Raising the bar for fundamental dishonesty: Jenkinson v Robertson [2022] EWHC 756

“A claim that is unreasonable is not necessarily dishonest; it may simply be misconceived. A claim that is exaggerated may be so because of the inclusion of losses that are wrongly believed to arise out of the accident in question. If a defendant wishes to establish that an exaggerated or unreasonable claim is fundamentally dishonest, then the basis on which that dishonesty arises or is alleged to arise ought to be made clear.” – Mr Justice Choudhury

This article is written from the perspective of presuming the reader already understands the well-established and extensive commentary on the legal doctrines of s57 of the Criminal Justice and Courts Act 2015 and CPR 44.16 fundamental dishonesty.

Background

The claimant had pursued a claim for personal injuries following a road traffic collision in 2013. Liability was not disputed. The defendant accepted causation of a number of relatively short-lived injuries. In issue was causation and quantum of a thoracic spine injury which was said to have led to the development of Schmorl's nodes with permanent symptoms and related disability.

In closing arguments at trial, the defendant successfully sought a finding of fundamental dishonesty, with the court dismissing his claim and ordering he pay the Defendant’s costs.  

The claimant, who was initially represented by solicitors, was self-represented by the time of the trial, appealed on three grounds: -

1. Procedural unfairness: the claimant was given insufficient notice of the intention to pursue a finding of fundamental dishonesty;
2. The burden of proof had been wrongly reversed requiring the claimant to prove he had not been fundamentally dishonest; and
3. There were errors in matters relied upon by the trial judge in finding fundamentally dishonesty.

The second ground was dismissed, as there was no evidence the judge had misapplied the burden of proof. However, the claimant was successful on the first and the third grounds – and the finding of fundamental dishonesty was resultantly set aside.

Procedural unfairness: What does (and does not) constitute sufficient notice

It is already well established, following Howlett v Davies [2017] EWCA Civ 1696, it is not a requirement for allegations of fundamental dishonesty to be pleaded in order to invoke such findings.

Moreover, following Mustard v Flower [2021] EWHC 846 (QB), contingent and provisional pleadings of fundamental dishonesty, such as those reserving the right to seek a finding of fundamental dishonesty at trial, are to be avoided. Fundamental dishonesty applications need not be foreshadowed in pleadings.

The key requirement extrapolated from Howlett and Mustard is, while fundamental dishonesty need not be pleaded, the claimant must be adequately put on notice and given sufficient opportunity to deal with such allegations. Ambush of claimants is not permitted.

In allowing the first ground, Mr Justice Choudhury found the Defendant’s pre-trial correspondence asserting that the claim was “exaggerated and unreasonable” was not sufficient to give the claimant proper warning of the allegation of fundamental dishonesty.

Further, a “vague and deliberately unparticularised allusion to the possibility of a s57 application” did not fulfil the requirement to give adequate notice. – particularly in light of the claimant’s request for further details and for the defendant to be "very clear here as to what it is you are alleging my act or acts of exaggeration or fundamental dishonesty are…"

Likewise, the defendant’s assertion in the counter-schedule the claimant’s special damages were “speculative and remote,” unsurprisingly fell far short of being considered notice of an allegation of fundamental dishonesty.

Of particular relevance to the issue of notice was the claimant was a litigant in person. Mr Justice Choudhury found: “where the claimant is a litigant in person, the Court will ordinarily seek to ensure that the allegation is clearly understood (usually by requiring it to be set out in writing) and that adequate time is afforded to the litigant in person to consider the defence.”

Errors in matters relied upon by the trial judge

Three features were relied upon in finding fundamental dishonesty:

1. The claimant had knowingly signed a statement of truth on the initial schedule of loss which he knew to be dishonest;
2. The claimant had attempted to manipulate the medical evidence by withholding an MRI findings report; and
3. The claimant had multiplied the size of his damages claim.

The first finding related to a claim in the initial schedule of loss for a sum of money in respect of assistance with the collection of rent. The schedule asserted the claimant had to pay somebody to assist with collection of rent, and he claimed a “reasonable rate” for this assistance. He conceded under cross-examination his son assisted him (and was not paid the specific amount claimed in the initial schedule of loss for this assistance).

At the time of the initial schedule of loss, the claimant had been represented by solicitors. There had been correspondence from those solicitors, setting out there had been confusion regarding this head of loss. While the claimant’s son was paid, the monies paid to him could not specifically be attributed to the rent collection activity and it had therefore been explained to the claimant this assistance was gratuitous and would be removed from the future schedule. It duly was.

The problem of lack of adequate notice of an allegation of fundamental dishonesty regarding the “rent collection” claim was illustrated: Had the claimant been on notice he may have required this correspondence be included in the trial bundle. It was not before the Judge when making his finding and Mr Justice Choudhury was critical of the defendant’s failure to include this crucial material or information in the trial bundle.

