Three decisions involving fundamental dishonesty in 2024: Mehmood [2024]; Thakkar [2024]; and Williams-Henry [2024]

This article provides a short synopsis of three decisions so far in 2024 involving fundamental dishonesty. The higher courts have been awash with issues involving fundamental dishonesty in the last two years, including:

• Denzil v Mohammed and UKI [2023] EWHC 2077 (KB).
• Cojanu v Essex Partnership University NHS Trust [2022] EWHC 197 (QB).
• Jenkinson v Robertson [2022] EWHC 791 (QB).
• Steven Lee Woodger v Reece Hallas [2022] EWHC 1561 (QB).
• Muyepa v Ministry of Justice [2022] EWHC 2649 (KB).
• North Bristol NHS Trust v White [2022] EWHC 1313 (QB).
• Hull University Teaching Hospitals NHS Trust v Colley [2022] EWHC 854 (QB).
• Shaw v Wilde [2022] 5 WLUK 514.

Three issues of interest to practitioners have been addressed in 2024 reported cases: interim payments (Mehmood), indemnity costs (Thakkar) and substantial injustice (Williams-Henry).

Interim payments & s.57 fundamental dishonesty: Qaisar Mehmood (by his litigation friend Mrs Asma Islam) v Harry Mayor [2024] EWHC 1057 (KB).

Master Fontaine refused applications for interim payments where the two limb test in Eeles (Cobham Hire Services v Eeles [2009] EWCA Civ 204) was not in issue, liability was admitted and s.57 fundamental dishonesty was alleged on account of surveillance evidence.

The Claimant failed to establish the pre-condition that the Defendant must have admitted under CPR 25.7(1)(a) that it “pay damages or some other sum” as although liability was admitted, no damages would be payable if fundamental dishonesty was established. CPR 25.7(1)(a) did not provide a work-around.

The Master held that due to the s.57 fundamental dishonesty allegation the range of damages the Claimant might recover was from nothing to the full amount he was seeking. Thus, it was not possible, for the Court to identify an irreducible minimum and consequently conclude under CPR 25.7(4) what a “reasonable proportion of the likely amount of the final judgment” was.

Further, the Master found that the s.57 issue of fundamental dishonesty could only be resolved at trial and it was not one that could be resolved on a summary basis.

The Master concluded at paragraph [30]:

“I accept that this may cause injustice to the Claimant if, at trial, he succeeds in his claim, and the Defendant’s case on fundamental dishonesty is not accepted, in that he will not receive the funds for the recommended rehabilitation and therapy by way of an interim payment. But the requirements for ordering an interim payment are not met, for the reasons above, so I am unable to grant the application.”

Indemnity costs & s.57 fundamental dishonesty: Hiren Thakkar and Ors v AXA Insurance UK PLC [2024] EWCA Civ 552.

Lord Justice Coulson provided the lead judgment in the appeal of the decision of Richard Smith J who upheld the decision of HHJ Backhouse in which she refused to make an order for indemnity costs against the Defendants in circumstances where an allegation of fundamental dishonesty was found not proved.

It was submitted by the appellant that the burden of proof on indemnity costs was reversed where an allegation of fraud or fundamental dishonesty failed. The Court of Appeal held that there is no such presumption, or even a starting point, and the burden remained on the party seeking indemnity costs to satisfy the court they should be awarded in all the circumstances.

The Court accepted, however, that a dishonest claim would often attract indemnity costs and a failed allegation of dishonesty will very often lead to the same against the Defendant, on the simple basis that “what is sauce for the goose is sauce for the gander.”

The court warned at paragraph [28] that:

“… a defendant who makes allegations of this kind … runs a very significant risk that, if the allegations fail, indemnity costs will be awarded against them.”

Substantial injustice & s.57 fundamental dishonesty: Kirsty Williams-Henry (by her mother and litigation friend Christel Williams) v Associated British Ports Holdings Ltd [2024] EWHC 806 (KB).

Mr Justice Ritchie found the Claimant, who had fallen from Aberavon Pier in 2018, fundamentally dishonest. Ritchie J made over 100 positive findings of fact that the Claimant had lied regarding aspects of her condition in reports to doctors, the DWP and in oral evidence at court.

Ritchie J found that there would not be substantial injustice and helpfully set out eight factors to assist judges and legal practitioners determine such issues. Those factors were as follows but were non-exhaustive:

1. Amount claimed compared with the amount awarded.
2. Scope and depth of the dishonesty.
3. Effect of the dishonesty on the construction of the claim.
4. Scope and level of the claimant’s genuine disability.
5. Nature and culpability of the defendant’s tort.
6. Likely costs order if the claim is not dismissed.
7. Interim payments made and their repayability.
8. Effect of dismissing the claim on the claimant’s life.

On the facts, substantial injustice was not found and although the genuine part of the claim was £596,704, the Claimant received zero damages. The conclusions of the court at paragraph [206] was:

“On balance, I do not find that it would be a substantial injustice to dismiss the claim. I know it looks like a large sum of money to deprive a genuinely injured person of, but by drafting and passing s.57 Parliament sought to stamp out dishonesty which is fundamental in personal injury claims and the Claimant has breached this law. Finally, I take into account that the Claimant was wholly unrepentant when she gave evidence and had sought, in parallel, to defraud the DWP and L&G insurance about her disabilities.”

 

References

Qaisar Mehmood (by his litigation friend Mrs Asma Islam) v Harry Mayor [2024] EWHC 1057 (KB). Available at: www.bailii.org/ew/cases/EWHC/KB/2024/1057.html.

Hiren Thakkar and Ors v AXA Insurance UK PLC [2024] EWCA Civ 552.

Available at: www.bailii.org/ew/cases/EWCA/Civ/2024/552.html.

Kirsty Williams-Henry (by her mother and litigation friend Christel Williams) v Associated British Ports Holdings Ltd [2024] EWHC 806 (KB).

Available at: www.bailii.org/ew/cases/EWHC/KB/2024/806.html.

 

With thanks to Dan Jacklin, a Pupil at Farrar’s Building. For further information or to instruct any of our Members, please contact our Clerking Team.

 

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