon gave in her witness statement of 1 June 2020 and in her evidence before me: She admits that her witness statement of 20 January 2020, verified by a statement of truth, contained a number of untruths that she had advanced in answer to Mr Vaughan’s first witness statement. She also admits that she recruited her husband and her friend into supporting her dishonest account. In my judgment, it is fair to characterise Mrs Iddon’s conduct as inciting, and then participating in, a conspiracy to pervert the course of justice.

OMISSIONS IN MY WITNESS STATEMENT – THEY WERE MY SOLICITOR’S FAULT

The judge dealt with the claimant’s evidence that there were omissions in her statement due to failures of her solicitors.

43. Mrs Iddon told me in evidence that she had informed her solicitors about the Worden Park Run, but she says that they must have forgotten about it when they were preparing her witness statement of 1 June 2020. I reject that evidence. The circumstances in which the witness statement of 1 June 2020 was prepared were that Mrs Iddon had already been caught out in lies. The forensic purpose of the witness statement was to allow her to make a clean breast of events and to throw herself on the mercy of the court. In my judgment, it is inconceivable that a solicitor would have omitted to refer in a draft witness statement to an event as significant as the Worden Park run if he or she had received instructions about it. Furthermore, the (allegedly complete) list of events in which Mrs Iddon admitted participation contained in paragraph 7 of the Reply is clear and in chronological order. I am sure that Mrs Iddon was advised to read the Reply carefully before making a statement of truth. I cannot believe that she missed the fact that the Worden Park run did not appear on the list. In my view, this is further evidence that Mrs Iddon’s solicitors carefully identified the events in which she participated and that Mrs Iddon did not point out that the Worden Park run was missing from the list.

 

WITNESSES WHO DID NOT ATTEND

Some of the witnesses for the claimant who gave statements did not attend court.

40. None of Mrs Iddon’s other factual witnesses gave evidence at the trial. Mr Skeate invited me to take account of the evidence contained in their witness statements even though they were not called to give evidence. In the circumstances of this case, I draw the conclusion that the witnesses were not prepared to face cross-examination on their statements. I place no reliance on the evidence in the witness statements.

 

FINDINGS OF FUNDAMENTAL DISHONESTY

The judge made clear findings of fundamental dishonesty.

Fundamental dishonesty
91. Mrs Iddon’s actions in this litigation must be measured against my findings that she did not suffer from chronic pain of any significance and that she trained for, and performed in, various sporting events in 2017 and 2018. Notwithstanding the reality as I have found it to be, Mrs Iddon:
  • Asserted to the medical experts that she suffered from debilitating pain and concealed from them her participation in her sporting activities.
  • Made and served her witness statement of 6 March 2018, which advanced the account that she was severely disabled by chronic pain.
  • In May 2018, verified Amended Particulars of Claim in order to advance the claim that she suffered “Severe chronic post-surgical pain and associated dysesthesia and numbness in the left chest wall, left shoulder/arm and both hips, causing severe disability, fatigue and psychological injury.”
  • In January 2020, recruited her husband and Amanda Anstey to put forward a false account of her sporting activities.
  • Made and served her witness statement of 20 January 2020 in which she denied training or participating in three open water swims when in fact she had done so.
  • In her witness statement of 1 June 2020, represented that she had made full disclosure of her sporting activities when she knew that the list of activities was incomplete because the Worden Park run was not mentioned.
  • In her witness statement of 1 June 2020, advanced the excuse that she had previously lied because she was anxious about being prosecuted for possession of cannabis oil, when in fact she had never possessed cannabis oil. She also falsely claimed that it was only by using hemp oil and cannabis oil that she was able to participate in her sport.
  • Verified with a statement of truth two schedules of loss in which, by reason of her alleged chronic pain, damages exceeding £900,000 were sought.
  • Continued to advance her account that she was in chronic and debilitating pain when she was in the witness box.                                  92. I have no doubt that Mrs Iddon was well aware of her training and sporting achievements and of the fact that she was not suffering debilitating chronic pain. I find that she deliberately took the steps I have outlined in the preceding paragraph of this judgment in order to mislead the defendants and the court about the extent of her injuries so as to make the consequences of the defendant’s breach of duty appear much more serious than they were. By the standards of ordinary decent people, her actions were dishonest. What is more, I believe that Mrs Iddon knew that they were dishonest.                                                             93. In my opinion, Mrs Iddon’s dishonesty amply justifies the adjective “fundamental”. I approach the issue from three directions. Firstly, to deploy the dichotomy proposed by HHJ Moloney QC and approved by the Court of Appeal in Howlett v Davies, Mrs Iddon’s dishonesty did not go to some incidental or collateral part of the claim; it went to the heart of her claim. Secondly, to adopt the words of Julian Knowles J in LOGOC v Sinfield, her dishonesty has substantially affected the presentation of her case – indeed, it has pervaded her case to the extent that Mrs Iddon has scarcely taken any step in the action that was not tainted by dishonesty. Thirdly, the effect of her lies was to seek to inflate the value of a case which I have held to be worth just over £70,000 into a case worth over £900,000. In reaching the conclusion that Mrs Iddon has been fundamentally dishonest, I have carefully excluded from my consideration that it is probable that Mr Iddon and Christopher Barnes were dishonest too: the statute requires me to consider whether the claimant has been fundamentally dishonest.
SUBSTANTIAL INJUSTICE

An interesting aspect of this judgment is that it considers submissions in relation to “substantial injustice” in detail.  The fact that the claimant had used the interim payments to buy a house did not amount to substantial injustice.

