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fundamental dishonesty

14 March 2016
Section 57 of the Criminal Justice and Courts Act 2015 provides that in a claim for damages in respect of personal injury, where the court finds that the claimant is entitled to damages, but where, upon an application by the defendant for the dismissal of the claim, 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, the court must dismiss the primary claim “unless it is satisfied that the Claimant would suffer substantial injustice if the claim were dismissed.”

Rule 44.16 of the CPR also provides for an exception to the general rule on qualified one-way costs shifting (QOCS) such that orders for costs can be enforced against the claimant where the claim is found on the balance of probabilities to be ‘fundamentally dishonest’.

Unfortunately however, there is no statutory definition of ‘fundamental dishonesty’ and despite various commentators offering their views as to what the phrase means, we have been without any real guidance as to when it will apply. Some commentators appear to accept that a bit of a ‘try-on’ by claimants is par for the course thereby distinguishing between ‘run-of-the-mill’ dishonesty and dishonesty which is more ‘fundamental’ which goes to the heart of the claim. In Gosling v (1) Hailo (2) Screwfix Direct 2014, the court suggesting that the phrase, fundamental dishonesty, could be distinguished from collateral dishonesty. In practice courts have been reluctant to remove the QOCS protection afforded to claimants.

James v Diamanttek Ltd 2016 is the first case to be decided that applied the test of fundamental dishonesty, and arose from a claim for noise induced hearing loss (NIHL).

Mr James was employed by Diamanttek as a diamond driller and then a plant operator between 2003 and 2013. The job required the claimant to work in a noisy environment and the case turned on a dispute as to whether the employer, Diamanttek, provided the claimant with ear protection and whether use of the same was enforced. The claimant’s case was that he had not received ear protection and he had not received any training or warnings as to the potential harm of working in a noisy environment. This was disputed by Diamanttek who were able to adduce evidence that the claimant had been provided with personal protective equipment (PPE) throughout the whole course of his employment.

The first instance trial was heard before Deputy District Judge Kilbane who dismissed the claimant’s claim in light of the defendant’s evidence but refused the defendant’s application to remove the claimant’s QOCS protection. The judge was unwilling to rule that the claimant had been fundamentally dishonest despite finding that the claimant had not been “telling the truth today”. The judge however found that the claimant’s dishonesty fell short of making him a ‘dishonest person.’ 

The defendant appealed the decision. The Trial Judge had made an assessment of the claimant’s ‘overall character’ rather than applying the rule 44.16(1) test, namely whether on the balance of probabilities the claimant was found to be fundamentally dishonest.

The appeal was heard before His Honour Judge Gregory who agreed with the defendant/appellant that the rule 44.16(1) test had indeed been met. The Appeal Court was satisfied that the claimant’s allegation that he had not been provided with or required to wear ear protection was one of the principal assertions of fact upon which the claimant’s clam was based and therefore was ‘fundamental’ to the case. The Trial Judge had found that the claimant had lied about that issue. Accordingly the test was satisfied and the court ordered that the QOCS protection be removed and the defendant be entitled to enforce a costs order against the claimant. 

The Diamanttek case is an excellent result for defendants and, whilst clearly, each case will turn on its facts, the case should send a significant warning to dishonest claimant’s. The claimant’s dishonesty here went to the thrust of the claimant’s allegations but there will still be cases where the dishonesty is slightly more on the periphery and further decisions will be awaited to provide more guidance as to where the boundaries lie.

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The content on this page is provided for the purposes of general interest and information. It contains only brief summaries of aspects of the subject matter and does not provide comprehensive statements of the law. It does not constitute legal advice and does not provide a substitute for it.

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