Lies told in court "quite rightly" do not lead to penalties, Lord Justice Ward says

In an extraordinary comment on our justice system, Lord Justice Ward said: 'Lies are told in litigation every day up and down the country and quite rightly do not lead to a penalty being imposed in respect of them.'

Ward LJ was speaking at the Court of Appeal, giving judgment in a case where a claimant had greatly exaggerated her personal injury claim.

The court heard in Widlake v BAA [2009] EWCA Civ 1256 that the claimant was employed as a security guard at Stansted when she fell down a staircase because of a loose rider beneath the top step.

She suffered bruising to her back, legs and elbow and BAA accepted liability. Initially she claimed £150,000 for loss of earnings as a security guard for the rest of her life.

Having carried out secret video surveillance, the defendants made a payment into court of £4,500. Ward LJ said the experts in the case agreed that the surveillance video 'did not show any evidence of overt disability'.

At the High Court trial in November 2008, Widlake reduced her claim for loss of earnings to £24,000. Her claim for pain and suffering remained at £11,000.

However, Judge Seymour QC said that Widlake had 'deliberately concealed' her previous history of back pain from her medical experts in the hope of increasing the amount of compensation.

As a result, he awarded her only £3,500 for pain and suffering and just over £2,000 for loss of earnings. Accusing her of setting out to abuse the judicial process, he refused to award her the costs she would normally receive for beating the payment in, and instead ordered that she pay the defendant's costs.

At the Court of Appeal, Lord Justice Ward said: 'In addition to looking at it in terms of costs consequences, the court is entitled in an appropriate case to say that the misconduct is so egregious that a penalty should be imposed upon the offending party.

'One can, therefore, deprive a party of costs by way of punitive sanction. Given the judge's findings of dishonesty in this case, that may be appropriate here.

'I sound a word of caution: lies are told in litigation every day up and down the country and quite rightly do not lead to a penalty being imposed in respect of them.

'There is a considerable difference between a concocted claim and an exaggerated claim and judges must be astute to measure how reprehensible the conduct is.'

Ward LJ said defendants were used to coping with 'false or exaggerated claims' and had a defence in the form of the part 36 payment into court.

He said that the fact the defendant did not make a high enough offer counted against it.

He added that the fact the claimant made no attempt to negotiate counted against it.

He cited the judgment of Lady Justice Smith in Shah v Ul-Haq [2009] EWCA Civ 542 (see Solicitors Journal 152/23 16 June 2009) which was decided in June 2009, where it was held that a genuine claim should not be struck out even where the claimant had made a fraudulent associated claim.

Lord Justice Ward concluded in Widlake that the starting point should be that the claimant should get her costs because she beat the payment in. An order for costs against the claimant was less justified where the defendant failed to make a 'proper' part 36 offer.

'The claimant's dishonesty must be penalised,' he said. 'The claimant's failure to negotiate a claim which was clearly capable of being settled must also be recognised. When I balance those factors, and attempt to do justice to both parties and to be fair to them, I conclude that the right order in this case is that there be no order for costs.'

Lady Justice Smith and Lord Justice Wilson agreed.