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Stephen Croston

Stephen Croston

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Client Alert: James v Diamanttek Ltd

Client Alerts12/02/2016

In a case run by Stephen Croston, partner in Keoghs' Disease Team, His Honour Judge Gregory found on appeal that a claimant's claim was "fundamentally dishonest" and granted permission for a costs order to be enforced against the claimant in line with CPR 44.16, overturning the effect of qualified one-way costs shifting (QOCS).

Keoghs and Douglas Cooper of counsel were instructed to act for the defendant by its insurers, Allianz.

The case

The claim was for noise induced hearing loss and the contentious issue at trial was whether or not the claimant was provided with and wore hearing protection.

The claimant's claim was dismissed at trial, Deputy District Judge Kilbane rejecting his evidence about his use of hearing protection and finding that "the claimant has not been telling the truth here today".

As the Judge had been unwilling to deal with the issue of whether the claim was fundamentally dishonest so as to remove the claimant's QOCS protection on the day, the matter came back before her on 16th October 2015 when she applied what the defendant's representatives considered to be an incorrect test.

She found that the claimant had not been telling the truth but that his dishonesty fell short of making him a "dishonest person".

She appeared to have carried out an assessment of the claimant's overall character rather than addressing the correct test pursuant to rule 44.16(1) which merely requires that "the claim is found on the balance of probabilities to be fundamentally dishonest."

She refused the application for the removal of QOCS protection for the claimant.

The appeal

This decision was considered to be wrong and Allianz provided instructions to appeal. The appeal was heard on 8th February 2016.

Citing the previous county court decisions in Gosling v Hailo / Screwfix and Zimi v London Central Bus Company Ltd but approaching the issue from a slightly different perspective, His Honour Judge Gregory overturned Deputy District Judge Kilbane's judgment and gave the defendant permission to enforce the costs order against the claimant.

The allegation that the claimant was not provided with and required to wear hearing protection was one of the principal assertions of fact upon which he had based his claim and so was "fundamental".

The claimant was found to have lied about this issue - the Deputy District Judge’s finding that he was "not telling the truth" could not be construed in any other way. The test for "fundamental dishonesty" was satisfied.

The implications

The appeal judge's interpretation of CPR 44.16 and application of the rules to an industrial disease claim should be of comfort to insurers.

Following the first hearing, the claimant's solicitors had written an article in the Law Society Gazette, applauding the judge's decision and expressing concern that arguments of fundamental dishonesty had "reared their ugly head" in the industrial disease field where a defendant’s evidence was preferred to that of the claimant.

The article ignored the fact that the claimant (who had alleged throughout that he had not been provided with, educated about or worn hearing protection) had conceded at trial that ‘he had hearing protection 100% of the time that he wore 100% of the time.’

Their suggestion that disease claims should in some way be exempt from the rules can only be regarded as puzzling.

The judgment on appeal should reassure insurers and employers and send a clear message to claimants that the courts are willing to penalise individuals who bring dishonest claims, in whatever field this may be.