This article originally appeared in Issue 2 (July 2019).


There are two separate and distinct regimes relating to fundamental dishonesty in litigation which have been available in personal injury claims since 2013. However, in the last year or two, there has been increasing attention focused on the perils and opportunities of the fundamental dishonesty provisions. Those representing both claimants and defendants should be aware of these provisions and the developing principles and case-law governing this area. They have serious costs consequences and can affect damages recoverable, even where a claimant would successfully establish liability otherwise. 

Unsuccessful claimants: CPR r.44.16(1) 

CPR Rule 44.16(1) was introduced as a counter-balance to the Qualified One-Way Costs Shifting regime (“QOCS”) that came into force in 2013 as part of the Jackson reforms. It creates an exception to the QOCS regime by imposing liability on unsuccessful claimants to pay costs where they are found to be fundamentally dishonest on the balance of probabilities. 

The court will usually determine the question of fundamental dishonesty at trial where such an allegation is raised by the defendant. However, as set out in PD44.12(4), where the matter is settled, the court will not, save in exceptional circumstances, determine issues arising out of an allegation that the claim was fundamentally dishonest. In contrast, if the Claimant has simply discontinued proceedings, the court may direct that issues arising out of an allegation of fundamental dishonesty be determined. 

Where the court makes a finding that the claim is fundamentally dishonest, the court may determine the costs attributable to the claim having been found fundamentally dishonest as it thinks fair and just. 

Successful claimants: s.57 Criminal Justice and Courts Act 2015 

Section 57 of the Criminal Justice and Courts Act 2015 (“the CJA”) applies to cases where the claimant successfully establishes liability but where the defendant alleges that the claimant is fundamentally dishonest in relation to the primary claim or a related claim. 

It is important to note, however, that a court may make a finding of fundamental dishonesty even if that has not been pleaded expressly, provided that the claimant has had fair notice of the challenge to his or her honesty and an opportunity to deal with it at trial (see Howlett v Davies [2017] EWCA Civ 1696). 

The court must be satisfied on the balance of probabilities that the claimant has been fundamentally dishonest (s.57(1)) but once so satisfied the court must dismiss the entire claim, unless the claimant would suffer “substantial injustice” (s.57(2)). 

In such cases, the otherwise successful claimant, who is found to be fundamentally dishonest, is required to pay the defendant’s costs subject to a deduction of damages as assessed by the court and that would have been awarded but for the finding of fundamental dishonesty (s.57(5)). In cases where the claimant’s notional damages are higher than the defendant’s assessed costs then it follows that the costs recoverable are nil. However, in cases where the notional damages are lower than the assessed costs, the claimant will have to pay the difference to the defendant. 

In addition to dismissal of the claim with consequential loss of damages, and a costs sanction, a claimant found to be fundamentally dishonest also faces a potential threat of subsequent criminal proceedings and proceedings for contempt of court (s.57(6)). 

The meaning of fundamental dishonesty 

As was explained in Menary v Darnton, 13 December 2016 unrep., in relation to CPR 44.16(1), a fundamentally dishonest claim is one where the dishonesty “strikes at the very root” of either the whole of the claim or a substantial part of it. A “peripheral matter” would not be “fundamental”. As to dishonesty, “it is the advancing of a claim without an honest and genuine belief in its truth” and it is to be distinguished from “the exaggerations, concealments and the like that accompany personal injury claims from time to time”. Subsequently, the Court of Appeal in Howlett v Davies, approving HHJ Moloney in Gosling v Hailo, 29 April 2014 unrep., explained that it is “a claim which depended as to a substantial or important part of itself upon dishonesty”

The requirement in the CPR is that the fundamental dishonesty relates to the claim rather than the claimant. The court in Menary took the view that the focus on the claim must have been “deliberate on the part of those who drafted the CPR. It is the claim that the defendant has been obliged to meet, and if that claim has been tainted by fundamental dishonesty, then in fairness and in justice, and in accordance with the overriding objective, the defendant should be able to recover the costs incurred in meeting an action that was proved, on balance, to be fundamentally dishonest.” 

