PROVING THINGS 220: ANOTHER CASE WHERE FUNDAMENTAL DISHONESTY NOT ESTABLISHED

December 7, 2021 · by gexall · in Civil evidence, Fundamental Dishonesty, Personal Injury

In Long v Elegant Resorts Ltd [2021] EWHC 1330 (QB) HHJ Pearce, sitting as a judge of the High Court, did not accept the defendant’s contention that the claimant had been fundamentally dishonest. The defendant was relying on a factor that had been known to all and clear throughout (that the claimant had been made redundant). There are some important observations on the range of cross-examination a party may be allowed in the course of the trial, particularly relating to peripheral matters or issues that have not been pleaded.

“In my judgment, the court must be careful about drawing conclusions adverse to the honesty of a Claimant from evidence about peripheral issues, most particularly where the Defendant has not given adequate advanced warning of its intention to raise the particular issue. Indeed, having regard to the passage from Howlett v Davies referred to above, the court would doubtless consider preventing cross-examination in such circumstances, on the ground that fairly reaching a conclusion adverse to the Claimant and that therefore the cross-examination was inappropriate.”

THE CASE

The claimant brought a claim for damages for personal injury following a blow to the head whilst working in a cellar, it was said this had some psychological impact. The defendant alleged that the claimant had been fundamentally dishonest in failing to mention that, prior to the accident, he was aware that he was going to be made redundant and that this fact could have had a major effect on his mental health.

THE JUDGE’S DISCUSSION OF THE PRINCIPLES RELATING TO FUNDAMENTAL DISHONESTY

Fundamental Dishonesty

70. Insofar as relevant, section 57 of the Criminal Justice and Courts Act 2015 (“CJCA 2015”) provides as follows:

“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.

(3) The duty under subsection (2) includes the dismissal of any element of the primary claim in respect of which the Claimant has not been dishonest.

(4) The court’s order dismissing the claim must record the amount of damages that the court would have awarded to the Claimant in respect of the primary claim but for the dismissal of the claim.

(5) When assessing costs in the proceedings, a court which dismisses a claim under this section must deduct the amount recorded in accordance with subsection (4) from the amount which it would otherwise order the Claimant to pay in respect of costs incurred by the Defendant…”

71. In considering whether an allegation of dishonesty is made out, the court must bear in mind the following:

i) The test for dishonesty is that set out in paragraph 74 of the judgment of Lord Hughes in Ivey v Genting [2016] UKSC 67:

“When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the Defendant must appreciate that what he has done is, by those standards, dishonest.”

ii) The burden of proving that a witness has been dishonest, a proposition which is not self-evident, lies upon the party alleging it (see Robins v National Trust [1927] AC 515);

iii) The standard for proving dishonesty in a civil case is the balance of probabilities (Secretary of State for the Home Department v Rehman [2001] UKHL 47, applying Re H [1996] AC 563);

iv) However, an allegation of dishonesty is a serious allegation that will require appropriately cogent evidence to persuade the court (Re H op. cit.).

72. As to whether any dishonest conduct should be found to be “fundamental”, Julian Knowles J in London Organising Committee of the Olympic and Paralympic Games v Sinfield [2018] EWHC 51 at paragraph 61 conveniently sets out the law. Having reviewed the authorities, he stated:

“In my judgment, a Claimant should be found to be fundamentally dishonest within the meaning of section 57(1)(b) if the Defendant proves on a balance of probabilities that the Claimant has acted dishonestly in relation to the primary claim and/or a related claim … and that he has thus substantially affected the presentation of his case, either in respects of liability or quantum, in a way which potentially adversely affected the Defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation.”

73. In its defence, the Defendant reserved its position as to what injuries the Claimant had suffered as a result of the accident. By the time of the service of the Counter Schedule dated 18 September 2020, the Defendant’s position had hardened to the following:

i) It was denied that the Claimant had suffered any injury (or at least any injury of significance) in the accident;

ii) Insofar as an alternative explanation for any symptoms suffered by the Claimant was to be advanced, they were probably a continuing manifestation of a pre-existing condition, triggered by redundancy rather than the accident;

iii) The Defendant proposed to explore the Claimant’s genuineness at trial;

iv) The Claimant had falsely represented to that his redundancy in April 2015 was or may have been accident related and that, absent the accident, the redundancy would not have caused him stress in any event.

