Iddon v Warner [2021] EWHC 587 (QB)
Calderdale and Huddersfield NHS Trust v Metcalf [2021] EWHC 611 (QB)
Brint v Barking, Havering and Redbridge University Hospitals NHS Trust [2021] EWHC 290 (QB)
Michael v IE & D Hurford Ltd[2021] EWHC 2318 (QB)
Mustard v Flower & Ors [2021] EWHC 846 (QB)
Introduction
Over the last few years, fundamental dishonesty has become a more prominent concern in personal injury and clinical negligence claims and 2021 did not disappoint, with a number of cases involving defendants seeking or threatening to obtain findings of fundamental dishonesty.
The basic principles relating to the two separate and distinct regimes by which a finding of fundamental dishonesty can be made were previously summarised in an earlier article that appeared in Issue 2 of QMLR and therefore these are not rehearsed in detail here.
This article does not seek to review every single case where fundamental dishonesty has arisen over the last year, particularly as each case is fact specific. However, there were a number of key issues and reminders for both claimants and defendants involved in clinical negligence litigation that are worth highlighting.
Iddon v Warner (Successful claimants: s57 Criminal Justice and Court Act 2015)
One of the two routes by which a fundamental dishonesty finding can be obtained is s57 of the Criminal Justice and Courts Act 2015, which applies in cases where, absent a finding of fundamental dishonesty, the claimant would have successfully recovered damages. However, the finding of fundamental dishonesty results in the claim being dismissed and the claimant being deprived of damages unless the dishonest claimant is able to show that she would suffer substantial injustice.
The case of Iddon v Warner [2021] EWHC 587 (QB) demonstrates the potential benefits of surveillance and the pitfalls associated with social media. Breach of duty was admitted by the GP Defendant following a missed diagnosis of breast cancer, which resulted in the Claimant undergoing an unnecessary mastectomy and axillary dissection. The Claimant claimed that the unnecessary treatment had left her with debilitating chronic pain, which meant that she could not undertake a number of activities, including open water swimming and other competitive sporting activities. The Claimant sought damages in excess of £900,000.
However, in defending the claim for damages, the Defendant hired a surveillance analyst who covertly recorded the Claimant over the course of four days. The recordings evidenced that the Claimant was not a woman crippled by pain as she was able to drive longer distances than she claimed and also carry items. A review of her social media also revealed references to open water swimming and organised running events. Official results of her performance in sporting events, including a 10km run and a one-mile swim in open water, were inconsistent with her claim of debilitating pain. In a witness statement in response to that evidence, the Claimant sought to explain that she had applied to enter the events but did not in fact compete so that a friend took her place. That account was supported by a statement from her husband and another unsigned and undated statement from the friend in question. However, in cross examination, the Claimant admitted that this account was not true but still maintained that she was in chronic and debilitating pain.
At trial, the Defendant made an application for the claim to be dismissed pursuant to s57. Deputy High Court Judge Sephton dismissed the claim and entered judgment in favour of the Defendant on the basis that, on the balance of probabilities, the Claimant had been fundamentally dishonest in relation to the claim and therefore, unless the court was satisfied that the Claimant would suffer substantial injustice, the claim had to be dismissed.
In making the finding of fundamental dishonesty, HHJ Sephton QC considered the evidence in light of the authorities as to the meaning of fundamental dishonesty in some detail and concluded that the evidence did not support the claim that the Claimant suffered from chronic pain of any significance. Moreover, by the standards of ordinary decent people, the Claimant’s actions were dishonest in a number of respects, including in her assertions to the medical experts, in her witness statements, in recruiting her husband and friend to put forward a false account, in verifying the schedules of loss, and in the witness box. The judge found that the Claimant deliberately took those steps in order to mislead the Defendant and the court about the extent of her injuries and to make the consequences of the admitted breach appear more serious than they were. Her dishonesty therefore justified the adjective “fundamental”.
