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What is Fundamental Dishonesty in a personal injury claim?

Following the case of London Organising Committee of the Olympic and Paralympic Games (in liquidation) v Haydn Sinfield [2018] EWHC 51 (QB), the High Court has recently provided the clearest guidance yet on fundamental dishonesty in dismissing a claim where a claimant wrongly claimed special damages in an otherwise honest claim.

The case involved a volunteer who, whilst working at the 2012 London Olympics, suffered an injury to his left arm and subsequently brought a personal injury claim. However, he was later found to have exaggerated the costs of gardening assistance following the accident and his entire claim was dismissed.

The definition of fundamental dishonesty

There is no specific definition of fundamental dishonesty and it has been left to the courts to decipher its meaning themselves.

S.57 of the Criminal Justice and Courts Act 2015 places a duty on the court in respect of personal injury claims and states if a claimant is proved to have been fundamentally dishonest, then the court must dismiss the whole claim unless to do so would cause substantial injustice.

Why did this case constitute fundamental dishonesty?

In this case liability was admitted by the defendant and Mr Sinfield served a Schedule of Special Damages which was verified by a statement of truth and signed by himself. He claimed that due to the injuries sustained he could no longer look after his two-acre garden and was required to employ a gardener. The claim included gardening fees already incurred as well as future gardening services and he provided invoices from his gardener. This element of his claim was for approximately £14,000 which equated to 28% of his total claim.

The defendant proceeded to obtain witness evidence from the claimant’s gardener and in doing so discovered that the gardener had been employed by the claimant prior to the accident, his workload had not changed after the accident and he did not produce the disclosed invoices. The defendant successfully applied to amend its defence to plead fundamental dishonesty under s.57 Criminal Justice and Courts Act 2015.

The claimant responded stating that his first statement was worded badly and that he previously employed a gardener out of choice but now it was a necessity. He admitted creating the invoices and reduced the claim to approximately £1,650.

Did the Court find this to be Fundamentally Dishonest?

Whilst at first instance, Mr Recorder Widdup of Oxford County Court ruled that the claimant had acted dishonestly in creating the false invoices and in his first statement. However, he found that the dishonesty did not contaminate the entire claim and was peripheral to the main claim. He found that it would be substantially unjust for the entire claim to be dismissed when the dishonesty related a peripheral part of the claim and the rest of the claim was genuine. He awarded the claimant damages of approximately £27,000.

What happened after this was appealed?

The defendant appealed this decision and Mr Justice Julian Knowles overturned the previous decision and dismissed the entire claim. In doing so he stated that a claimant should be found to be fundamentally dishonest if it is proved that he has acted dishonestly and he has substantially affected the presentation of his case with respect to either liability or quantum in a way which adversely affects the defendant in a significant way.

He found that the claimant knowingly made dishonest representations regarding the gardening expenses which would have resulted in the defendant’s insurers paying out for more damages than, on honest evidence, they would have been ordered to pay. He found that the fact that the greater part of the claim was honest was “neither here nor there” when the court finds fundamental dishonesty.

He held that there was no evidence to support a finding of substantial injustice and simply losing the right to compensation was not sufficient and the entire claim was dismissed accordingly.

What are the consequences of being found fundamentally dishonest?

The implications of being found fundamentally dishonest should not be underestimated.

Civil Procedure Rules (CPR) 44.16(1) state that:

““Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest.”

This means that not only is there a risk of the whole claim being dismissed under section 57 Criminal Justice and Courts Act 2015 but a claimant could lose the protection of QOCS (Qualified One-Way Costs Shifting). QOCS protects a claimant as they are not required to pay the defendant’s legal costs whether they win or lose their personal injury claim. However, following a finding of fundamental dishonesty, this protection can be removed and leave a claimant being held liable for paying the defendant’s costs which is likely to be thousands of pounds!

A claimant should also note that if their claim is being funded by way of a CFA (Conditional Fee Agreement) which is commonly known as a No Win No Fee Agreement, then a finding of fundamental dishonesty may render them in breach of that agreement that they may be liable for their own solicitor’s costs.
Further to this, by knowingly misleading the court it could potentially lead to proceedings for contempt of court and criminal investigations.

Honesty is the best policy when bringing a personal injury claim

When bringing a personal injury claim a claimant will be required to sign a statement of truth which requires the wording ‘I believe that the fact stated in this document are true’ and the consequences of signing this dishonestly can be severe and should not be taken lightly.

Honest claimants have nothing to fear and you should not be put off from bringing a legitimate claim. Nevertheless, cases such as the one above demonstrate that the courts are taking a much more robust approach in this area and dishonest claimants will be held to account over their actions.