Fundamental Dishonesty; Clarity from the Courts

Although now a fact of life for personal injury lawyers since its introduction in April 2013, one aspect of QOCS (Qualified One Way Costs Shifting) has given rise to uncertainty: namely the thorny issue of how “fundamental dishonesty” is defined and how the term also applies to the Criminal Justice and Courts Act 2015 (“CJCA”).   Two recent cases have provided welcome guidance and clarity for both practitioners and litigants.

Qualified One Way Costs Shifting

The QOCS regime applies to personal injury claims and was intended to provide costs protection for both Claimants and Defendants. However, it is not just personal injury lawyers who need to be aware of the rules: any claim falls within the scope of QOCS even if “a claim for damages for personal injury plays a very minor and subsidiary part of the claims advanced” (as per Morris J in Jeffreys v Commissioner of Police for the Metropolis [2017] EWHC 1505 (QB)).

Under QOCS, a successful Defendant is no longer automatically entitled to recover their costs from the Claimant. Instead, in most cases a Defendant who wins will shoulder their costs regardless of how tenuous the claim may have been. However, there are important exceptions to the QOCS rules including CPR r.44.16 which allows Defendants to recover their costs from a losing Claimant in circumstances where the Claimant was found to be “fundamentally dishonest”. When one considers that the costs of defending even a low value road traffic injury case can exceed £10,000, it is obvious that the aim for many Defendants is to persuade a Judge to make such a finding.

What has created difficulties for both parties and Judges alike is the fact that the Civil Procedure Rules do not define what is meant by “fundamental dishonesty” and until recently the most authoritative guidance available was the well-reasoned and well-respected but ultimately non-binding (and unreported) decision of HHJ Maloney QC in the county court decision of Gosling v Halo (LTL 28.7.14).

HHJ Maloney’s decision has now been confirmed by the Court of Appeal in the case of Howlett v Ageas [2017] EWCA Civ 1696, a case which also clarified the procedural requirements for a finding of fundamental dishonesty.

Howlett v Ageas

In Howlett, the Claimants had brought a claim for personal injuries arising out of an alleged road traffic accident involving a car being driven by the First Defendant Ms Davies. Ageas, the Defendant’s insurer, was joined as the Second Defendant and defended the claim on the basis that the accident had never in fact taken place. The Claimants lost at trial and were found by the judge to have been fundamentally dishonest. The case was appealed to the Court of Appeal on grounds that “fundamental dishonesty” had not been pleaded, that it had not been made clear enough during the cross-examination of the Claimant that fundamental dishonesty was being alleged and essentially that the Judge should not have made his finding.

The Court of Appeal’s determination was that no express pleading was required for a finding of fundamental dishonesty to be made. The Court also decided that as long as the Claimant was put on sufficient notice that their honesty was under challenge, and had an opportunity to answer that challenge, the use of specific words such as “dishonest” or “lying” was not a pre-requisite to a finding of fundamental dishonesty.

In addition, the Court of Appeal approved the test applied in Gosling and confirmed that unless a Claimant’s dishonesty “went to the root of either the whole of his claim or a substantial part of his claim” a finding of fundamental dishonesty should not arise even where a Claimant has “been dishonest as to some collateral matter or perhaps as to some minor, self-contained head of damage”.

The Interplay with Section 57 Criminal Justice and Courts Act 2015

Still further guidance about the meaning of “fundamental dishonesty” has been handed down even more recently in the High Court case of London Organising Committee for the Olympic and Paralympic Games (In Liquidation) v Sinfield [2018] EWHC 51 (QB). The case of LOCOG concerned the application of section 57 of the Criminal Justice and Courts Act (“CJCA”) 2015.

Under section 57 CJCA, unless the court is satisfied that dismissing the claim would cause the Claimant to suffer “substantial injustice”, a Claimant will see their claim for damages dismissed if the court concludes that the Claimant has been fundamentally dishonest. So, whereas the QOCS exception under CPR 44.16 only comes into play when a Claimant loses their case the section 57 CJCA provision applies where the Claimant has (at least on the face of it) succeeded.

In LOCOG the Claimant had been injured whilst volunteering at the London 2012 Olympic Games, liability had been admitted and the matter listed for a trial on quantum. The Claimant, Mr Sinfield, had included within his Schedule of Loss a claim for almost £14,000 for the cost of employing a gardener and claimed that his injury had prevented him from doing the gardening himself. The claim for gardening expenses accounted for around 40% of the claim and invoices were disclosed in support of the claim.

However, it transpired that Mr Sinfield had in fact employed a gardener on a weekly basis for many years and the invoices had been written by the Claimant himself. At trial the judge decided that whilst there had been an “error” on Mr Sinfield’s part he had not been fundamentally dishonest and that even had he been, it would be unjust to dismiss the entirety of the claim when the dishonesty only related to part of the claim.

On appeal to the High Court Mr Justice Knowles found that a Claimant should usually be found to be fundamentally dishonest if the Defendant was able to show, on the balance of probabilities, that the Claimant had been dishonest with regards to the main or a related part of the claim and that the way in which the claim was presented was “substantially affected” by the dishonesty.

Even if such a decision would, under section 57 CJCA, result in a Claimant losing their damages for the genuine parts of the claim this would not of itself amount to a “substantial injustice” as the purpose of section 57 was to be a punitive measure and to act as a deterrent. In the absence of evidence to support a finding of “substantial injustice” Mr Sinfield was therefore deprived of the £26,000 he would otherwise have received in damages.


Both cases act as reminders to personal injury lawyers and litigants alike of the need to consider before issuing a claim whether that claim can be supported by evidence and whether the Claimant’s evidence is capable of withstanding cross-examination. However, honest Claimants should of course have nothing to fear and findings such as those outlined in these cases remain the exception rather than the rule.

Nevertheless, it is certainly advisable to obtain written confirmation from Claimants at an early stage of proceedings that they have been informed of the risk of a fundamental dishonesty finding against them and that they are aware of the consequences should a finding be made.

In addition, and even for low value fast track matters, it is very often cost-effective to instruct Counsel to have a brief conference with the Claimant during which their evidence can be tested by a barrister experienced in personal injury advocacy. The clerks at Becket Chambers can arrange such conferences with a member of our civil team and if appropriate clients or solicitors can speak with Counsel by telephone or using video conferencing facilities.