The term Fundamental Dishonesty was introduced to Personal Injury Claims following changes to the Civil Procedure Rules in 2013 and the introduction of Qualified One-Way Cost Shifting.
A claim for Personal Injury will result in a Win either for the Claimant or the Defendant following which, the general rule was, the losing party pays the winning party’s costs in addition to their own costs. Fair and straight forward.
On the 1st of April 2013, a new concept of Qualified One-Way Cost Shifting was introduced. Since then, if a Defendant successfully defends a claim i.e. the Claimant loses, the Defendant is generally unable to recover costs from the Claimant. Although an order for costs is made against the Claimant, the norm is that the order is ‘not to be enforced’.
On the face of it, this represents a Win Win situation for a losing Claimant. A protective shield, if you like, against Defendant costs. BUT (isn’t there always) the protective shield can be lost and that’s where Fundamental Dishonesty or FD, for those of us who like to shorten things, comes into play.
As the name suggests, FD is a claim that is dishonest. The Courts determine ‘dishonesty’ by applying an objective standard of ordinary, decent people. Whilst there is no formal definition of what is, ‘fundamentally’ dishonest, caselaw has established that if the dishonesty goes to the ‘root of’ or ‘substantially affects’ either the whole or a substantial part of the claim, then it’s FD. FD may relate to liability i.e. the incident itself and/or the value of the claim (quantum).
Examples of findings of FD in claims where liability had previously been admitted, include a claim for gardening services where the claimant failed to disclose that he required such services prior to the accident and provided ‘self-billing’ invoices, (London Organising Committee of the Olympic & Paralympic Games (in liquidation) v Haydn Sinfield) or an inflated claim for loss of earnings (Amdur v Krylov).
Some principles arising from the case law are, FD does not have to form part of the Defence to a claim rather it can be raised at any time; FD doesn’t apply to Defendants (that’s parity for you); withdrawing or correcting elements of the claim will not necessarily allow a Claimant to escape a finding of FD and further, the Court will distinguish between FD and those parts of the claim unproven – the two are not treated the same.
So, what are the consequences of a finding of FD? It’s grim. Not only will a dishonest Claimant lose their cost protection, finding themselves with a hefty legal bill, under Section 57 of the Criminal Justice & Courts Act 2015, the Court has the power to dismiss the whole claim. Worse still, a Claimant may face proceedings for contempt of Court and if found guilty, a custodial sentence can be imposed, as celebrity Alex Reid recently discovered (AXA Insurance UK Plc v Reid).
Quite rightly, dishonesty is not condoned by anyone in the industry. Claimants should be aware that dishonesty, exaggeration and failing to disclose or volunteer information can lead to a perilous outcome.
All that gloom shared, time for a little perspective! In our experience, fraud and dishonesty are not commonplace. An honest and genuine Claimant has nothing to fear from FD and should not be dissuaded from pursuing a legitimate claim. At CAPA LAW Solicitors, we have decades of experience in successfully pursuing Personal Injury Claims. As your seasoned representatives, not only are we alive to the issues you may face in pursuing your claim, but we are also experienced in dealing with them. It’s our role to assess and evaluate your evidence whilst guiding you through the litigation process, allowing you to make informed decisions about your claim.
If you have suffered personal injury and wish to make a claim then CAPA LAW can help. Call on 0151 662 0345 or email, enquiry@capalaw.co.uk
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