PROVING THINGS 219: FAILING TO PROVE ALLEGATIONS OF FUNDAMENTAL DISHONESTY
In Mathewson v Crump & Anor  EWHC 3167 (QB) Dan Squires QC (sitting as a Deputy High Court Judge) did not accept the defendants’ submissions that the claimant had been fundamentally dishonest in pursuing a personal injury claim.
The claimant brought an action for damages after he was injured visiting premises when he fell through chipboard. The claim failed on the basis that the defendants were not “occupiers” of the premises, nor had they breached any duty of care. The defendants sought a finding that the claimant had been fundamentally dishonest.
THE JUDGMENT ON FUNDAMENTAL DISHONESTY
The judge did not accept the defendants’ arguments that the claimant had been fundamentally dishonest. Failing to mention that he had been to the premises before was not dishonesty, matters that arose afterwards were not relevant to the pursuit of the claim.
Criminal Justice and Courts Act 2015
“Personal injury claims: cases of fundamental dishonesty
(1) This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”)—
(a) the court finds that the claimant is entitled to damages in respect of the claim, but
(b) on an application by the defendant for the dismissal of the claim under this section, the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim.
(2) The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.”
i) Firstly, I have not found the Claimant to be “entitled to damages” for the purpose of section 57(1)(a). Section 57 does not therefore apply.
ii) Secondly, the Defendants’ pleaded case on dishonesty does no more than “reserve the right to plead” that the claim with regard to “severity of … injuries, the level and degree of … pain and suffering and loss of amenity, together with the amount of his pecuniary losses, are fraudulently untrue”. The pleadings were not amended to make an assertion of fraud, and, in any event, the case before me proceeded only on the question of liability. I made no finding in relation to the quantum sought, whether on the dishonesty of the claim or otherwise.
CPR rule 44
Ordinarily in personal injury claims, claimants enjoy “qualified one-way cost shifting” (“QOCS”) which limits the claiming of costs against them (see CPR rule 44.14). If, however, a claimant’s claim were to be found to be “fundamentally dishonest” a costs order could be enforced against them with the permission of the court pursuant to CPR rule 44.16(1). As the Court of Appeal held in Howlett v Davies  EWCA Civ 1969,  1 WLR 948, it is not necessary for a defendant to formally plead “fundamental dishonesty” in response to a claim for it to be open to the Court to make such a finding, provided that the claimant had adequate warning of the potential conclusion of fundamental dishonesty and a fair opportunity to deal with it (see in particular Howlett v Davies paragraphs 30-33). In the present case, the issue of “fundamental dishonesty” was raised in the Defendants’ skeleton and it was put to the Claimant during the hearing that parts of his evidence was untrue. In my view, the question of “fundamental dishonesty” for the purpose of CPR 44.16 is therefore properly before the court and the Claimant had a fair opportunity to deal with it.
“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.”
In London Organising Committee of the Olympic and Paralympic Games v Sinfield  EWHC 51 (QB) at paragraphs 57-59, Julian Knowles J referred to a number of County Court cases that had considered CPR r 44.16(1) and the meaning of “fundamental dishonesty”.
“approach to lies told by a party to litigation. If a lie is told merely to bolster an honest claim or defence, then that will not necessarily tell against the liar. But if the lie goes to the whole root of the claim or defence, then it may well indicate that the claim or defence (as the case may be) is itself fundamentally dishonest.”
“Fundamental dishonesty within the meaning of CPR 44 means a substantial and material dishonesty going to the heart of the claim – either liability or quantum or both – rather than peripheral exaggerations or embroidery, and it will be a question of fact and degree in each case …”
“The use of the word ‘dishonesty’ in the present context necessarily imports well understood and ordinary concepts of deceit, falsity and deception. In essence, it is the advancing of a claim without an honest and genuine belief in its truth. [F]or present purposes, fundamental dishonesty may be taken to be some deceit that goes to the root of the claim. The purpose of the phrase is twofold: first, to distinguish any dishonesty from the exaggerations, concealments and the like that accompany personal injury claims from time to time. Such exaggerations, concealment and so forth may be dishonest, but they cannot sensibly be said to be fundamentally dishonest; they do not go to the root of the claim. Second, the fundamental dishonesty is related to the claim not to the claimant. This must be deliberate on the part of those who drafted the Civil Procedure Rules. It is the claim the defendant has been obliged to meet, and if that claim has been tainted by fundamental dishonesty, then in fairness, and in justice and in accordance with the overriding objective, the defendant should be able to recover the costs incurred in meeting an action that was proved, on balance, to be fundamentally dishonest.”
