Fundamental Dishonesty: a risky move

Dishonesty can be a fundamental problem in many a personal injury claims but ‘fundamental dishonesty’ will most likely kill claimant’s case, effectively amounting to fraud. The question is: how dishonest does conduct have to be to amount to ‘fundamental dishonesty’?

The principle of fundamental dishonesty is referred to in the Civil Procedure Rules 44.16(1) and section 57 of the Criminal Justice and Courts Act 2015. Under s57, a personal injury claim issued since 13 April 2015 can be dismissed if the claimant has been fundamentally dishonest in the claim and provides (in part):

57 Personal injury claims: cases of fundamental dishonesty

  1. This section applies where, in proceedings on a claim for damages in respect of personal injury ("the primary claim")--

    1. the court finds that the claimant is entitled to damages in respect of the claim, but
    2. on an application by the defendant for the dismissal of the claim under this section, the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim.

  2. The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.
  3. The duty under subsection (2) includes the dismissal of any element of the primary claim in respect of which the claimant has not been dishonest….

What’s the background?

Last Autumn, the High Court ruled in Haider v DSM Demolition [2019] EWHC 2712 that a personal injury claimant had been found to have been fundamentally dishonest, and upheld the county court’s decision to dismiss his claim.

A taxi driver made a compensation claim as a result of a road traffic accident in 2014. The defendant argued that the accident was staged and that the claimant had been fundamentally dishonest in relation to a number of matters, including information the claimant had provided to secure credit hire which led to a substantial bill. The county court found that the claimant was not fundamentally dishonest (but dismissed his claim anyway for other reasons) – and did not disapply qualified one-way costs shifting (QOCS).

On appeal, Knowles JJ relied on the Court of Appeal ruling in Howlett v Davies [2018] 1 WLR 948 which set out the court’s approach. It noted that one-way costs shifting can be displaced if a claim is found to be fundamentally dishonest. Fundamentally dishonesty is defined in 2014 by the county court judge in an unreported case (Gosling v Hailo) thus:

This phrase in the rules has to be interpreted purposively and contextually in the light of the context. This is, of course, the determination of whether the claimant is 'deserving', as Jackson LJ put it, of the protection (from the costs liability that would otherwise fall on him) extended, for reasons of social policy, by the QOCS rules. It appears to me that when one looks at the matter in that way, one sees that what the rules are doing is distinguishing between two levels of dishonesty: dishonesty in relation to the claim which is not fundamental so as to expose such a claimant to costs liability, and dishonesty which is fundamental, so as to give rise to costs liability.

The corollary term to 'fundamental' would be a word with some such meaning as 'incidental' or 'collateral'. Thus, a claimant should not be exposed to costs liability merely because he is shown to have been dishonest as to some collateral matter or perhaps as to some minor, self-contained head of damage. If, on the other hand, the dishonesty went to the root of either the whole of his claim or a substantial part of his claim, then it appears to me that it would be a fundamentally dishonest claim: a claim which depended as to a substantial or important part of itself upon dishonesty.'

On that basis, Knowles J ruled that the claimant’s dishonesty was fundamental. The dishonesty in question went to the root of a substantial part of his claim (more than £30,000 worth of credit hire charges and other losses).

He also emphasised the importance of proper disclosure by the claimant about his financial circumstances - knowingly giving a false statement of truth amounts to contempt of court. He found no basis on which the judge could “properly have concluded that the claimant had simply got confused on these issues”. He had intended not to make full disclosure.

He also stated that “the County Court cannot carry out an assessment of the issue of impecuniosity when a litigant fails to give full financial disclosure. By doing as he did, the Claimant prevented the Defendant from carrying out a proper investigation into his claimed impecuniosity. This skewed and distorted the presentation of his claim in a way that can only be termed fundamentally dishonest”.

Practitioners will also be interested in an appeal in early 2019 in Central London County Court which involved a very similar set of circumstances. The claimant’s injury claim had been dismissed but he had been awarded his credit hire costs as well as costs. The insurer’s appeal succeeded, the ruling making clear that s57 applies to the entire claim, so any damages claimed can be dismissed if there has been fundamental dishonesty.


The courts are clearly loathe to effectively reward claimants in any way when they have been found to have been fundamentally dishonest in connection with the events leading to the claim, and s57 is being strictly applied.

The ruling in Haider had the financial effect on the claimant in that he lost his QOCS protection, making him fully responsible for the defendant’s costs.

Taking a shot at being dishonest when making a damages claim is highly risky and could end up costing the claimant a significant amount of money.

The industry as a whole will welcome the court’s clarity on s57 which should prove to work more effectively as a fraud deterrent.



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