Whether that means that the subsequent focus on the claimant rather than the claim in s.57 of the CJA was intended to make a deliberate distinction is unclear. However, when considering the meaning of fundamental dishonesty specifically in relation to s.57, Knowles J in London Organising Committee of the Olympic and Paralympic Games (In Liquidation) v Sinfield [2018] EWHC 51 (QB) (LOCOG) considered a number of cases on the meaning of fundamental dishonesty, including Howlett v Davies, and held that:

“… a claimant should be found to be fundamentally dishonest within the meaning of s.57(1)(b) if the defendant proves on a balance of probabilities that the claimant has acted dishonestly in relation to the primary claim and/or a related claim … and that he has thus substantially affected the presentation of his case, either in respect of liability or quantum, in a way which potentially adversely affected the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation”. 

As to the meaning of dishonesty itself, Knowles J referred to the test for dishonesty set out by the Supreme Court in Ivey v Genting Casinos Limited (t/a Crockfords Club) [2017] UKSC 67, and explained that:

“… whilst dishonesty is a subjective state of mind, the standard by which the law determines whether that state of mind is dishonest is an objective one, and that if by ordinary standards a defendant’s mental state is dishonest, it is irrelevant that the defendant judges by different standards”

Recent authorities 

Recent authorities suggest that both CPR 44.16(1) and s.57, but particularly the latter, are being deployed more frequently and with increasing success. 

For example, in Razumas v MOJ [2018] EWHC 215 (QB), the MOJ raised s.57 at trial on the basis that the court had found the Claimant to have lied in pleadings and in evidence about having sought medical attention while he was on release from prison. The MOJ asserted that the claim for damages arising from the alleged clinical negligence in prison should be dismissed on the basis of fundamental dishonesty. The court “gratefully adopted” the approach in Gosling v Hailo and held that the Claimant had acted dishonestly in relation to his claim which had “substantially affected the presentation of his case … in a way which adversely affected the defendant in a significant way”. The court dismissed the claim for other reasons but held that, had there been a successful claim, it would have been dismissed on the basis of s.57. Additionally, the court held that, in order to avoid the consequences of s.57, the Claimant would have to show something more than the loss of damages to demonstrate substantial injustice. To do otherwise would be “to cut across what [s.57] is trying to achieve”

In Pinkus v Direct Line [2018] EWHC 1671 (QB), the Claimant sought substantial damages for injuries suffered following an RTA. The Defendant admitted causing the collision but disputed the nature and severity of the damage and consequential injuries. Although fundamental dishonesty had not been pleaded expressly, the claim was dismissed at trial in accordance with s.57 on the basis that the Claimant was found to have deliberately and consciously exaggerated the facts around the accident, his consequential symptoms, and his pre-index situation. The Claimant’s Facebook posts were used to undermine his claims and his experts were found to lack objectivity and to have failed to acknowledge the inconsistencies in his evidence. The dishonesty was found to be “close to the heart” of the claim. The Claimant would have been awarded damages but for s.57, but his claim was dismissed, and he was ordered to pay the Defendant’s costs on an indemnity basis. 

Similarly, in Sudhirkumar Patel v Arriva Midlands Limited [2019] EWHC 1216 (QB), the Defendant insurer relied on surveillance evidence in support of a successful application made shortly before trial to amend the Defence in order to plead fundamental dishonesty. The Claimant, who had been assessed previously as lacking capacity, was found to have capacity at trial. His expert’s previous assessment was found to have been made on the basis of incorrect information gleaned from the Claimant’s dishonest presentation and from false information from the Claimant’s son. Notwithstanding what was left of the claim, the lifetime care needs claimed to be consequential upon the untenable psychiatric diagnosis were fundamentally dishonest and there would be no substantial injustice in dismissing the claim. 

That said, defendants should not rush to deploy s.57 in every case. In Spencer Smith v Ashwell Maintenance, 23 January 2019 unrep., the court found that whilst there had been exaggeration as to the effect of the Claimant’s injury, it was not a case of outright faking of pain or gross exaggeration as had been submitted by the Defendant employer in support of its application for dismissal. The Defendant relied on covert surveillance evidence, bank statements, and evidence of the Claimant’s appearance on a television show and argued that his presentation to the medical experts and his approach to the claim overall was so exaggerated as to amount to fundamental dishonesty. In declining to dismiss the claim, the court noted that, although the Defendant eventually admitted breach in relation to the index accident at work, the Defendant had shown a determination to avoid compensating the Claimant fully so that the Claimant’s exaggerations were “the result of an attempt by him to convince, rather than to deceive”

This article is adapted from a longer talk co-written with Jo Moore at 1 Crown Office Row.