The defendant appealed against a decision from a district judge who held that the claimant's personal injury claim was fundamentally dishonest, entitling the defendant to the costs of defending the personal injury claim. However, he also held that the claimant was entitled to receive other, related special damages together with fixed costs, albeit that the defendant's costs could be offset against the damages and costs awarded to the claimant. Importantly the judge had found that s.57 did not apply to other elements of claim where the personal injury element had been dismissed.
On appeal, it was held that s.57 did apply and that the entire claim could be struck out.
Section 57 Criminal Justice and Courts Act 2015
As this case turned on the interpretation of s.57, it is important to mention the relevant clauses that were considered:
(1) This section applies where, in proceedings on a claim for damages in respect of personal injury ("the primary claim")-
(a) the court finds that the claimant is entitled to damages in respect of the claim, but
(b) on an application by the defendant for the dismissal of the claim under this section, 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.
(2) The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed; and
(3) The duty under subsection (2) includes the dismissal of any element of the primary claim in respect of which the claimant has not been dishonest.
The issue for consideration in this case was whether the reference to "the claim" in s.57(1)(a) above was in fact a reference to the personal injury element of the claim rather than the claim as a whole.
The claim arose out of a road traffic accident in 2016 in London when the defendant drove into the rear of the claimant's vehicle. The claimant claimed damages for personal injuries, repairs, credit hire and miscellaneous expenses.
The defendant admitted that she was in breach of her duty of care but denied that the claimant could have been injured, as the forces involved in the impact could not have resulted in the personal injury complained of. Before the matter reached trial, the defendant had paid for the claimant's repairs totalling £1,185.81 but continued to challenge the other items of special damage and the personal injury claim.
First instance decision
At trial, the District Judge, preferring the defendant's account of the accident, found that there was no (or should not have been any) displacement of a person inside the claimant's vehicle as a result of the impact. The claimant had not been credible, and had been fundamentally dishonest in respect of his personal injury claim. However, he found that the claimant was entitled to repair costs and certain hire charges, and he was not prepared to strike out the entire claim.
Consequently, the District Judge awarded the claimant damages totalling £3,009.81(comprising £1,185.81 for repair charges and £1,824 for hire charges) together with fixed costs in the sum of £6,070.35. He also ordered that the defendant's costs, summarily assessed in the sum of £7,000 in relation to the claim for damages for personal injury, could be enforced and set off against the awarded damages and costs.
The District Judge interpreted s.57 as only being applicable if he made a finding that the claimant was entitled to some damages for personal injury, in other words for cases where there is a genuine claim for personal injury which has been exaggerated.
The defendant was given permission to appeal on a) the application of s.57 and b) whether the claimant was entitled to fixed costs.
The defendant appealed on 3 grounds stating that the District Judge was wrong in law in:
a) finding that s.57 did not apply, in particular in finding that it did not relate to the whole of the claim;
b) not striking out the claim; and/or
c) in awarding the claimant fixed recoverable costs under CPR Rule 45.
His Honour Judge Saunders heard the appeal at which the claimant was not present or represented. He determined that if he allowed the appeal in respect of ground a) above, he would not need to consider the further grounds.
The wording of s.57 was therefore considered. Despite remarking that the wording of the section was not satisfactory or consistent, particularly with regard to the interchanging of the words/expression "primary claim" and "claim", it would be a "bizarre outcome" if claimants would be in a worse position where they exaggerated their claims than where they had completely lied about being injured.
Effectively, s.57(1) states that these provisions apply to claims where there is a personal injury component but that does not mean that if there is no personal injury, then it does not apply. Thus the reference in s.57(1)(a) to "the claim" refers to the entire claim and not just the personal injury claim. The judge noted that a personal injury claim in such cases is "wrapped up" with other related claims including repairs, credit hire etc. In his view it was important that no distinction should be made for the purposes of s.57 between claims for general damages and other claims for special damages. He also found that both the personal injury element of the claim and the special damages had been struck out in previously reported cases including, LOCOG v Sinfield (2018) and Pinkus v Direct Line (2018).
To reinforce this, the judge also referred to s.57(3) which states that "any element of the primary claim" in respect of which the claimant has not been dishonest must be dismissed in the event of a finding of fundamental dishonesty under the section.
Finally the judge referred to Hansard when this provision of the Bill was passing through the House of Lords in July 2014. Lord Faulks who was responsible for introducing the Bill had made it clear that "the government simply do not believe thatpeople who behave in a fundamentally dishonest way… by grossly exaggerating their own claim or colluding should be allowed to benefit by getting compensation despite their deceit. [S.57] seeks to strengthen the law so that dismissal of the entire claim should become the norm in such cases."
Thus the judge found that s.57 did apply to the whole of the claim and to treat it differently was an error in law. He therefore did not need to consider the second and third grounds of appeal.
This case, whilst only at County Court level, is undoubtedly a correct interpretation of the wording of s.57 and is an interpretation that has been applied in other cases. However, it reinforces, particularly in the context of the smaller low velocity impact cases, that if there is a finding that the claimant has not been displaced within the vehicle and has also been fundamentally dishonest in pursuing his/her claim, then every element of the claim can be struck out.
It is interesting to note that the judge did not go on in his judgment to complete the exercise when assessing what will be payable following dismissal of the entire claim. In terms of s.57(4) and (5), the court's order must record the amount of damages that the court would have awarded but for the dismissal of the entire claim and then deduct that amount from the defendant's awarded costs.
Nevertheless, this is a welcome decision on the meaning and interpretation of s.57.
For further information about this article or about the operation of fundamental dishonesty in s.57 or QOCS, please contact Stratos Gatzouris on 0161 604 1841, or by email at email@example.com
You can find all of our previous articles on fundamental dishonesty here Fundamental Dishonesty | DWF Insurance