What is fundamental dishonesty in a no win no fee personal injury claim?
Posted on 30th December 2023
Today, our Mark Gregory, Director at MG Legal, no win no fee personal injury specialist, delves into the crucial topic of 'Fundamental Dishonesty' in personal injury claims- a concept that has significant implications for claimants and legal practitioners alike.
Fundamental dishonesty is a concept that was introduced in the UK under Section 57 of the Criminal Justice and Courts Act 2015 in a bid to deter fraudulent or exaggerated personal injury claims. The defendant must prove the claimant has been fundamentally dishonest, and usually, fundamental dishonesty will either be discovered before the trial or arise from evidence during it.
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Understanding Fundamental Dishonesty in a Personal Injury case
The Legal Definition
Fundamental Dishonesty refers to the intentional misrepresentation or concealment of facts by a claimant in a personal injury case. This can involve exaggerating injuries, fabricating aspects of the claim, or presenting false evidence. This concept was solidified through the Section 57 of the Criminal Justice and Courts Act 2015. Under this act, if a claimant is found to be fundamentally dishonest, they risk losing their entire compensation, even if a part of their claim is legitimate.
The Impact on Claimants
This law aims to deter fraudulent claims, ensuring that only genuine victims receive compensation. It's crucial for claimants to understand that even seemingly minor exaggerations or omissions can be deemed fundamentally dishonest, leading to severe consequences.
Case Studies and Recent Rulings
The following authorities continue to provide guidance on what fundamental dishonesty means.
Ivey v Genting Casino (UK) Ltd [2017] UKSC 67
The judge must be satisfied subjectively what the claimant’s state of mind was at the relevant time, and that objectively against that background whether an ordinary person would find the claimant’s conduct to be dishonest.
The case of Ivey v Genting Casinos (UK) Ltd [2017] is a significant one in UK law, particularly concerning the concept of dishonesty within the legal system. This case, heard by the UK Supreme Court, fundamentally altered the test for dishonesty in English law, especially relevant in the context of criminal and civil law.
Background of the Case
Professional gambler Phil Ivey visited the Genting Casino, specifically Crockfords Club in London, and won a substantial sum of money playing Punto Banco, a form of Baccarat. The casino refused to pay out the winnings, amounting to £7.7 million, suspecting that Ivey had used a technique known as 'edge-sorting'. This technique involves identifying small differences in the patterns on the back of playing cards to gain an advantage.
Legal Proceedings
Ivey admitted to edge-sorting but claimed that he was not cheating because he did not consider it to be dishonest. The case eventually reached the Supreme Court, which had to decide whether Ivey's actions constituted cheating and if they were dishonest by legal standards.
The Supreme Court's Decision
The Supreme Court unanimously held that Ivey's actions amounted to cheating. More importantly, the court redefined the test for dishonesty in English law. Prior to this case, the test for dishonesty was based on the two-stage test established in R v Ghosh [1982]. The Ghosh test involved:
Determining whether the defendant's behaviour would be considered dishonest by the standards of a reasonable and honest person (objective test).
If yes, whether the defendant himself realized that his conduct was dishonest by those standards (subjective test).
Impact on the Test for Dishonesty
In Ivey's case, the Supreme Court criticized the Ghosh test, particularly its subjective element, which allowed defendants to escape liability if they genuinely believed their actions were honest, regardless of how unreasonable that belief might be. The court decided that the test for dishonesty should be solely objective: Would the defendant's actions be considered dishonest by the standards of an ordinary decent person?
This means that the court no longer considers the defendant's belief or understanding of the situation in determining dishonesty. If an action is deemed dishonest by ordinary standards, it is legally dishonest, irrespective of the defendant's personal belief system.
Howlett v Davies [2017] EWCA Civ 1696
The dishonesty goes to the root of either the whole of the claim or a substantial part of it, or a claim which depended to a substantial or important part of itself upon dishonesty.
The case of Howlett v Davies & Anor [2017] is a notable one in the context of fundamental dishonesty in personal injury claims under UK law. It provides insight into how courts approach allegations of fundamental dishonesty and the implications for claimants in personal injury cases.
