Success at Trial: Securing a finding of Fundamental Dishonesty and Indemnity Costs Recovery

Clyde & Co successfully defended a claim at trial on behalf of a leading insurance company, achieving a finding of fundamental dishonesty against a claimant who exaggerated the impact of a three-month soft tissue injury, claiming he had significant symptoms that persisted for over seven years.

The claimant sustained an injury to his left shoulder during his employment. While primary liability was admitted prior to litigation, the claimant pursued proceedings, seeking over £450,000 for pain, suffering, and loss of amenity (PSLA), loss of earnings, and care. He alleged the shoulder injury was severely debilitating, leaving him unable to use his left arm for basic daily tasks. This assertion was contradicted by extensive NHS investigations and treatment, which found no physical cause for his complaints.

Medical Evidence

The claimant was assessed by an orthopedic expert instructed by the defendant, who reported that the claimant claimed total incapacity in his left arm due to constant pain. However, the expert observed no physical abnormalities, such as deformity or muscle wasting, and noted that the muscle bulk in the claimant’s left arm was well-preserved, an inconsistency for someone claiming long-term immobility. The expert concluded that the claimant had sustained only a three-month soft tissue injury.

Conversely, the claimant’s own orthopedic expert initially diagnosed a frozen shoulder and recommended a referral to a pain clinic, suggesting the symptoms could become chronic. However, during a joint expert discussion, he conceded that he had not reviewed recent investigations and acknowledged that the claimant’s restricted movement appeared exaggerated. He ultimately agreed that a three-to-six-month recovery period was reasonable.

Further undermining the claimant’s case, an earlier orthopedic report commissioned by his former solicitors raised concerns about conscious exaggeration. Medical records repeatedly noted that the claimant’s restricted movements appeared to be voluntary.

Legal Framework

The case relied on Section 57 of the Criminal Justice and Courts Act 2015, which mandates the dismissal of a personal injury claim in its entirety if the court finds, on the defendant’s application, that the claimant has been fundamentally dishonest, unless such dismissal would cause the claimant substantial injustice. Additionally, under CPR 44.16, the usual Qualified One-Way Costs Shifting (QOCS) rule can be set aside, enabling the defendant to recover costs if fundamental dishonesty is established.

The interpretation of “fundamental” and “dishonesty” is guided by key authorities, including London Organising Committee of the Olympic and Paralympic Games v Sinfield [2018] EWHC 51 (QB) and Ivey v Genting Casino (UK) Ltd [2017] UKSC 67.

The Defendant’s Strategy

The defence was amended to plead fundamental dishonesty, which was accepted by the court. Despite an offer made by the defendant to account for some causation, the claimant rejected it and instead served a final schedule of loss claiming over £200,000 for care and lost earnings, unsupported by evidence.

At the two-day trial, Miss Pascale Hicks of Deans Court Chambers, acting for the defendant, meticulously dissected the claimant’s evidence, exposing numerous inconsistencies in his account. During cross-examination, the claimant persisted in alleging that his treating and medico-legal experts were incorrect and maintained he could not use his left arm.

The defendant’s orthopedic expert provided oral evidence, ruling out psychiatric causes and concluding that conscious exaggeration was the only credible explanation for the claimant’s complaints.

Judgment

In his judgment, the judge found that the claimant had failed to demonstrate that dismissal of the claim would result in substantial injustice, as required under Section 57. He described the claimant’s position as untenable, noting that he had disagreed with his own clinicians and experts. The judge found the claimant’s testimony unreliable, highlighting his selective memory and evasive responses under cross-examination.

The judge concluded that the claimant’s dishonesty was fundamental, as it undermined the core of his case. Consequently, the entire claim was dismissed under Section 57. The court also disapplied QOCS protections under CPR 44.16, ordering the claimant to pay the defendant’s costs on an indemnity basis from the expiry of the defendant’s Part 36 offer.

Conclusion

This case highlights the robust application of Section 57 of the Criminal Justice and Courts Act 2015 and CPR 44.16 to deter dishonest claims and protect defendants from undue financial exposure. Clyde & Co’s meticulous preparation and counsel’s effective advocacy secured a just outcome for their client, demonstrating the importance of thoroughly challenging unsubstantiated claims.

This case was handled by Mandeep Chahal-Dhillon who is a Senior Associate in the Complex Injury and Large Loss team at Clyde and Co.

Counsel for the defendant was Pascale Hicks of Deans Court Chambers.