74. In the Defendant’s written skeleton argument, served for the purpose of trial, the Defendant added to this:

i) That the Claimant was “a demonstrably unreliable historian” in respect of issues other than merely the circumstances of his redundancy;

ii) That the Claimant appeared to be a man who exaggerates and therefore his evidence must be treated with the utmost caution.

75. During the trial, counsel for the Claimant at various points objected to lines of questioning by counsel for the Defendant on the ground that they went to issues of dishonesty that had not been pleaded. In this regard, I bear in mind the judgment of Newey LJ in Howlett v Davies [2017] EWCA Civ 1696. At paragraph 31 of his judgment, he said:

“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 [2006] 2 All ER 303, 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.”

76. During closing submissions, counsel for the Claimant made the valid point that the demands of ensuring that costs are proportionate means that a Claimant cannot be expected to incur cost in exploring factual issues in advance of a trial which are apparently peripheral, merely in order to cover the risk that, at trial, the Defendant will cross-examine on those issues and seek to establish inconsistencies in the evidence which are then said to be evidence of dishonesty.

77. In my judgment, the court must be careful about drawing conclusions adverse to the honesty of a Claimant from evidence about peripheral issues, most particularly where the Defendant has not given adequate advanced warning of its intention to raise the particular issue. Indeed, having regard to the passage from Howlett v Davies referred to above, the court would doubtless consider preventing cross-examination in such circumstances, on the ground that fairly reaching a conclusion adverse to the Claimant and that therefore the cross-examination was inappropriate. This was the approach taken by HHJ Coe QC in paragraph 14 of her judgment in Pinkus v Direct Line [2018] EWHC 1671 (QB) and it is one with which I agree. I would have been minded to apply the same principle to cross-examination on peripheral matters which a Claimant has understandably declined to investigate, having regard to the need to conduct litigation at proportionate cost.

78. In this case, the Defendant has adequately given notice of its intention to explore the circumstances of the Claimant’s redundancy. Ironically, the lack of investigation of this point has been arguably more on the Defendant side that it has been on the Claimant’s (at least insofar as evidence placed before the court is concerned), a point of some significance on this issue, as identified below. However, I see no unfairness in the Defendant having been allowed to explore the issue and thereafter seeking to draw an inference of dishonesty from the evidence, given that this is a central issue in the case. Further, insofar as the court has been concerned with the genuineness of the Claimant’s symptoms, his reliability as a historian has been an issue throughout the case. The alleged tendency to exaggerate has arisen more recently and in any event, as will be considered further, has been suggested at times to be a consequence of a somatic symptom disorder, rather than deliberate exaggeration. however, again, the accuracy of the Claimant’s reporting is inevitably a central issue in this case. I am satisfied that, with the appropriate approach to the application of the burden of proof, as set out above, no injustice is done to the Claimant through the failure to raise this point more clearly or at an earlier point in time.

79. I should add that I have had regard to the judgment of Master Davison in Mustard v Flower [2021] EWHC 846 which was heard and decided after I heard the trial in this case and therefore was not referred to in submissions. I would agree with his analysis of the law, which is close to mine as set out above.

THE JUDGE’S FINDING THAT THERE WAS NO FUNDAMENTAL DISHONESTY IN THIS CASE

The judge found that the claimant had not been dishonest.

Issue 6 – Has the Claimant given an honest account of the circumstances leading to his redundancy, whether he believes that he would have been made redundant in any event and/or what his response to the redundancy would have been absent the accident?

214. I have set out under issue 3 above my reasons and conclusion that the tone of the document does not accurately reflect the Claimant’s thinking as of 10 March 2015. I accept, for reasons given earlier, that the Claimant did not see his redundancy as an inevitability at the time of the accident.

215. It does not automatically follow from the finding on Issue 3 that the Claimant has not been guilty of dishonesty of this issue. It would be dishonest by the standards of ordinary people to give a deliberately misleading account of the circumstances of the redundancy even if the motivation in doing that were to bolster the Claimant’s true belief that the redundancy was not inevitable and/or that the Claimant’s ill health was not related to the redundancy.