Background of the Case
The case involved a personal injury claim resulting from a car accident. The claimants, Mrs. Howlett and her son, claimed to have suffered injuries from a road traffic accident. The defendants, however, raised suspicions about the authenticity of these claims, suggesting that the claimants were fundamentally dishonest about the extent of their injuries.
Legal Proceedings and Issues
During the trial at the County Court, the defendants argued that the claimants had exaggerated their injuries. Notably, the defendants did not formally plead fundamental dishonesty in their defence. However, they did raise it as an issue during the trial. The key legal question was whether the defendants could argue fundamental dishonesty when it was not explicitly mentioned in their initial defence.
Court's Decision
The County Court found in favour of the defendants, agreeing that the claimants had been fundamentally dishonest. The claimants appealed, arguing that fundamental dishonesty should not have been considered as it was not explicitly raised in the defendants’ pleadings.
However, the Court of Appeal upheld the County Court’s decision. It ruled that even if fundamental dishonesty is not specifically pleaded in the defence, it can still be raised and considered during a trial if there are sufficient grounds to do so. The court emphasised that the concept of fundamental dishonesty relates to the conduct of the party, not just to the pleaded case.
Implications of the Howlett v Davies Case
This case demonstrates that in personal injury litigation, allegations of fundamental dishonesty do not necessarily need to be detailed in the initial pleadings to be considered valid. It highlights that if evidence arises during the proceedings that suggests dishonesty, the court can take this into account, even if it was not a formal part of the defence’s initial case.
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London Organising Committee of the Olympic and Paralympic Games v Sinfield [2018] EWHC 51 (QB)
A claimant should be found to be fundamentally dishonest if he has acted dishonestly and has thus substantially affected the presentation of his case in a way which potentially adversely affects the defendant in a significant way, and by “substantially affects” it is intended to convey the same idea as the expressions “going to the root” or “going to the heart” of the claim.
The case of London Organising Committee of the Olympic and Paralympic Games (LOCOG) v Sinfield [2018] is a significant one in the context of fundamental dishonesty in personal injury claims in the UK. This case is often cited as it clearly demonstrates how courts interpret and apply the concept of fundamental dishonesty in personal injury litigation.
Background of the Case
Mr. Sinfield, a volunteer at the 2012 London Olympics, suffered an injury to his wrist. He subsequently made a personal injury claim against LOCOG. In his claim, Mr. Sinfield included an element for gardening assistance, asserting that due to his injury, he had to hire a gardener.
Legal Proceedings and Issues
During the proceedings, it emerged that Mr. Sinfield had indeed employed a gardener before his injury, and he had exaggerated the extent of his gardening expenses post-injury. This revelation led to allegations of fundamental dishonesty.
The key issue was whether Mr. Sinfield's dishonesty about a part of his claim (the gardening expenses) would render his entire claim fundamentally dishonest, thereby exposing him to the risk of losing all of his compensation under Section 57 of the Criminal Justice and Courts Act 2015.
Court's Decision
The court ruled that Mr. Sinfield had been fundamentally dishonest about a significant part of his claim. It was determined that his dishonesty regarding the gardening expenses was not incidental but was substantial enough to taint his entire claim.
Importantly, the court clarified that for a claim to be dismissed for fundamental dishonesty under Section 57, the dishonesty does not need to be in relation to the primary claim (in this case, the injury itself). Dishonesty in any substantive part of the claim, including ancillary aspects like expenses, can lead to the dismissal of the entire claim.
Implications of the Sinfield Case
The Sinfield case is important as it illustrates that even partial dishonesty in a claim can have severe consequences. It underscores that dishonesty in any part of a personal injury claim, no matter how seemingly minor or unrelated to the primary injury, can lead to the claim being dismissed in its entirety. This case serves as a stark warning to claimants about the risks of exaggerating or fabricating any part of their claim.
Pegg v Webb [2020] EWHC 2095 (QB)
If the dishonesty went to the root of either the whole of the claim or a substantial part of his claim then it would be a fundamentally dishonest claim.
The case of Pegg v Webb [2020] is another noteworthy case in UK law regarding fundamental dishonesty in the context of personal injury claims. It offers insights into how courts assess and determine fundamental dishonesty, particularly in relation to exaggeration of injuries.
Background of the Case
The case involved a personal injury claim by Mr. Pegg against Mr. Webb following a skiing accident. Mr. Pegg claimed to have suffered significant injuries affecting his ability to work and partake in certain activities.