In light of the earlier explanation Justice Choudhury found: “An error in the pleaded case, particularly one which is corrected long before trial, is not the kind of mischief to which the s57 Jurisdiction is intended”

The second feature related to the claimant’s refusal to disclose a report of the findings of an MRI scan (the MRI scan itself having been disclosed but the report of the findings having been withheld until an application for specific disclosure had been made).

Under cross-examination the claimant admitted he had initially withheld the report because it: “did not suit him.”

It transpired the claimant had been advised by counsel at the time of withholding the report, it was subject to litigation privilege, hence his initial refusal to disclose it. An interlocutory application for specific disclosure followed and the court rejected the claim of privilege. Following the application, the report had been promptly disclosed.

It was discerned from the application skeleton argument the withholding of the report had been due to the claim of privilege – but again, this documentation was not within the trial bundle.

The claimant did not have advance notice this earlier refusal to disclose the report would be used to found an application for a finding of fundamental dishonesty and he was left dealing with the point ‘on the hoof’ at trial.

Ultimately the trial judge was not aware of the previously put reason for refusal of disclosure when being asked to make the fundamental dishonesty finding and Mr Justice Choudhury concluded: “if the Judge had had that complete picture before him, the conclusion as to fundamental dishonesty might have been different” and the finding of dishonesty on this point was: “plainly and manifestly wrong.”

Finally, in relation to multiplication of the damages claim, in the schedule of loss the claim was valued in excess of £500,000 – yet proceedings were initially issued up to £10,000, amended to £50,000, thereafter increased by court order. However, the trial judge had erred in his understanding of what sum the claim had been issued for – and the chronology of when the value was increased. Mr Justice Choudhury found these errors were sufficient, in and of themselves, to undermine any finding of dishonesty based thereon.

Mr Justice Choudhury found: “there are substantial errors in respect of each of the three matters relied upon in concluding that there was fundamental dishonesty. In my judgment, that conclusion was plainly wrong and cannot stand.”

Practice points for practitioners

It is an absolute requirement defendants give notice to claimants where allegations of fundamental dishonesty are to be advanced at trial. What will constitute adequate notice will vary case to case. Howlett remains good law – it is not necessary to formally plead fundamental dishonesty. The key requirement is notice and opportunity to respond to such allegations is given.

When dealing with litigants in person, defendants will need to go further than when dealing with represented parties. Defendants should be setting out, in writing wherever possible, and in the clearest possible terms, issues of fundamental dishonesty arise, the basis upon which these issues are alleged to arise, as well as setting out the potential ramifications of such a finding being made.

Generic, vague allusions or references to fundamental dishonesty or s57 should be avoided. These are unlikely to satisfy the notice requirement. Where a defendant has adequate evidence from the outset to positively plead fundamental dishonesty issues, it remains good practice to do so. Where matters come to light likely to lead to an allegation of fundamental dishonesty being made at trial, correspondence setting this out is recommended.

Adopting a ‘cards on the table’ approach remains important – and practitioners should not lose sight of their duty to assist the court. Defendants should ensure all relevant documents are before the trial judge, so they can make informed decisions – particularly those documents relevant to the allegations of dishonesty. In this regard, much more is expected of defendants when dealing with claimants who are not legally represented.

On a more general basis, there has perhaps been a contraction in terms of when the courts will make findings of fundamental dishonesty.

This judgment comes hot on the heels of the appeal judgment in Cojanu v Essex Partnership University NHS Trust [2022] EWHC 197 (QB), where another first instance finding of fundamental dishonesty was overturned with Mr Justice Richie finding: “incompetence, carelessness, negligence or mere omission by the lawyers” is not captured by s57, which “requires proof of the Claimant’s dishonesty not his lawyers’ lack of competence.”

Within Jenkinson, the suspicion was one of exaggeration, an issue faced not infrequently by practitioners. It is not a fait accompli for a defendant to demonstrate a claim is exaggerated. The cause of the exaggeration must be shown to be dishonest, as opposed to misconceived.  

Defendants need to take full, forensic consideration of the claims and losses presented. Careful analysis of what the claimant is saying, as opposed to the medical or legal arguments advanced by their experts or legal representatives, is needed in weighing up whether any exaggeration is dishonest such that fundamental dishonesty ought to be pursued as a defence.

Now, more than ever, defendants need to ensure they are selective as to the cases in which to advance allegation of fundamental dishonesty – and when such cases are identified, it is of utmost importance to ensure procedural requirements, such as giving sufficient notice, are followed.   

Rebecca Huyton is an associate, and Katie Nichols is a trainee solicitor, both with Plexus Law: plexuslaw.co.uk