Aidan O’Brien: Fundamental Dishonesty & Substantial Injustice

Following the recent decisions of Howlett v Davies and Ageas Insurance Ltd [2017] EWCA Civ 1696 and LOCOG v Sinfield [2018] EWHC 51 (QB), the High Court has further considered the application of ‘fundamental dishonesty’ in the case of Razumas v Ministry of Justice [2018] EWHC 215 (QB).

Razumas involved a clinical negligence claim, made by a prisoner against the MoJ, wherein it was alleged that there had been a negligent failure to diagnose cancer resulting in an above knee amputation. During the trial, the Court heard that the prisoner had lied about seeking treatment and that he had sought to base one of his allegations of negligence on this false assertion.

The Criminal Justice and Courts Act 2015, Section 57 (applying to all PI claims issued after 13 April 2015), dictates that where a claimant is entitled to damages, the entirety of his claim must be dismissed if he is found to have been fundamentally dishonest in respect of the primary or related claim, save where he would suffer substantial injustice if it were dismissed.

In Razumas, Mrs Justice Cockerill was asked to consider the issue of fundamental dishonesty and the application of Section 57.  On the balance of probabilities, it was determined that the Claimant had been fundamentally dishonest, given that his ‘…dishonesty went to one route to succeed on it in full’.

In considering whether the Claimant would suffer substantial injustice if the entirety of his claim were dismissed, it was determined that ‘…something more’ was required than the mere loss of damages to which the claimant is entitled to establish substantial injustice.

Practice Points:

• Section 57 only applies where a claimant has an entitlement to damages – it follows that if liability is not admitted – or the claimant loses at trial – then a defendant cannot seek an order under this section.
• For an order to be made under section 57, a finding of fundamental dishonesty must be made. In common with the QOCs provisions under CPR 44.16, the Balance of Probabilities Standard applies.
• If fundamental dishonesty is established then the whole of the claim may be dismissed.
• When considering what constitutes ‘fundamental dishonesty’, the Court of Appeal decision of Howlett v Davies and Ageas Insurance Ltd (endorsing HHJ Maloney’s definition in Gosling v Hailo) applies.
• The Court retains a residual discretion under this section to permit the claim if dismissal would cause ‘substantial injustice’ to the claimant.
• Something more is required than the mere loss of damages to which the claimant is entitled to establish substantial injustice.
• When a Court dismisses a claim under this section, it is still obliged to record the amount of damages that would have been awarded but for the strike out.  That sum is then deducted from any costs order made in favour of the Defendant.

Aidan O’Brien is a member of Farrar’s Building Clinical Negligence, Personal Injury & Fraud Teams and accepts instructions from both Claimants and Defendants. Aidan frequently delivers training, seminars and workshops upon request. Any such request should be made to the Farrar’s Building Clerking Team on +44 (0)20 7583 9241 or by email at chambers@farrarsbuilding.co.uk.

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