TRIAL JUDGE’S FINDING OF FUNDAMENTAL DISHONESTY OVERTURNED: BECAUSE THE DISHONESTY WAS NOT “FUNDAMENTAL”

In  Denzil v Mohammed & Anor [2023] EWHC 2077 (KB) Mr Justice Freedman overturned a finding by a trial judge that a claimant had been fundamentally dishonest.  The finding that a minor head injury which was not part of the claimant’s pleaded case was fundamental dishonesty was not correct.    This issue was not “fundamental”. It did not affect the value of the claim, or the way the case had been presented.

 

Applying the language of Julian Knowles J in LOCOG to the instant case, the evidence of a 3-4 day head injury, not forming a part of the claim for PSLA, did not substantially affect the presentation of the case, either in respects of quantum or liability or both, in a way which potentially adversely affected the Defendant in a significant way.”

THE CASE

The claimant brought an action for damages for personal injury following a road traffic accident. At trial the judge found that there had been an accident. The claimant claimed special damages and also for injuries to his neck and back.   There was no pleaded case for head injury, nor was a head injury mentioned in the medical report. The CNF did not refer to a head injury.

During the evidence the claimant stated that he had suffered a head injury for a period of four days.

THE FUNDAMENTAL DISHONESTY FINDING AT TRIAL

The judge found in mentioning the head injury the claimant had been fundamentally dishonest.  The balance of the claim for personal injury was not found to be dishonest but was not proven.

THE CLAIMANT’S SUCCESSFUL APPEAL AGAINST THE FINDING OF FUNDAMENTAL DISHONESTY

The claimant appealed against the finding of fundamental dishonesty.

THE ISSUE ON APPEAL: WAS THE DISHONESTY “FUNDAMENTAL”?

On appeal Mr Justice Freedman carried out a detailed review of the authorities and principles relating to fundamental dishonesty

THE CLAIMANT’S SUBMISSIONS

 

    1. The Appellant submitted that there was no basis to find that (a) the dishonesty in this case went to the root of the case, or that (b) it has 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. In making that submission, the Appellant especially relied upon the following facts and matters, namely:

(i) the allegation about a head injury was not a part of the pleaded claim, nor was it added to the Particulars of Claim before or after the making of a witness statement;

(ii) in his witness statement, the Appellant did not in the recitation of his claim for PSLA specify the head injury. At paras. 73-74 and onwards, the Appellant referred to the neck and shoulder injuries. He did earlier refer to the swollen head, but the fact that it was omitted from the list of injuries shows how it did not form part of the claim and/or was not treated as substantial;

(iii) in his oral evidence, the Appellant did not invite the Judge to include the head injury to be including in his claim for PSLA;

(iv) in closing, counsel for the Appellant did not invite the Judge to include the head injury when assessing the quantum of damages.

  1. In the words of the Grounds of Appeal (at para. 25.1),”the Judge failed to identify whether the dishonesty was fundamental as defined by authority and it was wrong of him to dispatch the issue by saying that it was axiomatic.” That was a reference to para. 53 of the Judgment. The Judge did refer to the value of the head injury being nominal in para. 55, but stated (as quoted more fully above) that “that does not affect the fact that the dishonesty goes to the root of the claim because of the assertion of head injury in circumstances where no head injury was sustained”. The Appellant objects to this because it fails to engage beyond the dishonesty with why it was fundamental. It did not explain the conclusion, particularly by reference to the case law and the facts as a whole, of how an element which was not a part of the claim and so minor relative to the claim for personal injuries could go to the root of the claim. Without more, the Appellant’s submission was that there was nothing or not enough to discharge the burden of proving that any dishonesty was fundamental.

THE DECISION ON APPEAL

 

The claimant’s appeal was allowed.  The dishonesty that the judge found was not “fundamental”.

