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Fundamental Dishonesty and Costs Consequences of the Same

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What is Fundamental Dishonesty?

Fundamental dishonesty is a phrase that was coined in April 2013, subsequent to modifications of the CPR. It is a term that is used when a Claimant is seen to be exaggerating, telling lies or hiding truths that would be relevant to a claim. If a Claimant has been fundamentally dishonest beyond reasonable doubt, then the Court can dismiss a claim and devise an order for costs, which can be enforced against the Claimant, unless the Claimant would suffer “substantial injustice” as a result.

However, for a claim to be classified as fundamentally dishonest, the Court needs to be satisfied that the Claimant’s dishonesty went to the root of either the whole claim or to a significant part of it. Therefore, it is not a decision that is taken lightly. 

Fundamental Dishonesty and Costs Consequences

In April 2013, Qualified One-Way Costs Shifting was introduced for personal injury claims. This QOCS protection means that Defendants are now ordered to pay the costs of the successful Claimants. It also means that Defendants cannot recover their own costs, even if they are successful in defending a claim.

However, it is stated that a Claimant is able to lose the protection of the Qualified One-Way Costs Shifting (QOCS) if their claim is struck out for not providing reasonable grounds for bringing proceedings, if they are found to be fundamentally dishonest or if the Claimant fails to beat a Defendant’s Part 36 Offer.

Furthermore, fundamental dishonesty is referred to in Section 57 of the Criminal Justice and Court Act 2015 as the regulations within this document allow for an entire personal injury claim to be dismissed. This includes any genuine aspects of the claim on the grounds that the Claimant has been fundamentally dishonest in regards to the primary claim or a related claim.

Fundamental Dishonesty: Case Law

Throughout the years, case law has developed, and examples of judicial rulings in relation to fundamental dishonesty are now readily available. Within Pegg v Webb & Anor [2020] EWHC 2095, an appeal on an original judicial decision took place, and the Claimant was found to be fundamentally dishonest.

The personal injury claim itself arose from a road traffic accident in which the Claimant and the Defendant were involved in a collision, with the Defendant accepting liability for it. Moreover, the Claimant proposed a claim for the injuries and losses caused as a result of the accident. When the trial commenced, the Claimant relied on evidence provided by a medical expert, which stated that the longevity of the Claimant’s injuries was six months post-accident. However, the Claimant failed to mention that some weeks after the original incident, they were involved in a quad bike accident, which led him to attend the Accident & Emergency department. This information was not disclosed to the medical expert.

The Defendant insurer insisted that this was a deceptive claim based on an accident that did not occur, or if it did occur, was concocted by the parties. In addition, the Defendant insurer accused the Claimant of exaggerating their injuries and misleading the medical expert. The original Judge on this matter ruled that the case should be dismissed as there was a failure to disclose all of the relevant information, and there were inconsistencies in the evidence regarding the longevity of the injuries.

Also, the Judge deemed that the Claimant was aware that they should have alerted the medical expert of their quad bike accident but did not do so. However, the Judge ruled that there was no finding of fundamental dishonesty. This result was not deemed satisfactory; therefore, an appeal took place. The appeal Judge believed that the fact that the Claimant did not provide the relevant information was sufficient grounds to rule fundamental dishonesty. As a result of this Court of Appeal ruling, the Claimant was ordered to pay 70% of the Defendant insurer’s costs.

In addition to this matter, the ruling in the recent County Court appeal of Tess Garraway v Holland & Barrett Ltd (2020) found the Claimant to be fundamentally dishonest within their account of the incident in question. This was a personal injury claim in which the Claimant stated that they had been injured by the closing shutter within the shop. The documentary evidence and the expert’s findings did not support the Claimant’s narration of the incident. Due to these discrepancies, it was concluded that the Claimant was fundamentally dishonest.

Finally, the case of Howlett v Davies [2017] EWCA Civ 1696 highlights how the Court of Appeal examine the honesty of the Claimants. Within this particular road traffic accident case, the Claimant was found to have been dishonest in his cross-examination and opening remarks. Therefore, the costs were ordered to be paid by the Claimant as an exception to QOCS.

Although these examples highlight cases where the Claimant was found to be dishonest, there are many instances in which this does not happen. If the Claimant comes across as credible and gives an honest witness statement, it is unlikely that the Court will make a finding of fundamental dishonesty, even if the claim is unsuccessful. 

Furthermore, it is not just personal injury claims that the term “fundamental dishonesty” can be utilised in, as it has now been adopted by the Section 57 Criminal Justice and Courts Act. 

How Can ARC Costs Assist?

If a claim is found to be fundamentally dishonest, costs can be claimed in full on a standard basis against the Claimant, and overrides QOCS under CPR 44.16.  Claimants can therefore ultimately fall to be liable for significant costs.

At ARC Costs, our experienced experts are able to provide assistance in all costs matters for fundamental dishonesty case, irrespective of whether you represent the paying or receiving party. Our skilled Costs Draftsmen and Costs Lawyers are able to prepare a comprehensive Bill of Costs, which can be served on parties who have been found to be fundamentally dishonest and are liable for the costs within the matter. Within the Bill of Costs, the work completed is detailed item-by-item; therefore, the team require access to files and time records in order to prepare the document accurately. Once the Bill of Costs has been produced, the paying party are able to scrutinise the entries and figures. For that reason, it is vital that an experienced Draftsman prepares the Bill of Costs, ensuring that only recoverable items are included, defending it effectively during negotiations and ultimately maximising the recovery on the Bill. 

Alternatively, we are able to negotiate and dispute a bill that a party has received if they have been found to be fundamentally dishonest, and preparing Points of Dispute to outline legal arguments in support. The Costs Lawyer and negotiating team, who hold over twenty years of experience, are able to employ their extensive legal and technical knowledge to provide trustworthy advice for various types of claims such as; personal injury, judicial review and commercial disputes. When delivering advice, we operate a five working day SLA turnaround. This ensures that guidance is provided promptly and that the conduct of the case runs smoothly. Every member of the teams holds the success of the matter in the highest importance, thus guaranteeing excellent results.

For further information or to discuss your query, call one of the team or 01204 397302, or email one of our experts at info@arccosts.co.uk. Alternatively, you can contact us via submission of our contact form, and one of the team will give you a call back to provide free initial advice.

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