Jack Macaulay considers 2 new high court authorities that demonstrate the willingness of the courts to dismiss PI claims for s.57 fundamental dishonesty.
Two new cases, Sinfield v LOCOG  EWHC 51 (QB) and Razumas v MoJ  EWHC 215 (QB), show the willingness of the courts to exercise the power in s.57 of the Criminal Justice and Courts Act 2015 to dismiss personal injury claims where there has been fundamental dishonesty, and provide a new formulation of the test for what dishonesty might be considered fundamental.
Section 57 of the Criminal Justice and Courts Act 2015 provides:
(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.
(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 trigger for s.57 is the claimant’s “fundamental dishonesty”, a concept familiar as one of the exceptions to qualified one-way costs shifting.
Until now the standard definition of fundamental dishonesty was that given by HHJ Moloney in Gosling v Hailo (2014) County Court at Cambridge:
“45. …a claimant should not be exposed to costs liability merely because he is shown to have been dishonest as to some collateral matter or perhaps as to some minor, self-contained head of damage. If, on the other hand, the dishonesty went to the root of either the whole of his claim or a substantial part of his claim, then it appears to me that it would be a fundamentally dishonest claim: a claim which depended as to a substantial or important part of itself upon dishonesty.”
That definition was approved as representing “common sense” by the Court of Appeal in Howlett v Davies  EWCA Civ 1696.
Sinfield v LOCOG
Mr Sinfield was a volunteer at the 2012 London Olympics. On 9 September 2012 he fell on his left arm and fractured his wrist. Liability for the accident was admitted.
In his Schedule of Loss Mr Sinfield alleged that the accident had left him unable to look after his large garden, and he had employed a gardener as a result. He disclosed invoices from the gardener in support of this head of loss. The total value of the gardening claim was just under £14,000, representing a little over a quarter of the entire damages claim. This part of the claim turned out to be false: Mr Sinfield had always employed a gardener, and the accident made no difference to this. Further, he had fabricated the invoices himself, having never been provided with them by the gardener.
The first instance trial judge reached the remarkably generous conclusion that Mr Sinfield had simply been “muddled” in his presentation of the claim. The creation of the invoices, though dishonest, was simply an attempt to conceal the earlier muddle, was not fundamentally dishonest, and did not contaminate the entire claim. He held that it would cause substantial injustice to dismiss the entire claim, because the dishonesty related to a peripheral part of the claim, the remainder of which was genuine.
On appeal Knowles J reversed the finding that the gardening claim was simply the result of a muddle, and held that it was indeed fundamentally dishonest. He rejected the suggestion that it would cause substantial injustice to deprive Mr Sinfield of his entire claim: substantial injustice must mean something more than the loss of the genuine part of the claim, or s.57(3) would be superfluous. The claim was therefore dismissed.
Of note was the novel formulation of the test for fundamental dishonesty:
“62. In my judgment, a claimant should be found to be fundamentally dishonest within the meaning of s.57(1)(b) if the defendant proves on a balance of probabilities that the claimant has acted dishonestly in relation to the primary claim and/or a related claim (as defined in s.57(8)), and that he has thus substantially affected the presentation of his case, either in respects of liability or quantum, in a way which potentially adversely affected the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation. Dishonesty is to be judged according to the test set out by the Supreme Court in Ivey v Genting Casinos Limited (t/a Crockfords Club), supra.
63.By using the formulation ‘substantially affects’ I am intending to convey the same idea as the expressions ‘going to the root’ or ‘going to the heart’ of the claim. By potentially affecting the defendant’s liability in a significant way ‘in the context of the particular facts and circumstances of the litigation’ I mean (for example) that a dishonest claim for special damages of £9000 in a claim worth £10 000 in its entirety should be judged to significantly affect the defendant’s interests, notwithstanding that the defendant may be a multi-billion pound insurer to whom £9000 is a trivial sum.” [emphasis added]
Razumas v Ministry of Justice
Mr Razumas spent much of 2010-2013 in and out of prison. While in prison he developed a lump on his leg, which turned out to be cancerous. Multiple opportunities to diagnose this were missed; by the time the cancer was identified the only option was amputation of the leg. Unfortunately the cancer returned and his prognosis was, at the time of trial, uncertain.
Much of the judgment of Cockerill J was taken up with analysis of the various causes of action pleaded against the Defendant, and consideration of whether it – as opposed to the assorted NHS Primary Care Trusts and individual doctors responsible for the failures of diagnosis – was liable to Mr Razumas. On these issues the Defendant was, for practical purposes, entirely successful.
Cockerill J could have stopped there, but she went on to consider another aspect of the case. Mr Razumas alleged that, in summer 2012, while out of prison, he was given an appointment for surgery at hospital. He said that when he was arrested and returned to prison in July of that year he was prevented from attending this appointment. This allegation served two purposes: first, as an independent ground of negligence, and second, as an answer to the Defendant’s point that, by failing to obtain treatment for the lump while at liberty, he broke the chain of causation flowing from any earlier negligence on its part.
Cockerill J rejected Mr Razumas’s factual case on this point, and held that no appointment had been arranged. Mr Razumas had instead been lying low, having returned to criminality. Adopting the test from Sinfield she held that he had been fundamentally dishonest in this respect, and that his entire claim (had he succeeded on the other arguments) would have failed for this reason.
These cases are noteworthy for three reasons: first, the novel formulation of the test for fundamental dishonesty set out in Sinfield and adopted in Razumas; second, for confirmation that “substantial injustice” under s.57(2) must mean something more than the loss of the genuine part of the claim, and third, as illustrations of the breadth of cases covered by s.57.
Knowles J held that dishonesty was fundamental when it “substantially affected the presentation of the case”. Although he said that he was intending to convey the same idea as HHJ Moloney’s description of fundamental dishonesty as dishonesty “going to the root” of a case, his formulation may catch more cases. The trial process will inevitably focus on the most vulnerable parts of a claimant’s case; often this will be where the defendant thinks the claimant can be caught lying. Lies might, in this sense, substantially affect the presentation of the case even if it might be harder to characterise them as “going to the root” of an issue. It remains to be seen whether the test in Sinfield will catch on; it was adopted in Razumas, but HHJ Moloney’s words still bear the imprimatur bestowed by the Court of Appeal in Howlett.
Both cases confirm that “substantial injustice” must mean something more than the loss of the genuine part of the claim. This had already been the conclusion of Recorder Hatfield QC in the case of Stanton v Hunter (2017) County Court at Liverpool; it would be surprising if future cases took a different view.
Sinfield was a “plain vanilla” example of the sort of cases s.57 was intended to deal with: the claimant had a legitimate claim, but exaggerated it, and so lost everything. Razumas, in contrast, shows the breadth of s.57: lies in relation to only one of a number of potential routes to a finding of liability could result in the loss of the entire claim, even if another allegation of negligence was unanswerable, and quantum uncontroversial.
Both cases should serve as salutary reminders of the importance of honesty and straightforwardness in personal injury claims.