Contributors
The court has the power to dismiss a claim for damages where it is satisfied that, on the balance of probabilities, the claimant has been "fundamentally dishonest" in relation to the claim, unless the claimant would otherwise suffer "substantial injustice": section 57 Criminal Justice and Courts Act 2015.
A look back - what is "substantial injustice"?
What amounts to "substantial injustice" is not defined within the Act.
The first authoritative case from the higher courts upon the practical application of section 57 and the principles of fundamental dishonesty was London Organising Committee for the Olympic and Paralympic Games (in Liquidation) v Sinfield [2018] EWHC 51 (QB). The claimant claimed the costs of employing a gardener to assist him with the upkeep of his two-acre garden, but it transpired that he had always employed a gardener. Knowles J held that the claimant was fundamentally dishonest and the entire claim must be dismissed including any genuine element of the claim, unless he could show that he would suffer substantial injustice. Whilst he declined to define precisely what would amount to "substantial injustice" due to the infinite variety of circumstances which might arise, Knowles J stated that the wording of the Act intended the sub-section to be punitive and to operate as a deterrent to claimants. On this basis, substantial injustice must be more than the fact the claimant would lose his damages for those heads of claim not tainted with dishonesty.
The cases of Howlett v Davies and Ageas Insurance Ltd [2017] EWCA Civ 1696 and Razumas v Ministry of Justice [2018] EWHC 215 (QB) both endorsed the approach that substantial injustice should amount to something more than the mere loss of damages to which the claimant would otherwise be entitled, but again, did not provide any explanation as to what would need to be shown in order to prove this.
Protected parties
In the case of Patel v (1) Arriva Midlands Ltd (2) Zurich Insurance PLC [2019] EWHC 1216 (QB), the claimant (a pedestrian) was involved in a collision with the defendant's bus causing him to suffer a brain haemorrhage and other injuries which deteriorated causing him significant disability. The claimant alleged his injuries meant that he now lacked capacity to bring the claim and his son acted as his litigation friend. When both parties' experts assessed the claimant on different occasions in 2015 and 2016, they each found him unresponsive, mute and with no movement in his limbs. Neither expert found a neurological cause for the claimant's condition. In 2016 the defendant disclosed surveillance evidence taken over several days showing the claimant walking, speaking and shopping. Based upon this evidence together with the lack of any other medical explanation, the defendant's expert concluded that the claimant's illness was feigned. The defendant amended its defence and at an interlocutory hearing, sought to seek to strike out the claim on the grounds of fundamental dishonesty. The claim was dismissed and damages for the honest part of the claim were assessed at £5,750.
The claimant disputed the timing of the strike out hearing and submitted that the court could not assess the issue of substantial injustice on an interlocutory basis. Sitting in the High Court, HHJ Clarke held that the Court could validly assess the extent of the claim that it was dismissing without full quantification having taken place and that this in itself did not give rise to substantial injustice. As well as upholding dishonesty on the part of the litigation friend, HHJ Clarke also found the claimant himself to have been fundamentally dishonest in relation to his claim by his presentation, as well as by not correcting the false impression of his disabilities given by his litigation friend to the doctors or his solicitors at any time during the course of the proceedings. She also held that the claimant must be presumed to have capacity and was therefore not to be treated as a protected party.
HHJ Clarke was satisfied that the dishonest part of the claim was the bulk of the pleaded claim by value, despite the claimant not having had the opportunity to serve a fully pleaded schedule of loss. The witness evidence pleaded the need for the claimant to receive substantial care for the rest of his life, and if the claim was to be dismissed it was submitted that this would cause him substantial injustice (on the basis that the family did not have the funds to provide for commercial care). The Court did not feel that this amounted to substantial injustice as there was no medical evidence to support this prognosis, and in any event such submissions were un-pleaded and un-evidenced and so could not by definition form part of the pleaded claim.
What is on the horizon for 2020?
On application of the above case law, it is clear that the courts will only find "substantial injustice" in exceptional circumstances. The specific intention that the wording of the Act should operate as a deterrent (Sinfield) has been staunchly applied by the Courts. Furthermore, a finding of fundamental dishonesty can be made prior to full quantification of the claimant's claim.
The approach taken by the court in Patel is perhaps not surprising given the clear disparity between the claimant's symptoms as described to the medical experts, and his presentation as seen in the surveillance footage. Had the exaggeration and dishonesty by the claimant and his litigation friend not been so stark, the Court might have considered the issue of "substantial injustice" differently.
We continue to await definitive examples from the higher courts of what may amount to substantial injustice. As Knowles J suggested in Sinfield, the Courts may deliberately seek to avoid giving specific examples, so as not to fetter their powers to consider what may amount to substantial injustice in the wider context. As such, developments will continue to be considered on a case by case basis.