In order to establish that the Claimant has pursued a “fundamentally dishonest” claim, it must be shown there was dishonesty which goes to the root or heart of the claim, or to a part of it. Dishonesty which is merely incidental or collateral to the claim will not suffice. Dishonesty for these purposes is subjective. It does not matter if the Claimant was unreasonable in believing in the veracity of his claim. Provided he genuinely believed in the veracity of all the core aspects of his claim, it will not be fundamentally dishonest. In essence a claim will be dishonest if the person putting it forward does not believe that some core aspect of it (whether concerned with liability or quantum) is true.
Application to present case
The Defendants did not suggest that the Claimant’s account of the accident and the events immediately surrounding it was fundamentally dishonest. They put their case on “fundamental dishonesty” in three ways. It was submitted, orally and in writing, that the Claimant was dishonest (i) in relation to his prior knowledge of the property; (ii) his conduct shortly after the accident, and (iii) the claimed extent of the Claimant’s claimed losses.
i) As to the Claimant’s prior knowledge of the property, it was pointed out by Ms Richmond that in his witness statement the Claimant failed to mention that before the accident he had been to 16 Fallowfield Close twice previously, including the week before. It was not, however, put to him in cross-examination that that omission was dishonest. When asked about the previous times he had visited the property, he readily accepted he had visited and did not appear to have any intention to conceal the visits. Furthermore, and to be fair to the Claimant, the entire section of his witness statement dealing with liability, including the accident itself, was two pages long. The omission of details of his earlier visits to the property are more likely, in my view, to be the result of brevity of the statement than any deliberate attempt at concealment.
ii) The events immediately after the accident on which Ms Richmond relies was the message sent to MC by the Claimant on 14 January 2016 suggesting he make, what was said to be, a fraudulent claim on CK2’s insurance and his contact with MC about the quotation for the plastering. As set out above, I did not find it credible that the Claimant had no memory of sending the text on 14 January 2016, or that, in the texts following the accident, he was suggesting that two other individuals (not including himself) would do the plastering work. Those are not, however, matters that go to the root or core of the claim. As set out above, I do not consider that a suggestion that CK2 make a claim on its insurance is itself indicative of fraud. There is a good argument that CK2 was, in fact, that correct defendant in this claim and there is no basis for me to conclude that any suggestion of a claim against CK2 was necessary fraudulent. In any event, while it might have been improper in the text of the Claimant to seek to persuade MC to make the claim on the basis that he would “divy [it] up”, it is hard to see how that is dishonesty going to the core of the claim which is that the Claimant was injured as a result of a breach of duty by the First or Second Defendant.
iii) As to matters concerning the Claimant’s losses, Ms Richmond, accepted she could not pursue that as an allegation of dishonesty as the trial did not determine any issues related to quantum or the Claimant’s claimed losses.
In my view the Claimant genuinely believed he had a proper claim against the Defendants. That, of course, is not necessarily sufficient. A person may genuinely believe they are entitled to compensation, but nevertheless put forward a case which at its core is not honest. That has not, however, occurred in the present case. The core aspects of this case on liability are the claims that one or both of the Defendants were the “occupiers” of 16 Fallowfield Close, and that they failed to take reasonable care to ensure the Claimant was safe when he visited on 11 January 2016. I did not find either aspects of the case to be established, but I do not doubt that the Claimant genuinely believed both those aspects of his claim. Insofar as there were other aspects of the case in which I did not accept of the Claimant’s evidence, I do not consider those go to the core or heart of the case and do not consider it to be a fundamentally dishonest claim.