The legal principle of ‘fundamental dishonesty’

It has always been important for people engaged in litigation to maintain the very highest standards of honesty and integrity. Unfortunately litigation fraud is a recognised problem and accordingly organisations like insurance companies are always on the look out for cases where dishonesty is suspected.

Personal Injury barrister Ben Handy has recently publicised his client’s success in establishing ‘fundamental dishonesty’ against kick boxer who was making an injury claim. The claimant attempted to seek compensation following a minor car accident. He claimed the low-speed accident caused injuries to his knee and head which prevented him from participating in the sport for four months. Investigations conducted by the defendants led to the discovery of a video of the claimant shot within a month of the accident, taking part in a ‘Total Full Contact’ kickboxing fight, which he won!

At the trial the Judge watched all six rounds of the contest before concluding that the claimant looked “a picture of health”.It was ruled that the claim was fundamentally dishonest, and as a result it was subsequently dismissed. The claimant not only lost his case but the Judge ordered him to pay the defendant’s costs.

So what is fundamental dishonesty? Interestingly the term is not defined in any statute, explanatory notes, the CPR or any practice direction. It is simply dishonesty which is fundamental  to the case. In this instance the dishonesty was deemed fundamental as it directly related to the period of time which the claimant was injured. It is not necessary for those alleging dishonesty to demonstrate that the entire case is dishonest, merely that a particular aspect of the claim is at odds with the truth in a manner that is fundamental to the allegations being pursued. This will include cases where a claimant exaggerates the severity of the injuries or the impact they have had on their life.

And what is the consequence of a finding of fundamental dishonesty? Firstly, it can result in Qualified One-way Costs Shifting (QOCS) protection being lost. QOCS means that if even a claimant in a personal injury case loses their claim, they do not have to pay the successful defendant’s costs. However this protection is ‘qualified’ and fundamental dishonesty is one of the ways in which protection may be lost. Secondly, such a finding means the whole claim will be dismissed under section 57 Criminal Justice and Courts Act 2015. Section 57 came into force in April 2015 and applies to PI claims issued on or after that date. The date of injury itself is irrelevant. Claims will be dismissed under this section if the Court is satisfied on the balance of probabilities that the Claimant has been fundamentally dishonest.

With so much at stake it have never been so important for people bringing (or defending) a claim to be scrupulously honest and to avoid any temptation to exaggerate or embellish the truth.

The importance of being honest: The principle of ‘fundamental dishonesty’