216. But there are several puzzling features relating to the Claimant’s redundancy. Whilst in part these flow from an apparent inconsistency in his account of the circumstances (which for understandable reasons plays a significant part in this case), there are other features which suggest that the court does not have a full picture before it.

217. The starting point is that the Claimant had only relatively recently been taken on by the Defendant as its head of IT. Whilst Mr Dignum on behalf of the Defendant sought to draw attention to some weaknesses in the probationary reviews that had taken place, the Defendant had nevertheless felt able to offer the Defendant a permanent post shortly before the accident. Further, when the question of the redundancy arose, Ms Helen Smith said in an email to the Claimant, “your performance isn’t in question.”

218. However, the Claimant was made redundant some months before any potential successor was employed. Mr Jones (who cannot be expected to have detailed knowledge of such matters) accepted that Mr Long was made redundant in April 2015 but that his replacement did not come in until “later that year.” Mr Long’s own case (see paragraph 9 of his fifth witness statement) is that the new head of IT was appointed in August 2015. The Defendant has not sought to contradict that, even doubtless it would have available the evidence necessary to do so. Based on this evidence, I conclude that the new head of IT, who was in effect the Claimant’s replacement, albeit that the job may have been at a higher level, was not appointed until about four months after the Claimant was made redundant. This is strongly suggestive that the Claimant’s redundancy was accelerated, so as to take effect earlier than the true point of redundancy.

219. The Claimant’s account of the circumstances of his redundancy closest in time to the accident, is contained in the May 2015 Document. It is the Claimant’s case that the document was drafted together with the assistance of employment lawyers. It sets out essentially four grounds of appeal:

i) That the Defendant had failed to follow a fair process;

ii) That the terms of the Claimant’s redundancy were not clear;

iii) That the Defendant failed to make reasonable adjustments for the Claimant’s disability; and

iv) That the Claimant had been bullied by Mr Redmond Walsh.

220. It must also be borne in mind that the Claimant’s account in the May 2015 Document was available for the medical experts and the Defendant’s legal advisors to see. The very fact that it has only played a major role in this case at a very late stage notwithstanding that it has been referred to in disclosed documents throughout the litigation might suggest that it the document does not bear the significance that the Defendant contends for. But it does not necessarily follow from this that the Claimant was not trying to mislead people on this issue. For example his assertions about his redundancy to Dr Bourke which were taken as an indication that no possibility of redundancy had arisen before the accident might have been made by the Claimant in the context of his either having forgotten about the May 2015 Document or in the belief that the document would not come to light.

221. On balance however I am not persuaded that the Claimant’s failure to refer to the risk of redundancy, whether to Dr Bourke or more generally in this ligation was a deliberate attempt to deceive. I say this for the following reasons:

i) I repeat that a finding of a deliberate attempt to deceive would require cogent evidence.

ii) Other aspects of the Claimant’s evidence, upon which I have commented, suggest that he is not someone prone to lying when the circumstances suit;

iii) For reasons set out under issue 3, I conclude that the extreme reaction to the risk of redundancy only arose in May 2015. It follows that the Claimant would not naturally associate his deterioration in health which had already occurred started by then with the redundancy;

iv) It would be understandable if the detailed sequence of events in respect of the redundancy have not been in the forefront of the Claimant’s mind during the litigation process, in particular if he does not attribute any health consequences to the redundancy.

222. In my judgment, it is more probable that the Claimant’s failure to refer to the redundancy as a possible cause of his ill health or, in the case of his consultation with Dr Bourke, even to acknowledge the risk of redundancy at all prior to the accident, is more probably a consequence of an unswerving conviction that it was the accident rather than the redundancy that has caused his various symptoms coupled with the failure to recall the detail of a redundancy process which in his mind was of no relevance to the issues in the litigation.

Issue 7 – Has the Claimant has been guilty of Fundamental Dishonesty within the meaning of Section 57 of CJCA 2015?

223. It follows from my conclusions under issue 6 that there is no finding of dishonesty here which could be described as “fundamental” and so issue 7 is resolved easily in favour of the Claimant.

Tags: Civil evidence, Fundamental Dishonesty, Personal Injury