As s57 is a punitive provision, the mere fact that the Claimant was being penalised by having her entire claim dismissed (and losing damages for those heads of loss that were not tainted with dishonesty) did not mean that she would escape from that provision. Rather, the only means of escape would be if she could show that she would suffer substantial injustice (as explained by the High Court in London Organising Committee of the Olympic and Paralympic Games (In Liquidation) v Sinfield [2018] EWHC 51 (QB). In this case, the culpability and extent of her dishonesty far outweighed any injustice to her in dismissing her claim.
In a final blow to the Claimant in what the judge described as a “sad case”, the judge found that, had the Claimant not been fundamentally dishonest, she would have been awarded £70,050.32 for the admitted negligence. That sum of notional damages clearly falls well short of the inflated sum in excess of £900,000 that was claimed but, no doubt, at the end of lengthy litigation would have been preferable to the position in which the Claimant found herself.
Calderdale and Huddersfield NHS Trust v Metcalf (contempt of court for fundamental dishonesty)
The Claimant in Calderdale and Huddersfield NHS Trust v Metcalf [2021] EWHC 611 (QB) was even more unfortunate. In that case, the Defendant NHS Trust admitted a delay in diagnosing and treating the Claimant’s cauda equina syndrome, made an apology and made an early interim payment of £75,000. However, quantum was claimed in excess of £5.7 million and surveillance footage showed that she had exaggerated her physical injuries and disabilities. Three months before trial, the Claimant admitted lying repeatedly between 2015 and 2019 when she was assessed by experts, served her signed schedule of loss and witness statements, and agreed that the claim should be dismissed on the basis of fundamental dishonesty and the interim payment should be repaid. It was agreed that the Claimant would have been entitled to damages in the region of £350,000.
However, in a separate application for contempt of court brought by the Defendant, the Claimant was sentenced to six months’ imprisonment. Mr Justice Griffiths observed that the Claimant’s dishonesty, left undiscovered, would have resulted in her extracting millions of pounds from the Defendant and the NHS, and that her course of conduct over a number of years placed her in the upper bracket of the scale, which was a maximum of two years’ imprisonment. That said, there were a number of mitigating factors in her case which reduced the sentence, including the fact that she had lost the prospect of any compensation, she was in poor health, had a two-year-old child, and had made early admissions.
Brint v Barking (Unsuccessful claimants: CPR r.44.16)
A finding of fundamental dishonesty also has consequences for unsuccessful claimants. Pursuant to CPR Rule 44.16, which is the second route by which a fundamental dishonesty finding can be obtained, the Qualified One-Way Costs Shifting (“QOCS”) costs protection is removed in cases where a finding of fundamental dishonesty is made. The provision was introduced as an exception to the QOCS regime that came into force in 2013 as part of the Jackson reforms by removing the QOCS costs protection for unsuccessful claimants where there is a fundamental dishonesty finding and imposing liability on such claimants to pay costs. It is therefore very attractive to successful defendants who would not otherwise recover their costs under QOCS.
However, the case of Brint v Barking, Havering and Redbridge University Hospitals NHS Trust [2021] EWHC 290 (QB) serves as a reminder of the high threshold for obtaining a fundamental dishonesty finding.
The claim arose from an extravasation injury suffered by the Claimant following a CT scan with contrast at the Defendant’s hospital. Although it was accepted that the Claimant had suffered an extravasation injury, the alleged events at the hospital leading to the injury (relating to consent) and the extent and nature of the Claimant’s injuries said to be attributable to the alleged breaches were in dispute. In particular, the Defendant did not accept that the Claimant had suffered CRPS and PTSD as a result of the alleged negligence. On the eve of the trial, the Defendant notified the Claimant that it intended to allege that she had been dishonest in respect of her claim pursuant to s57 (in the event that she was successful).
As it turned out, the Claimant’s case was unsuccessful as the judge did not accept that there had been any breach of duty in relation to any part of the scan. The judge found that the Claimant’s evidence on the whole was unconvincing and unreliable. Further, in relation to causation, although the judge accepted that the Claimant had a genuine disability, her current symptoms and level of disability were not caused by the extravasation injury.