Legal Proceedings and Issues
During the trial, evidence was presented that called into question the severity of Mr. Pegg's injuries. This included social media evidence and surveillance footage showing Mr. Pegg engaging in activities that seemed inconsistent with his claimed level of disability.
The key issue was whether Mr. Pegg had been fundamentally dishonest about the extent of his injuries and the impact they had on his life. The defendants argued that Mr. Pegg had exaggerated his injuries, thereby committing fundamental dishonesty.
Court's Decision
The court found that while Mr. Pegg had indeed exaggerated some aspects of his injury's impact, this did not amount to fundamental dishonesty. The judge noted that while there was inconsistency in Mr. Pegg’s presentation of his injuries, it was not sufficient to prove that his entire claim was tainted by dishonesty.
The court differentiated between mere exaggeration (which can be common in personal injury claims due to differing perceptions of pain and disability) and outright dishonesty that fundamentally distorts the claim. In this case, the judge held that the exaggeration did not reach the threshold of fundamental dishonesty that would justify dismissing the entire claim under Section 57 of the Criminal Justice and Courts Act 2015.
Implications of the Pegg v Webb Case
The Pegg v Webb case is significant as it demonstrates that not all exaggerations in a personal injury claim will lead to a finding of fundamental dishonesty. It highlights the need for a nuanced approach in distinguishing between genuine claims with some level of exaggeration and those that are fundamentally dishonest.
Cojanu v Essex Partnership University NHS Trust [2022] EWHC 197 (QB)
The claimant had been dishonest about the circumstances of his originating injury which gave rise to the need for clinical treatment which was delayed and thereby negligent, and this dishonesty was found at first instance to be fundamental. This was overturned on appeal, that dishonesty being irrelevant to his clinical negligence claim. A five-stage test at [47] was set out: the section 57 defence should be pleaded; the defendant bore the burden of proof to the civil standard; a finding of dishonesty is necessary; that dishonesty must relate to a matter fundamental to the claim; and it must have a substantial effect on the presentation of the claim.
Impact of Fundamental Dishonesty on a Personal Injury Claim
Loss of QOCS Protection
If a court finds that a claimant has been fundamentally dishonest, they can lose the protection offered by Qualified One-Way Cost Shifting (QOCS). This means the claimant could be ordered to pay the defendant's legal costs, which can be substantial.
Dismissal of the Claim
Even if part of the claim is genuine, the presence of fundamental dishonesty can lead to the entire claim being dismissed. Courts take a strict approach to dishonesty to discourage fraudulent behaviour.
Financial Consequences
Apart from losing the case and potentially paying the defendant's costs, the claimant might also be ordered to repay any compensation already received. There can also be additional financial penalties.
Criminal Prosecution
In severe cases, fundamental dishonesty can lead to criminal charges for fraud. This can result in criminal prosecution, fines, and even imprisonment.
Reputational Damage
Being found fundamentally dishonest can severely damage the claimant's reputation, affecting future legal proceedings and potentially other areas of their life.
Insurance Implications
Insurance companies may refuse to cover the costs of a claim found to be fundamentally dishonest. This leaves the claimant personally liable for all costs involved.
Key Takeaway
Fundamental dishonesty can have severe repercussions on a personal injury claim. It not only jeopardises the current claim but can also have long-lasting legal and financial consequences. Therefore, it's crucial to be completely honest and transparent in all aspects of your claim. If you're involved in a personal injury claim, it's advisable to seek guidance from a legal professional to ensure your case is presented accurately and effectively.
MG Legal's Approach to Avoiding Fundamental Dishonesty
Our Ethical Practices
At MG Legal, we prioritise honesty and transparency. Our experienced personal injury solicitors guide clients through the process, ensuring all claims are backed by factual evidence.
Client Education and Support
We believe in educating our clients about the importance of honesty in their claims. Our team provides comprehensive support, helping clients understand the legal implications of their case details.
Fundamental dishonesty is a critical concept in personal injury law, with severe consequences for dishonest claimants. At MG Legal - No Win No Fee Personal Injury Solicitors, we are committed to upholding the highest standards of honesty and integrity. Contact us for expert legal guidance on your personal injury claim.
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