“…it will be rare for a claim to be fundamentally dishonest without the Claimant also being fundamentally dishonest, although that might be a theoretical possibility, at least“
When Julian Knowles J made the above observation in London Organising Committee of the Olympic and Paralympic Games (in liquidation) v Sinfield  EWHC 501 (QB) it was almost inevitable that the “theoretical possibility” highlighted would arise sooner rather than later. In Michael v (1) IE & D Hurford Ltd T/A Rainbow (2) The National Farmers Union Mutual Insurance Society Ltd  EWHC 2318 (QB) that very possibility appears to have arisen. The case raises important issues about the application of s57(1)(b) Criminal Justice and Courts Act 2015 (‘the Act’), appeals in cases involving fundamental dishonesty, and cases where a solicitor is blamed for inconsistencies in evidence.
This case involved a low-level road traffic accident where liability had been admitted but the Defendant alleged that the claims for injury, hire and associated losses were fundamentally dishonest. The Judge at first instance found that the Claimant was honest despite a number of issues with inconsistencies in his evidence, including a claim being presented for eight sessions of physiotherapy when his oral evidence was that he had only undertaken one treatment session.
In broad terms the Claimant’s approach to difficult aspects of his case under cross-examination was to attribute responsibility to either a lack of understanding or, as is not infrequently the case, the fault of his solicitors. This combined with the trial Judge’s assessment of the Claimant as an honest witness led to the conclusion that whilst the claim may have been dishonest, the Claimant was not.
The Judge stated that “it does not seem to me that I could be confident that the Claimant really knew what the basis of the claim made on his behalf was.” Whilst perhaps a generous approach, the essence of the Judge’s analysis was that the inconsistencies and concerning aspects of the case appeared to be the fault of those behind the Claimant rather than the Claimant himself. Accordingly, the application by the Defendant to rely upon s57 of the Act to strike out the claim was refused. The Defendant appealed the decision.
Dishonesty – the Claimant or the Claim?
On appeal it was accepted that an application made under s57(1)(b) of the Act considered whether a Claimant has been fundamentally dishonest, whereas in CPR 44.16 (in relation to dis-applying QUOCS) the court considers whether the claim is fundamentally dishonest. It is understandable that these two different considerations will normally produce the same result, as alluded to by Julian Knowles J. However, Mrs Justice Stacey took the view that an honest Claimant bringing a dishonest claim may not be as rare as first thought, highlighting in particular the scenario where “the benefit of the disputed elements of a claim (such as physiotherapy treatment, vehicle storage and transportation and credit hire fees) are not paid to a Claimant for their benefit, but paid to the service provider, by a Claimant’s solicitor”.
It is therefore important for practitioners to consider at an early stage the potential permutations in cases where fundamental dishonesty is likely to be an issue. An understanding of the times in which s57 of the Act will need to be relied upon rather than simply reliance on CPR 44.16 to disapply QUOCS protection is key.
The practical question of how parties address concerns about those operating behind a Claimant is a difficult one. A number of passages from the judgment touch on this issue but are likely to provide more questions than answers.
“Where, as here, there was a genuine accident with genuine injuries and vehicle damage, but also aspects of the evidence which appear troubling or dishonest, a Defendant may, in order to prove dishonesty on the part of a Claimant him or herself, need to explore in evidence potential complicity or collusion by a Claimant with their solicitor. It may depend in part on the adequacy of the explanation for the inaccuracies provided by the Claimant. That did not happen in this case”
The suggestion that a Defendant with concerns about the honesty of a claim may need to explore in evidence the relationship between a Claimant and his solicitor is perhaps a surprising one. On a practical level it is unlikely that this issue will often arise until oral evidence is given at trial by the Claimant (as happened in this case) along the lines of “I told my solicitor xxx I don’t know why it isn’t included” or “I provided all the documents I was asked for” or “I have never been shown that document before”. How then are such issues to be investigated except during cross examination when the representatives are not present?
The second practical difficulty arises from the dual hurdles of proportionality and privilege. In cases such as this (where the damages were £3,624.18) case management decisions are unlikely to permit investigations into “complicity or collusion” with instructing solicitors. In addition, as with the wasted costs jurisdiction, the rules on privilege provide a strong shield to solicitors where questions of conduct arise.
It will have to be seen if this is the first step towards a new battleground where the legal representatives of allegedly dishonest Claimants become the targets of greater scrutiny and investigation. Certainly, in this case the court appears to be alive to the Claimant potentially being a tool used to bring related claims for the benefit of others.
“If the Defendant solicitors consider that potential dishonesty lies with a Claimant’s solicitor and not their client then surely their attention is better directed at the solicitor firms, rather than the hapless client who has instructed them?”
Certainly, whilst not applicable to all scenarios, CPR 44.16(2) contains potentially important provisions which provides an exception to the QUOCS provisions where inter alia there is a claim brought for the benefit of someone who is not the Claimant. This is likely to be an easier hurdle for Defendants to meet when seeking to recover costs particularly where credit hire is concerned. The author was involved in Waggett v Warchalowski  9 WLUK 290, which considered the use of these provisions.
Appealing Decisions on Dishonesty
The case also highlights the difficulty of appealing a factual finding as to the honesty of a Claimant on appeal. The court was clear on this point:
“However, where the trial judge has heard the evidence and has not concluded that the Claimant was dishonest, I direct myself that it would require a very clear case indeed for an appellate court effectively to overturn the trial judge’s conclusion in that respect and find that the Claimant was dishonest despite not having seen the witnesses give evidence.”
In particular, the Defendant’s main argument focussed on the fact that the Claimant had signed the list of documents which had included the physiotherapy invoice and documents. These documents, the Defendant said, must have been fabricated documents as the Claimant himself had confirmed (and the Judge accepted) that only one session of treatment was undertaken (rather than the 8 claimed and included on the invoice). However, the court rejected the argument that this of itself was sufficient to establish dishonesty on the Claimant’s part. The court concluded that “It is too bold a submission to assert that an inaccurate pleading or defective disclosure statement is synonymous with the respondent’s fundamental dishonesty. The test for dishonesty is that set out in Ivey cited above.”
It is therefore always important to remember that when considering appeals in cases of this nature, there is likely to be a significant hurdle in persuading an appeal court to overturn a decision based on hearing oral evidence. This is particularly the case where the credibility of the Claimant is in issue.