On 12 June 2017, the claimant, Jason Roberts was involved in a motor vehicle accident when a vehicle driven by the defendant negligently drove into the side of his taxi, a Mercedes E250 causing damage.
The claimant commenced proceedings against the defendant whose insurers were joined into the proceedings as the second defendant. The claimant sought damages of £10,400 for the net total loss of his vehicle based on its pre-accident value of £13,000 less salvage value of £2,600. He also claimed for hire, storage and also had a minor injury claim. He signed a statement of truth in support of his schedule of special damages.
In a witness statement dated 6 March 2018, the claimant stated that he had used the cash from the salvage of his car towards hiring another taxi. However, following investigation by the defendant's insurers, it became apparent that on 5 March 2018 (one day prior to his statement), an MOT Certificate had been obtained for the written off vehicle and that the claimant had advertised the sale of the vehicle for £7,000.
Once this information had come to light, and not long before the trial, the claimant provided another statement where he stated that his first statement had been accurate "save for one small detail". He expanded on this by saying that he had sold the vehicle to his brother-in-law who runs a car repair business but due to various delays it was agreed in September 2017 that the vehicle would be returned to the claimant. The latter then purchased parts and engaged his brother-in-law to repair it. The statement was vague as to detail and there was no documentary evidence supporting the various transactions that took place, the parts purchased and the hire that took place.
However, it was clear that the credit hire charges he was claiming covered the period 13 July to 7 September 2017 amounting to £11,500. The claimant claimed to be impecunious but did not provide sufficient proof of this as it became apparent that there were two other credit card accounts which he had failed to disclose. There was also a storage invoice for £570 from his brother-in-law's business which was dated 20 March 2017 (i.e. prior to the accident!) and stated that it related to a period of storage between 12 July and 28 July 2017 (during the period that the brother-in-law had purportedly taken ownership of the vehicle).
The case went to trial on 27 August 2019 before Recorder Kelbrick. The claimant was cross-examined at length on all the discrepancies and his apparent dishonesty, and he did eventually admit that the first statement had been false. Counsel for the defendant sought a finding of fundamental dishonesty in terms of s.57 of the Criminal Justice and Courts Act 2015 ("CJCA") (which would result in the entire claim being struck out).
First instance decision
The Recorder gave a very short judgment. He made a finding of liability in the claimant's favour. On the issue of the damages to be awarded, he found that the claimant had failed to prove his claim for the total loss of his vehicle. He thought that the invoice for the storage was 'curious' and determined that the claimant had not satisfied him that it was a true document. He did not allow any of the credit hire claim because the claimant had failed to prove that he was impecunious which would have entitled him to the commercial rates claimed, as he had failed to disclose a number of credit card accounts.
Despite having been referred to the appropriate authority in relation to fundamental dishonesty, the judge made no comment other than to say (in respect of the total loss claim) that "It is right that he [the claimant] has accepted that he was dishonest in part when making his first statement, but I do observe that he did not persist with that dishonesty. Whether or not this was because he had been, to use Mr McKeown's words - 'flushed out' or whether it was not, nevertheless he did not persist with it, and did not persist with it in oral cross-examination today."
The Recorder awarded a total sum of £4,400 to the claimant together with interest and costs.
The second defendant was granted permission to appeal and Mr Justice Jay gave judgment.
He considered the first statement and the fact that the claimant's mother had died one day before it was signed; the possibility existed that he may not have read what he signed. However, it contained an unequivocally and fundamentally different account in relation to the salvage monies and made no reference to the MOT having been obtained one day earlier (on the same date as his mother's passing). The statement was prepared by his solicitors on the basis of his instructions, and he would have known that.
In considering the various elements of the claimant's claim, the judge concluded that the Recorder was entitled to come to the conclusion that the storage document was not false ("generous though it might have been"). The hire claim was more complex and again the judge was entitled to conclude that the claimant was not deliberately suppressing the bank statement documentation. However, as regards the claim for the pre-accident value of £10,400, it was clear that the claimant had been dishonest.
The Recorder had been referred to the leading authorities on the issue of fundamental dishonesty and it was submitted that this was a case where s.57 CJCA should be applied. Whilst the Recorder briefly considered this it would appear that he discarded it on the basis that it was not material because the claimant had not persisted with the dishonesty. The appeal judge rejected this reasoning as being inadequate.
He quoted from the relevant section and pointed out that on application by the defendant, if the court is satisfied that the claimant has been fundamentally dishonest, the court is then required to dismiss the primary claim unless satisfied that the claimant would suffer substantial injustice. Reference was made to the judgment in Howlett v Davies & Anor (2017) CA which states that if the dishonesty goes to the root of the whole claim or a substantial part of it, then it would be a fundamentally dishonest claim. The judge also referred to LOCOG v Sinfield (2018) QB (which we reviewed here) where Julian Knowles J held that a claimant should be found to be fundamentally dishonest within the meaning of s.57 CJCA if he has acted dishonestly to the extent that this has substantially affected the presentation of his case either in terms of liability or quantum, in a way which potentially adversely affects the defendant's interests. The term 'substantially affects' is aimed to have the same meaning as 'going to the root/heart' of the matter.
The appeal judge went on to say that the Recorder had 'ducked' the issue of whether the claimant did persist with his dishonesty and whether he had actually been 'flushed out' as appears to have been the case as there would not have been a second witness statement otherwise. The real question was whether the claimant had been fundamentally dishonest and not whether he had persisted in that dishonesty.
The judge then considered whether the dishonest aspect of the claimant's claim rendered it fundamentally dishonest. Upon considering the criteria laid down in LOCOG, the judge concluded that what is required is a global assessment in light of the claim as advanced in its entirety but also in view of the saliency and importance of the particular claim under consideration. In applying this 'holistic approach', the judge was satisfied that the dishonesty went to the root of the claim and was fundamental. The effect of such a finding was as the Act intended which was that even where other claims may be valid, if a party advances a claim which is dishonest and it is significant and substantial, the Court should not be slow to find that the stringent criterion of s.57 had been fulfilled. The correct test is not one of persistence, as that is not reflected in the language of s.57 of the Criminal Justice and Courts Act.
Here, the claimant had been "fundamentally dishonest" in advancing a false claim in his schedule of loss and in his first statement.
The appeal was therefore allowed.
This case re-affirms the existing case law. However, it clarifies how s.57 should be applied in cases where a claimant has made a dishonest statement and then seeks to correct that in a second statement. It is clear that the second statement will not exonerate the claimant. Furthermore, this case reinforces the holistic approach that should be taken in assessing a claim which has some but not all dishonest component parts. Taken with the decision in Jet 2 Holidays v Hughes (2019) CA, which we analysed here, the courts have now confirmed that any false statement, given at any stage, can be used by a defendant as proof of dishonesty.
For further information about this article, or about the operation of fundamental dishonesty in QOCS or section 57, please contact Stratos Gatzouris on +44 (0)7714 775284, or by email at firstname.lastname@example.org