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Editorial: Further Thoughts on Fundamental Dishonesty - Aidan Ellis, Temple Garden Chambers

19/05/17. In claims to which qualified one way costs shifting applies (now the vast majority of personal injury claims though some older cases still remain), it is often the issue of fundamental dishonesty in CPR 44.16 which determines whether or not the Defendant can enforce an order for its costs against the Claimant. But there is still a dearth of higher court authority on the meaning or application of that term. Past editorials have attempted to shed light on the definition by reference to decided County Court cases. This edition continues that theme by considering the case of Menary v Darnton (HHJ Hughes QC, Portsmouth County Court, 13 December 2016).

In Menary v Darnton, the claim arose from the Claimant’s allegation that he had been injured and his car had been damaged in a road traffic accident. The Defendant’s case was that there had been no collision and that the claim was dishonest. At first instance, the Court accepted the Defendant’s evidence and found that there had been no collision. But the Court went on to find that the claim was not fundamentally dishonest, relying in part on the Claimant’s disclosure of his (unhelpful to him) pre-existing medical history as evidence of his fundamental honesty.

That surprising conclusion was reversed on appeal. HHJ Hughes QC emphasised that for the purposes of CPR 44.16 it is the claim that must be fundamentally dishonest not the Claimant. It is possible for a naïve Claimant to be led on by a dishonest accident management company, but if the resulting claim is fundamentally dishonest then the 44.16 would still apply. The Court further relied on the natural meaning of the word fundamental as “some characteristic that goes to the root of the matter”. In finding that the claim was indeed fundamentally dishonest, the Court emphasised the finding of fact that there was no accident. The inescapable conclusion was that there could no honest claim; without a collision, there could be no injury and there could be no damage to the vehicle. In that light, the Claimant’s disclosure of his medical history could not prevent the conclusion that his claim was fundamentally dishonest.

Experience suggests that having made robust findings on liability or causation, Courts at first instance are sometimes reluctant to make a finding of fundamental dishonesty. Of course, the result of the appeal in Menary v Darnton was assisted by the clear pleading of dishonesty in the Defence and by the clear finding of fact that there was no accident. But what is most striking is the reminder, which should not need stating, that the judgment on fundamental dishonesty as it relates to costs has to consistent with the judgment on liability. If there is a finding that there was no collision then, absent an honest mistake, a finding of fundamental dishonesty should often follow. If it does not, the decision on costs may well be amenable to appeal.

Aidan Ellis
Temple Garden Chambers

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