94. It follows that I am required to dismiss the claim unless I am satisfied that the claimant would suffer a substantial injustice. Mr Skeate urges upon me the submission that Mrs Iddon would suffer substantial injustice. He submits that Mrs Iddon has apologised for her dishonesty and has shown remorse. He points out that if her claim is dismissed, Mrs Iddon will not be able to obtain the therapy she says she needs. He submits that the tortfeasor will escape a liability that it rightfully hers. He pointed out that Mrs Iddon has used the interim payments she has received to purchase her current home. If her claim is dismissed she would have to sell it.
95. In order to weigh these submissions, it seems to me that I must consider the context in which the statute was enacted.
96. The toxic effects of dishonest claimants is well-known. They were aptly summarised by Moses LJ in South Wales Fire and Rescue Service v Smith [2011] EWHC 1749 (Admin) as follows:
“2.       For many years the courts have sought to underline how serious false and lying claims are to the administration of justice. False claims undermine a system whereby those who are injured as a result of the fault of their employer or a defendant can receive just compensation.
  1. They undermine that system in a number of serious ways. They impose upon those liable for such claims the burden of analysis, the burden of searching out those claims which are justified and those claims which are unjustified. They impose a burden upon honest claimants and honest claims, when in response to those claims, understandably those who are liable are required to discern those which are deserving and those which are not.
  2. Quite apart from that effect on those involved in such litigation is the effect upon the court. Our system of adversarial justice depends upon openness, upon transparency and above all upon honesty. The system is seriously damaged by lying claims. It is in those circumstances that the courts have on numerous occasions sought to emphasise how serious it is for someone to make a false claim, either in relation to liability or in relation to claims for compensation as a result of liability.”                                                                             97. In my judgment, section 57 of the Criminal Justice and Courts Act 2015 is frankly punitive in character. A claimant who is fundamentally dishonest is penalised by having his claim dismissed. Parliament has plainly concluded that the aim of addressing the evils of dishonest claims justifies depriving a claimant of the part of the claim he can prove and providing the defendant with the windfall of not having to satisfy a lawful claim, albeit one that may have been dishonestly presented. The only escape from the default position of dismissal arises if the injustice the dishonest litigant suffers is “substantial.”                                98.  I respectfully agree with Julian Knowles J when he said in Sinfield 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.”                                                     99. I consider that I have to have well in mind the damage done to our system of justice by dishonest claims in general and by this claim in particular in deciding whether this claimant would suffer “injustice” if her claim were dismissed. I note that Mrs Iddon was dishonest in relation to her own claim (a “primary claim” to use the words of section 57(1)) so that she stood to benefit personally from her lies. Different considerations might have applied if her dishonesty was in relation to a “related claim” so that her lies would not have benefitted her directly.                                                                                                                                         100. Mrs Iddon did indeed apologise in her witness statement of 1 June 2020 and again when she gave evidence. I find that her apology was offered because she had been caught out in dishonesty and not because she felt genuine remorse. If she were genuinely remorseful, Mrs Iddon would have offered the court a truly honest account of her activities. Instead, as I have found, she simply substituted for the account in which her lies had been discovered, another untruthful version.                                                                101. I do not think that Mrs Iddon suffers “substantial injustice” merely because Dr Warner is not required to pay damages and because Mrs Iddon does not have the funds to seek the therapies she wants: these are inevitable corollaries of the operation of the statute.                                                                                                                                                                           102. I was initially inclined to think that Mr Skeate was on stronger ground in submitting that Mrs Iddon has changed her position (by buying a house) in the expectation of succeeding in her claim. On reflection, however, I am not persuaded that this could amount to substantial injustice in this particular case. The court may order the repayment of an interim payment: see CPR 25.8(2)(a); any claimant who receives an interim payment runs the risk that the court will exercise the power to order repayment. If the money is invested, for example, in a house, the claimant runs the risk that if the court orders repayment, he may lose the investment unless he has other means to repay. I conclude from this observation that a claimant who changes his position on receipt of an interim payment does not have a defence to an order to repay merely because he has changed his position. I remind myself that even if I were not to dismiss the claim, Mrs Iddon would have an award of less than she has already received by way of interim payments. It is likely that she would have to make a substantial repayment: thus, she may have to sell her house in any event. I do not believe that Mrs Iddon would suffer substantial injustice if I dismissed her claim if such a dismissal is likely to result in the court ordering her to repay the interim payment.                                                                         203. I  regard Mrs Iddon’s dishonesty in this case to be very grave. She lied repeatedly about her injuries, she continued to lie after she had been found out and, most seriously, she persuaded others to lie on her behalf. In my judgment, the culpability and extent of her dishonesty far outweighs any injustice to her in dismissing her claim; the dismissal of this claim seems to me to be exactly the evil to which Parliament directed its mind in enacting section 57. I do not believe that she would suffer substantial injustice if her claim were dismissed.

 

THE JUDGE’S CONCLUSION

 

104. Mrs Iddon suffered serious and distressing consequences because of the defendant’s breach of duty. Regrettably, she lied about how serious her condition was, and persuaded others to lie to support her account. I feel unable to rely on Mrs Iddon’s evidence; I have been forced to look to other sources of information. It may be that the evidence I feel able to rely on is incomplete so that some of the losses Mrs Iddon suffered have not been taken into account. If that is so, she only has herself to blame.
105. I conclude that Mrs Iddon has been fundamentally dishonest in relation to her claim. I am not persuaded that she would suffer substantial injustice if I were to dismiss her claim. I record that, but for the dismissal of her claim, I would have awarded Mrs Iddon £70,050.32. Unless the parties can agree an order, I will hear submissions on what orders I should make about costs and about repayment of the interim payments and the interim payment on account of costs.