Even though s57 was not relevant as the Claimant was unsuccessful, Judge Platts went on to deal with the issue of fundamental dishonesty because the Defendant had raised an important and serious allegation in that regard against the Claimant, and the Defendant subsequently sought to rely on CPR r44.1 in seeking its costs against the unsuccessful Claimant. In support of its application, the Defendant relied upon the Claimant’s “incredible or unreliable” version of the events at the time of the scan; her “failure to give a satisfactory account of her benefits claim” and / or her “failure to give a satisfactory account of her long-standing multiple prior health conditions in her witness statement and to the experts instructed in her case”. The Defendant also made a late application after the trial had concluded and after closing submissions, but before judgment was handed down, for further evidence (the Claimant’s DWP records) to be admitted.
Judge Platts began by reminding himself of the test of dishonesty as set out in Ivey v Genting Casinos Limited (t/a Crockfords Club) [2017] UKSC 67 (at para 74): (i) whether subjectively the claimant had a genuine or honest belief, and (ii) whether, applying the objective standards of ordinary decent people she was dishonest. Although the totality of the Claimant’s evidence in this case overall was unreliable (having already found that her evidence about the events at the time of the scan and about her prior health condition was unreliable and that her evidence about the benefits claim was unsatisfactory), Judge Platts found that she was not dishonest.
The judge identified a number of relevant factors in relation to his finding on fundamental dishonesty. Apart from the fact that the Claimant’s complaints had been prompt and consistent and it was highly unlikely that she would have invented the complaints in a short period of time and remained consistent, it is of particular note that the allegation first came extremely late in the litigation (on the eve of trial) even though the Defendant knew the Claimant’s account of the scan and of her prior condition when her witness statement was served. It was therefore not a case where “the spectre of dishonesty” arose during the live evidence. The lateness of the Defendant’s averment suggested that it was not considered to be an appropriate allegation to be made until the start of trial and there was nothing which justified the change of approach.
Additionally, none of the experts or treating clinicians had accused her of being dishonest in her presentation (except for Dr Carnwarth, the Defendant’s psychiatric expert, raising the possibility of a factitious disorder) and it had not been suggested by any of the experts that she was motivated by financial or monetary reward (in fact Dr Carnwath agreed in evidence that she did not appear to be so motivated). The Claimant’s failure to be fully frank from the outset about her receipt of Disability Living Allowance was of more concern. However, the judge accepted her evidence that she thought it irrelevant because it related to her back problem about which she was not making a direct claim and also considered it relevant that she never actively denied receiving the benefit and indeed volunteered that she had received it to the Defendant’s care expert.
In relation to the belated application to admit the Claimant’s DWP records, the Judge held that it would be unfair and disproportionate to do so. The application was not made promptly and the DWP records should have been requested sooner when the Defendant became aware that the Claimant was in receipt of benefits, and no good reason had been given for the delay; the records appeared to be of limited relevance; the Claimant would have to be recalled to give evidence in order to comment on them, which would result in further costs including input from four expert witnesses, another day’s hearing, further submissions and further judicial consideration. The Judge indicated that his preliminary view was that the Defendant should pay the Claimant’s costs of the unsuccessful application to admit the additional records.
Therefore, this case indicates that where defendants consider that there is a “spectre of dishonesty” early investigations should be undertaken (including requesting any additional records), and if there is an appropriate dishonesty allegation to be made, it should be made in good time so that the claimant is given appropriate notice. Although Judge Platts indicated that the DWP records appeared to be of limited relevance in this case, in another case earlier investigation and reliance on the records might have resulted in a finding of fundamental dishonesty.
Michael v IE & D Hurford Ltd (the difference between CPR r.44.16 and s57)
The case of Michael v IE & D Hurford Ltd [2021] EWHC 2318 (QB) is not a clinical negligence case but is noteworthy as it clearly illustrates the distinction between a dishonest claim (the test under CPR 44.16) and a dishonest claimant (the test in s57).