    1. The Court has had regard to the need to give great weight to the evaluative judgment of a judge’s conclusion on whether dishonesty was ‘fundamental’, and to recognise the advantages available to the Judge and not to this Court. The Judge alone saw the witnesses and especially the Appellant. He saw it in live time rather than through the selective parts chosen by the parties designed to make and answer criticisms through the respective spectacles of the parties. The Court has had well in mind the oft repeated strictures of the higher appellate courts in this regard including the oft cited case of Fage (UK) v Charbani [2014] EWCA Civ 4, at para. 114 where Lewison LJ stated:
“Appellate courts have been repeatedly warned, by recent cases at the highest level, not to interfere with findings of fact by trial judges, unless compelled to do so. This applies not only to findings of primary fact, but also to the evaluation of those facts and to inferences to be drawn from them.”
    1. I refer to the substantive law above as to what amounts to “fundamental” dishonesty for the purpose of section 57 of the 2015 Act. I observe from the authorities, namely:
(i) There is a danger about elaboration and metaphor. Otherwise, the Courts will be applying the elaboration and metaphors of previous judges such that the word of the statute will fade into history and will not be applied: see Elgamal at para. 70 per Jacobs J.
(ii) The statutory word “fundamental” should be given its plain meaning. The expressions “going to the root” or “going to the heart” of the claim are often sufficient to capture the meaning of the statutory word. Provided that it is understood in the same way, it might assist in some cases in respect of applying the word “fundamental” to consider whether the dishonesty “substantially affected the presentation of (the) case, either in respects of liability or quantum, in a way which potentially adversely affects the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation”: see LOCOG at paras 62-63.
(iii) The question whether the relevant dishonesty was sufficiently fundamental should be a straightforward jury question. As stated above, this judgment would return to this. “It is a question of fact and degree in each case as to whether the dishonesty went to the heart of the claim. That must involve considering the dishonesty relied upon, and the nature of the claim both on liability and quantum which was actually being advanced”: see Elgamal at para. 72 per Jacobs J.
(iv) It will often be appropriate in this holistic exercise to consider the extent to which the alleged dishonesty resulted in an inflated claim, that is the extent to which the dishonesty, if not exposed, would potentially have resulted in a higher quantum of recovery in respect of the claims made. This involves consideration of the various losses claimed by a claimant and assessing the potential impact of the alleged dishonesty on the award for those losses: see Elgamal at para. 73 per Jacobs J.

” In some cases, it will be obvious that the dishonesty had a potential impact on the amount that might be awarded for a particular head of loss. For example, a personal injury claim will invariably involve a claim for PSLA, and a dishonest description of symptoms and suffering will inevitably have a potential impact on the PSLA. The significance of that potential impact is a matter for consideration in the context of whether the dishonesty went to the root of the claim. Conversely, it may be clear that the alleged dishonesty has no material impact on a particular head of loss..”: see Elgamal per Jacobs J at para. 74.

    1. Applying the above law, the judgment is unsatisfactory in the following respects as regards the finding of fundamental dishonesty, namely:
(i) The finding that it was axiomatic that the dishonesty was fundamental is not reasoned.
(ii) Although the Judge rightly acceded to the request for reasons, para. 55 of the judgment does not provide any or any adequate reason for the finding: in particular, the references to the dishonesty going to the root of the claim is no more than an expression that the dishonesty was fundamental.
(iii) There is not explained how the dishonesty could be fundamental in circumstances where the head injury did not form a part of the pleaded case for PSLA. As submitted by Mr Deegan, there was not a head injury claim in any of the following:

(a) in the pleadings: the Particulars of Injury did refer to the neck and shoulder injuries, but did not to the head injury;

(b) in the CNF, there was reference to the neck and shoulder injuries, but not to the head injury;

(c) in the medical report of Dr Chishty, again there was reference to the neck and shoulder injuries, but not to the head injury;

(d) at trial, there was no attempt to claim for a head injury.

