By now we all know the requirements that must be fulfilled for the court to conclude that a claimant has been fundamentally dishonest. In short, in line with section 57 of the Criminal Justice and Courts Act 2015, the court must; (a) find that the claimant was entitled to damages in respect of the claim, (b) on application by the defendant for the dismissal of the claim, be satisfied that the claimant has been fundamentally dishonest, and (c) dismiss the primary claim unless it is satisfied that the claimant would suffer a substantial injustice if the claim were dismissed.
So far, there has not been any statutory or court guidance in relation to when the claimant may suffer a substantial injustice if the claim were dismissed. We all remember LOCOG v Sinfield where Knowles J confirmed judges would “know it when they see it”.
We know that the mere fact that the claimant will no longer receive damages due to a finding of FD is not sufficient for the claimant to argue substantial injustice (see Knowles J in LOCOG para 65). This was reiterated in our recent case of Woodger v Hallas  EWHC 1561 (QB) in which the claimant alleged not to be able to work but was seen in surveillance working in a garage. In the first instance, the judge held that the claimant had been fundamentally dishonest but refused to dismiss the claim as it would be “substantially unjust to do so” on the basis that elements of the claim were untouched by the claimant’s dishonesty. On appeal, Knowles J confirmed “…it seems to be plain that substantial injustice must mean more than the mere fact that the claimant will lose his damages for those heads of claim that are not tainted with dishonesty… What will generally be required is some substantial injustice arising as a consequence of the loss of those damages.” The claim was therefore dismissed.
It has been argued that if the claimant suffered severe and life changing injuries, then any finding of FD would cause substantial injustice. However, in the case of Razamus v MOJ  EWHC 215 (QB) this was dismissed. Here, the claimant (a prisoner) brought a claim for clinical negligence, alleging that the prison authorities failed to ensure he attended an appointment for surgery to his leg. It was suggested that, had they done so, he would not have required an amputation. However it was held that there was no such earlier appointment and the claimant had not sought any medical treatment as claimed. Despite the serious injuries sustained, it was held by Cockerill J that this was still not sufficient to convey substantial injustice.
It has also been argued that a failure to award the claimant any damages due to a finding of FD causing financial hardship, was sufficient to convey substantial injustice. This argument was dismissed in Darnley v Cornish  16th July, Bristol County Court by HHJ Ralton who, in response to counsel’s arguments that the claimant would suffer financial hardship without his damages, stated that this was “woefully insufficient information to begin to make out cases of substantial injustice.”
One interesting argument was raised in Iddon v Warner  EWHC 587 (QB). Breach of duty was admitted in a case involving a misdiagnosis of breast cancer. The claimant obtained an interim payment which she used to pay for her home, and was undergoing various therapies. She claimed to have severe ongoing chronic pain resulting in severe disability but was seen taking part in various runs and sporting events. It was argued that she would have to sell her home if the finding of FD was enforced. The judge however, held that this was still insufficient to amount to substantial injustice, stating that “the culpability and extent of her dishonesty far outweighs any injustice to her in dismissing her claim.”
In Patel v Arriva Midlands Ltd  EWHC 1216 (QB), the claimant was a protected party who was being assisted in the litigation by his litigation friend. Not only was the claimant fundamentally dishonest, but the litigation friend had participated in the dishonesty. The claimant attempted to argue that, as they were a protected party, dismissal of the claim would cause substantial injustice and they should not be penalised for the conduct of the litigation friend. However, the court held that the dishonesty of the litigation friend could be attributed to the clamant, and therefore the claim should be dismissed.
Various situations have been mooted which may trigger the substantial injustice defence.
The claimant’s wife brought a claim following an RTA in which her husband sadly died. The claim was brought on behalf of her and her three children (two over 18, one under 18) as dependents, covering loss of services (including care, DIY, gardening) and dependency (including gifts for each child totalling around £600 pa and contributions to the household income.) Following internet investigations, it was found that the deceased and his wife had separated some months before the accident and that the deceased was living with another woman. Further, the deceased’s wife was pregnant with another man’s child. Allegations of FD were raised on the basis that the deceased’s wife had intentionally exaggerated the claim (her two adult children assisted by providing signed statements which confirmed the losses). However the young child (who was aged around 4 at the time of the accident) was not involved in the dishonesty. He had a legitimate claim against the defendant which was brought by his mother.
In this situation, it seems likely that the court would apply the case of Patel and would conclude that the dishonesty of the claimant was sufficient to taint the claim. However, in this scenario, the dependent child would be able to issue in their own name.
The claimant was told in the week before the accident that he was to be made redundant. In the accident, he was rendered paraplegic, required a great deal of future care and could no longer work. The claimant mislead the court in relation to his earnings, claiming a salary of around £50,000 would have been earned, when in fact it would have been much lower.
In this scenario, the claim is also likely to be dismissed. The court would probably apply Razamus and conclude that the FD outweighs the life changing injuries.
The claimant was severely injured in an RTA. A family member, who was not involved in the accident, brings a bogus claim for injuries, claiming that they were involved. The claimant assists with the lie.
It is likely that this is also sufficient to amount to FD. The court would probably apply Woodger here and conclude that the mere fact the claimant would not receive damages would be insufficient to trigger the substantial injustice defence. Lord Faulks also confirmed that this would not amount to substantial injustice in the House of Lords debate on 22/10/2014.
So it seems we are no closer to having any clarity in relation to the circumstances when the claimant may be held to be fundamentally dishonest, but still awarded damages. Indeed, that seems like the just approach - one cannot lie and expect to be compensated.
Inevitably, there will be further litigation on this point. The areas which most likely lend themselves to a finding of substantial injustice being awarded by the court, are cases pleaded at a significant value or involving minors. We will need to keep a keen eye on this in the future. We are still of the view that a finding of FD shouldn’t apply in the scenarios outlined in this article, but further guidance may be provided by the court in due course.
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