The claim arose from a road traffic accident involving an Uber driver whose vehicle was rear-ended. Liability was admitted but, at trial, quantum of damages remained in dispute, with the Defendant insurer alleging that the claims for credit hire, personal injury and associated damages (including physiotherapy costs) were fundamentally dishonest. The claim for the cost of eight sessions of physiotherapy was supported by an invoice and unsigned, detailed notes of the treatment sessions. However, in cross-examination, the Claimant claimed not to understand the claim, saying that he had only attended one session. He also accepted that he had a second part-time job of which he had informed his solicitors and provided them with all the required credit card and bank statements. He added that he could not understand why the evidence was not before the court.
Notwithstanding the discrepancies in the claim, at first instance, the trial judge found that, whilst the claim may have been dishonest, the Claimant was not. The judge disagreed that the Claimant was “basically fraudulent”, and therefore, the application by the Defendant to rely upon s57 of the Act to strike out the claim was refused.
On appeal, the Defendants asserted that (i) the finding that the Claimant had attended only one out of eight physiotherapy sessions; (ii) the consequences of CPR Pt 22 and signing a statement of case which contained inaccuracies; (iii) the fact that the Claimant had signed the disclosure statements containing the documents supporting the physiotherapy claim; (iv) the Claimant’s failure to disclose certain credit card statements as an omission from his disclosure statement; and (v) the respondent’s failure to include in his reply that he had a second job were sufficient to establish fundamental dishonesty.
Mrs Justice Stacey explained that an application made under s57(1)(b) of the Act considered whether a claimant has been fundamentally dishonest, whereas in CPR 44.16 (in relation to disapplying QOCS) the court considers whether the claim is fundamentally dishonest.
Stacey J held that the judge was entitled to conclude from the Claimant’s cross-examination evidence that he was not dishonest. He was clearly unfamiliar with the contents of his own statement, but he was entirely honest when questioned, even volunteering information that was detrimental to his special damages claim. The judge was also entitled to conclude that the Claimant did not understand the documents that he had signed or that his solicitors had signed on his behalf orwhat the basis of the claim made on his behalf was.
Further, she explained that an inaccurate witness statement, statement of case, or disclosure statement was not necessarily evidence of dishonesty on the part of the claimant. Stacey J thus distinguished between a dishonest claim and a dishonest claimant. Stacey J suggested that an honest claimant bringing a dishonest claim may not be as rare as Julian Knowles J in London Organising Committee of the Olympic and Paralympic Games (in liquidation) v Sinfield [2018] EWHC 501 (QB) suggested when he posited that “…it will be rare for a claim to be fundamentally dishonest without the Claimant also being fundamentally dishonest, although that might be a theoretical possibility, at least“. By way of example, she suggested that where, as in the instant case, “the benefit of the disputed elements of a claim (such as physiotherapy treatment, vehicle storage and transportation and credit hire fees) are not paid to a claimant for their benefit, but paid to the service provider, by a claimant’s solicitor”, it was possible that the claim but not the claimant might be fundamentally dishonest.
Therefore, it is possible for s57 to produce a different result from CPR 44.16 in terms of whether a finding of fundamental dishonesty is made.
Somewhat surprisingly, Stacey J went on to suggest that a Defendant who seeks to obtain a finding of fundamental dishonesty may wish to explore in evidence the relationship between a Claimant and his solicitor:
“Where, as here, there was a genuine accident with genuine injuries and vehicle damage, but also aspects of the evidence which appear troubling or dishonest, a Defendant may, in order to prove dishonesty on the part of a Claimant him or herself, need to explore in evidence potential complicity or collusion by a Claimant with their solicitor. It may depend in part on the adequacy of the explanation for the inaccuracies provided by the Claimant. That did not happen in this case”
Mrs Justice Stacey added that:
“If the Defendant solicitors consider that potential dishonesty lies with a Claimant’s solicitor and not their client then surely their attention is better directed at the solicitor firms, rather than the hapless client who has instructed them?”