(iv) The judgment does not make reference to the fact that the head injury is not pleaded as part of the claim. The Judge refers to the submission that if the head injury had been suffered, the damages would have been nominal. The Judge appears to deal with that by finding that where the dishonesty is in respect of a small part of that which is claimed, such that the damages would be very small, that is not an answer to fundamental dishonesty. That does not deal with the instant point, namely that the damages would not even have been nominal for the back injury, because it was not a part of the injuries for which a claim has been made.
(v) At one point of the judgment, there is a reference to the claim in relation to the head injury. At para. 50, the Judge said the following:
“In my judgment Mr Denzil has been fundamentally dishonest in relation to the primary claim having regard to the matters that I identified a few moments ago in relation to the claim in relation to the head injury.” (underlining added)
    1. The term “claim in relation to the head injury” was imprecise, but it matters because of its context, namely a failure to deal with the important question as to how and why a head injury which does not form a part of the claim for personal injuries in this case can be treated as going to the root of the claim. Although it is an evaluative process in each case, there is no reasoning from which it is apparent that a reference to a 3-4 day swelling of the head in the written and oral evidence of the Appellant, which was not relied upon as a head of claim, could lead to a finding that the dishonesty was fundamental in relation to the claim.
    1. I have referred above to the part of the judgment of Jacobs J in Elgamal at para. 113 in which he referred to a person who claimed to have been injured but was dishonest about the entirety of the injury. That might render the claim as a whole fundamentally dishonest. That was not readily applicable to the instant case because in Elgamal, the reference was either to dishonesty about the entirety of the claim as pleaded or to dishonest exaggeration of the pleaded claim. In the instant case, there was no dishonesty found in respect of the entirety of the claim as pleaded because there was no finding that the neck and shoulder injuries were dishonest claims, simply that they had not been proven. There was dishonesty found in respect of the head injury, but this did not form a part of the claim for PSLA as pleaded.
    1. Absent specific reasons given by the Judge for the finding that the dishonesty was fundamental, the Respondent was left to speculate. The Respondent’s Notice, as quoted above, stated that (1) the head injury value was low but not trivial (Ground 1), and (2) it was a fraudulent device to bolster the case on other issues including whether the accident occurred and whether the Appellant sustained the neck and shoulder injuries (Ground 3). The Respondent submitted that the evidence was intended to lend authority to the case that there was a violent collision and to make the head and shoulder injury more plausible. In my judgment, this is to overstate the effect of the swelling to the back of the head. The alleged head injury was minor and very short-lived. It did not flow through to or affect the neck or shoulder injuries in a significant way or at all. It was minor and very short-lived both in itself and relative to the neck and shoulder injuries.
    1. Applying the language of Julian Knowles J in LOCOG to the instant case, the evidence of a 3-4 day head injury, not forming a part of the claim for PSLA, did not substantially affect the presentation of the case, either in respects of quantum or liability or both, in a way which potentially adversely affected the Defendant in a significant way.
    1. The Court has had in mind the purpose of the 2015 Act which the Judge must have had in mind and how dishonesty in personal injuries claims, in the words of Moses LJ quoted above prior to the 2015 Act, can “undermine a system whereby those who are injured as a result of someone else’s fault can receive just compensation.” At the same time, regard has to be had to the helpful citations in the case of LOCOG set out in paras. 24-26 above. These are reminders about the importance of giving effect to the language of section 57. It is not enough for a defendant to prove dishonesty. A defendant is also required to show that the dishonesty is fundamental in relation to the claim.
    1. Although it is an evaluative process in each case, there is no reasoning from which it is apparent that a reference to a 3-4 day swelling of the head in the written and oral evidence of the Claimant, which was not a part of the pleaded claim, could make the claim fundamentally dishonest. In my judgment, the combination of the fact that the head injury was not a part of the pleaded claim and the fact that it was minor and very short-lived (3-4 days of swelling) in the overall scale of things render the decision wrong. The references to the head injury in the witness statement and in the oral evidence which are not even a part of the pleaded claim do not go to the root of the claim nor do they substantially affect the presentation of the claim in a way which potentially adversely affected the defendant in a significant way.
    1. I have concluded that the decision was wrong. In my judgment, there is no scope to find that such a minor and very short-lived injury, not forming part of the pleaded claim, but referred to in written and oral evidence, could be properly characterised or understood as being fundamental or going to the root of the claim. I therefore find that the conclusion that the dishonesty was fundamental cannot stand.
    1. Nothing that I have said is intended to make light of the seriousness of making up a part of the evidence. Consideration can be given to visiting the same with consequences in the provisions relating to costs under the CPR to the extent the Court may have regard to the conduct of the parties which is broadly defined: see pt. 44.2 (4-5). It is a different matter whether the Respondent has made out that the Appellant “has been fundamentally dishonest in relation to the primary claim or a related claim” for the purpose of section 57 of the 2015 Act.
  1. For the reasons which I have given, the finding of fundamental dishonesty must be set aside. The appeal is therefore allowed. The claim will no longer be dismissed. I ask the parties to consider whether they can agree an order to reflect this judgment and to deal with such consequential matters as follow from the judgment.