Kerry Underwood

FUNDAMENTAL DISHONESTY

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The matters dealt with in this piece are examined in great detail in my three volume, 1,300 page book Personal Injury Small Claims, Portals and Fixed Costs – price £50 and available from Underwoods Solicitors here.

Kerry Underwood offers consultancy services in relation to this and other matters and details are here.

These principles, and the whole issue of Qualified One-Way Costs Shifting, is dealt with in my book – Qualified One-Way Costs Shifting, Section 57 and Set-Off – Available from me here for £15.

 

In

Haider v DSM Demolition Ltd [2019] EWHC 2712 (QB) (16 October 2019)

a High Court Judge allowed the successful defendant’s appeal against the trial judge’s ruling that although the road traffic accident claim should be dismissed, the claimant had not been fundamentally dishonest.

This was a road traffic accident claim where the claimant was injured when his vehicle was struck from behind by the defendant’s vehicle.

The defendant’s case was that this was a staged crash.

The trial judge dismissed the claim, finding that the claimant’s recollection was hazy, but that he was not dishonest.

The significance of the fundamental dishonesty issue related primarily to the disqualification of the claimant’s costs protection under the regime of Qualified One-Way Costs Shifting.

However, as the claimant also appealed against the dismissal of his claim by the trial judge, any finding of fundamental dishonesty would result in the claimant’s claim being dismissed, even if he was successful on the appeal.

This is because section 57 of the Criminal Justice and Courts Act 2015 requires an otherwise successful claim to be dismissed if there is fundamental dishonesty.

Thus, the defendant argued that even if successful on appeal on liability, the claimant’s claim should then be dismissed due to fundamental dishonesty.

If unsuccessful on the appeal on liability, then the claimant should lose Qualified One-Way Costs Shifting protection, due to fundamental dishonesty.

Here, the court dismissed the claimant’s appeal on liability and allowed the defendant’s cross appeal against the trial judge’s finding that the claimant had not been fundamentally dishonest.

Thus, the claimant was deprived of Qualified One-Way Costs Shifting protection and ordered to pay costs.

An interesting feature of this case is that the fundamental dishonesty had nothing to do with the accident, but involved the claimant lying about the number of credit cards and bank accounts that he had, stating that he only had one of each, whereas in fact he had two bank accounts and two credit cards.

The relevance here was that the claimant also claimed for credit hire charges and a key issue in such claims is whether or not the claimant could afford to hire a car at normal rates, that is not on credit hire terms, which are vastly more expensive.

 

The court held:

 

“57. In my judgment this conclusion was not reasonably open to the judge. It was plainly dishonest for the Claimant not to have disclosed his credit cards or his second bank account and the accompanying documentation. The questions he was asked were not difficult (and he did not say that he had not properly understood them); they were in writing; he had time to consider his documentation; and he had the opportunity to take legal advice if he was unsure about how to answer and what to disclose. Even if he was telling the truth about his Barclaycard account having been closed, that did not relieve him of the obligation to disclose it and the associated paperwork. He gave no explanation at all for not disclosing his Vanquis Bank card, and his claim that somehow the bank had given him another account in error, into which he had just happened to pay his interim payment, was not credible. The Claimant’s actual state of knowledge was that he knew full well that he had two bank account and two credit cards, and that he had concealed this information. Nor, for the reasons I have given, could the Claimant’s failure be explained on the grounds that he was being asked to recall events from four years previously.

58. I have set out the judge’s reasoning but, with respect to him, he did not properly address the evidence. This was not simply a case where there had just been ‘not particularly good’ disclosure by the Claimant. He deliberately failed to disclose highly material evidence. There was simply no basis on which the judge could properly have concluded that the Claimant had simply got confused on these issues. The only possible reasonable inference from the evidence was that the Claimant intentionally failed to make full disclosure, and that failure can only be labelled as dishonest.

59. Was this dishonesty ‘fundamental’, in the sense explained in Howlett, supra ? In my judgment it was. The dishonesty in question did not relate to some collateral matter, but went to the root of a substantial part of the claim. The claim for credit hire charges (and associated losses) exceeded £30 000. The importance of the Claimant giving proper disclosure about his financial circumstances needs to be emphasised. Part of the purpose of a statement of truth is to bring home to party signing the solemn nature of what s/he is doing, and importance of telling the truth. To knowingly give a false statement of truth is a contempt of court: CPR r 17.6(1). Moreover, as the Defendant correctly observed in its Skeleton Argument, the County Court cannot carry out an assessment of the issue of impecuniosity when a litigant fails to give full financial disclosure. By doing as he did, the Claimant prevented the Defendant from carrying out a proper investigation into his claimed impecuniosity. This skewed and distorted the presentation of his claim in a way that can only be termed fundamentally dishonest.

60. It follows that the judge was wrong not to have concluded (per CPR r 44.16(1)) that the claim was not fundamentally dishonest so as to allow the order for costs made against the Claimant to be enforced to its full extent.

61. The Defendant relied on other matters but in light of my conclusion on the credit cards and bank accounts it is unnecessary for me to deal with them. Suffice to say I was not persuaded that the Claimant’s evidence about whether or not he applied his brakes was evidence of dishonesty, let alone fundamental dishonesty. That is something, as the judge observed, which could be explained by difficulties in recollection relating to a fleeting incident some years previously”.

 

Comment

Even if the claimant had been entirely successful on liability, his claim would have been dismissed under section 57 of the Criminal Justice and Courts Act 2015.

Thus, the facts of the accident were irrelevant – it was the dishonesty about the credit cards and bank accounts that was the key issue.

Claimants and their advisers often appear to be unaware of the reach and breadth of matters covered by fundamental dishonesty and tend to concentrate on liability issues.

One also wonders whether the defendant here would have appealed the fundamental dishonesty finding had the claimant not appealed the liability decision.

Fundamental dishonesty needs to be taken more seriously by claimant lawyers.

Written by kerryunderwood

November 6, 2019 at 9:15 am

Posted in Uncategorized

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