Kerry Underwood

FUNDAMENTAL DISHONESTY, STRIKING OUT AND HUMAN RIGHTS ACT

with 5 comments


FUNDAMENTAL DISHONESTY, STRIKING OUT AND HUMAN RIGHTS ACT

In Fairclough Homes Ltd v Summers [2012] UKSC 26

the Supreme Court held that a court had the power to strike out a claim in its entirety in the event of fraud, but that that power should only be exercised in very exceptional circumstances. It has rarely been used.

Under the principles of this case a claimant would generally receive the genuine element of a claim even if a court found that s/he had dishonestly claimed other losses. This case is in a sense a forerunner of Section 57 of the Criminal Justice and Courts Act 2015. Here the Supreme Court said, at paragraph 1:-

“The principal issues in this appeal are whether a civil court (“the court”) has power to strike out a statement of case as an abuse of process after a trial at which the court has held that the defendant is liable in damages to the claimant in an ascertained sum and, if so, in what circumstances such a power should be exercised.”
There was no doubt that the claimant had had an accident which was the defendant’s fault but the trial judge found that he had exaggerated his symptoms to the extent of being fraudulent and had deliberately lied to those preparing medical reports.

At paragraph 33 of its judgment the Supreme Court said:-

“33. We have reached the conclusion that, notwithstanding the decision and clear reasoning of the Court of Appeal in Ul-Haq, the court does have jurisdiction to strike out a statement of case under CPR 3.4(2) for abuse of process even after the trial of an action in circumstances where the court has been able to make a proper assessment of both liability and quantum. However, we further conclude, for many of the reasons given by the Court of Appeal, that, as a matter of principle, it should only do so in very exceptional circumstances.”

Interestingly at paragraph 45 the Supreme Court said:-

“It was submitted that an ascertained claim for damages could only be removed by Parliament and not by the courts. We are unable to accept that submission. It is for the court, not for Parliament, to protect the court’s process. The power to strike out is not a power to punish but to protect the court’s process.”

Parliament has clearly taken a different view from the Supreme Court in passing Section 57.

Most interestingly of all the Supreme Court considered the role of the European Convention on Human Rights in the context. Specifically the Supreme Court accepted that a judgment is a possession within the meaning of Article 1 Protocol 1 of the European Convention on Human Rights and that the effect of striking out a claim for damages would be to deprive someone of that possession, which would only be permissible if “in the public interest and subject to the conditions provided for by law…”

The Supreme Court said that the State has a wide margin of appreciation in deciding what is in the public interest but that is subject to the principle of proportionality – Pressos Compania Naviera SA v Belgium (1995) 21 EHRR 301 Paras 31 to 39.

“48. It is in the public interest that there should be a power to strike out a statement of case for abuse of process, both under the inherent jurisdiction of the court and under the CPR, but the Court accepts the submission that in deciding whether or not to exercise the power the court must examine the circumstances of the case scrupulously in order to ensure that to strike out the claim is a proportionate means of achieving the aim of controlling the process of the court and deciding cases justly.”

The court then went on to say, at paragraph 49:-

“The draconian step of striking a claim out is always a last resort, a fortiori where to do so would deprive the claimant of a substantive right to which the court had held that he was entitled after a fair trial. It is very difficult indeed to think of circumstances in which such a conclusion would be proportionate. Such circumstances might, however, include a case where there had been a massive attempt to deceive the court but the award of damages would be very small.” (My italics)

Section 57 very obviously raises a major Human Rights Act issue. This case may give some indication as to how the Supreme Court will treat that issue.

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Written by kerryunderwood

July 10, 2015 at 8:58 am

Posted in Uncategorized

5 Responses

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  1. The HRA will probably be repealed by the time such a case reached the Supreme Court in any event, but interesting nonetheless.

    David shaw

    July 10, 2015 at 9:07 am

    • David

      I do not believe that there is a majority in either House of Parliament to repeal the Human Rights Act.

      Kerry

      kerryunderwood

      July 10, 2015 at 10:01 am

  2. […] Kerry Underwood  writes on Fundamental Dishonesty, Striking out and Human Rights Act […]

  3. The obvious difficulty is that an issue of fraud is one which by definition is unsuitable for summary judgement and certainly not one amenable to disposal under CPR 3 or similar provisions. Kerry I suggested this might not survive unscathed in a previous comment and you were quite scathing in your response !!!! Solicitors always respond very defensively to allegations of fraud lest they are tainted themselves. They are not going to allow them to be tried summarily in view of all the possible consequences. The words “fair trial” spring immediately to mind.

    Root

    July 10, 2015 at 12:30 pm

  4. […] whilst “fundamental dishonesty” is not defined, it is being used to scare of many claimants. Last week a colleague reported that a […]


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