QUALIFIED ONE-WAY COSTS SHIFTING: DISCONTINUANCE
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In Rouse v Aviva Insurance Ltd, Unreported, 15 January 2016, Bradford County Court
His Honour Judge Gosnell found that where a claimant discontinues and the defendant seeks a finding of fundamental dishonesty under CPR 44.16 so as to dis-apply Qualified One-Way Costs Shifting, the relevant procedure is in the discretion of the court.
The claimant Rouse sued for personal injury arising out of an alleged car accident and the defendant insurance company was suspicious and investigated fully and a few days before trial Rouse discontinued and the insurance company sought a finding of fundamental dishonesty under CPR 44.16.
The District Judge had held that the claimant did not need to explain the discontinuance and nor was the court obliged to draw an adverse conclusion from the failure to explain discontinuance and that any CPR 44.16 issue had to be determined on the papers irrespective of the timing of discontinuance and in spite of the guidance given by HH Judge Maloney in Gosling v Hailo and Another, Unreported, 29 April 2014, Cambridge County Court.
Aviva Insurance appealed. On appeal the judge held that under Practice Direction 44.12.4(c) the court did indeed have a discretion to direct a paper determination or limited enquiry or full trial as per the guidance in Gosling.
The judge also said:-
- Where there was a prima facie case of dishonesty on the paperwork, it was only fair to the claimant and to the court to allow the claimant to explain why he had made a claim and then discontinued it. Where the claimant failed to give evidence or failed to explain the discontinuance, then the defendant could invite the court to draw an adverse influence from that conduct.
- A hearing may be proportionate where, for example, the case was virtually ready for trial and evidence had been exchanged. If discontinuance occurred just after service of the defence then that weighed strongly against incurring substantial further costs.
On the facts of this matter, where discontinuance took place just before trial, it was right and fair to have either a full trial or a limited enquiry giving the claimant and his witness the opportunity to give evidence.