This suggested approach is problematic for defendants faced with aspects of a claim which they suspect are fundamentally dishonest as it is not enough to prove that the claim is dishonest but that the claimant himself is fundamentally dishonest, and (on the basis of this judgment) to do so may require investigations into potential collusion or complicity between the claimant and his solicitors. Given that the spectre of dishonesty does not always arise until oral evidence and the claimant is cross-examined at trial (as it did in this case), it would be difficult for a defendant to investigate and establish complicity and collusion for the purposes of establishing that the claimant is fundamentally dishonest in advance of trial. The claimant’s solicitors are also likely to bat away any speculative investigations as to potential collusion by raising legal professional privilege.
Given that appealing findings on fundamental dishonesty will be difficult and that the hurdle is a high one:
“However, where the trial judge has heard the evidence and has not concluded that the Claimant was dishonest, I direct myself that it would require a very clear case indeed for an appellate court effectively to overturn the trial judge’s conclusion in that respect and find that the Claimant was dishonest despite not having seen the witnesses give evidence.”
Mustard v Flower (when to plead fundamental dishonesty)
Mustard v Flower & Ors [2021] EWHC 846 (QB) is another personal injury case arising from an RTA. However, it provides valuable insight as to when and how to plead fundamental dishonesty.
The Defendant made an application to amend its defence to include the following paragraph
“4.4 The Claimant’s accounts of the RTA and its immediate aftermath, and the nature and severity of her symptoms both before and after the accident have varied over time, are unreliable and are in issue. They have been exaggerated (or in the case of her pre-RTA history minimised) either consciously or unconsciously – the Third Defendant cannot say which absent exploring the issues at trial. In the event that the Court finds that the Claimant has consciously exaggerated the nature and/or consequences of her symptoms and losses, the Third Defendant reserves the right to submit that a finding of fundamental dishonesty (and the striking out of the claim pursuant to section 57 Criminal Justice and Courts Act and/or costs sanctions including the disapplication of QOCS) is appropriate.”
Master Davison refused the Defendant’s application, specifically the inclusion of the underlined sentence. He described aspects of the proposed Amended Defence as “somewhat doom-laden wording”. He cautioned against pleading fundamental dishonesty on a “contingent” or speculative basis and made clear that it is open to the trial judge to make a finding of fundamental dishonesty whether it had been specifically pleaded or not, once the claimant has been given adequate warning or notice of the issues raised and has had an opportunity to deal with it so that the claimant is not ambushed at trial (in accordance with Howlett v Davies [2017] EWCA Civ 1696).
Master Davison acknowledged however that, until a claimant has given evidence and been cross examined at trial, neither the defendant nor the judge may be in a position to make conclusions about the claimant’s honesty. Therefore, in many cases it is not practical or proper to require a defendant to have made such an allegation prior to trial as it would not be proper for the defendant’s legal representatives to allege fundamental dishonesty based upon a mere suspicion.
Conversely, where there is a proper basis for a plea of fundamental dishonesty and the defendant intends to apply under s57, then, subject to the direction of the judge dealing with case management or the trial judge, this should ordinarily be set out in a statement of case or written application at the earliest opportunity. As he explained:
“… nothing in the foregoing is intended to detract from the modern “cards on the table” approach. Where the defendant does have a proper basis for a plea of fundamental dishonesty and intends to apply under section 57, then, subject to the direction of the judge dealing with case management or the trial judge, that should ordinarily be set out in a statement of case or a written application and that should be done at the earliest reasonable opportunity. What I am intending to discourage are pleas of fundamental dishonesty which are merely speculative or contingent.”
In this case, Master Davison held that the proposed amendment served no purpose as the Defendant could make a s57 application without foreshadowing it in a pleading and, at the time of the application and on the current evidence, the plea of fundamental dishonesty did not have real prospects of success. Moreover, it caused prejudice to the Claimant in pursuing the claim as it had to be reported to her legal expenses insurers.
It is of note that Master Davison did allow the rest of the amended pleading about exaggeration because it allowed the Defendant to explore these matters at trial. Thus, while it is appropriate and necessary for a defendant to put the claimant on notice that it will be making or exploring allegations of exaggeration, defendants should be careful not to use the threat of fundamental dishonesty as a blunt instrument if there is insufficient evidence to support such an allegation.
