If a claimant in a personal injury case does not win their case, the basic rule is that they will not have to pay their opponents legal costs because they are protected by the provisions of Civil Procedure Rules Part 44.13(1) which sets out the qualified one way costs shifting rules. However this protection is lost if the claimant is found by the court to have been ‘fundamentally dishonest’ with potential serious financial and personal consequences for the claimant and the possible involvement of relevant authorities . A court should therefore not come to that finding without good reason.
We are beginning to have clarification from the courts as to how this provision will be interpreted. Defendant insurers are pushing the limits of the provision.
In the case of Meadows -v- La Tasca Restaurants Limited EW Misc B28 (CC) (16 June 2016) Mrs Meadows claimed she had tripped and fallen in a restaurant. The accident was said to have occurred about 2 years before the trial of the case. The Judge who first heard the case decided that the claimant and her witness had been so inconsistent in their evidence that he was entitled to say that she had been fundamentally dishonest in bringing the case at all. Essentially he found that as he was ‘not satisfied’ that the accident took place because the evidence of the claimant and her witness was ‘so riddled with inconsistencies’ and he could not ‘rely on anything they tell me in relation to the circumstances giving rise to the claim’ the claim had been fabricated on a balance of probabilities.
The claimant appealed on the basis that merely being inconsistent in one’s evidence/recollection, does not mean that a claim was therefore fundamentally dishonest. In this instance that would mean a finding that the claimant had made the whole thing up. There had been no direct evidence before the Judge that she had actually made it up, eg CCTV evidence or other evidence explicitly showing it had not happened or had not happened as claimed.
Having found that the claimant had been fundamentally dishonest she lost her protection from having to pay costs if she lost and was ordered to pay the defendant insurers costs of £7210. She appealed the decision.
The Judge hearing the appeal summarised the main issue as follows: was the Court entitled to find that, on the basis of a finding that the claimant and her witness had been inconsistent in various respects, the accident never happened at all and that she had therefore lied fundamentally and should suffer the consequences of that and lose any costs protection.
The claimant argued that there were actually three choices open to the original Judge in deciding the case:
- She should win or
- She should lose her case and that she had been fundamentally dishonest and should pay the costs of her opponent or
- She should lose, but that she had just failed to prove her case on a balance of probabilities without being fundamentally dishonest
She argued that the Judge should have considered choosing the third, very common option, rather than going much further and saying that she had lied about the accident without any definite evidence of that. She argued that the fact that there were inconsistencies did not mean she had lied about whether there had been an accident at all or that it had happened as she said.
As the barrister for the defendant pointed out on the appeal, it is heavy burden for the claimant to show that the original Judge was wrong about the facts having heard the evidence of the witnesses in person and gauged their credibility.
On appeal the court noted that the more serious the allegation is and therefore the less likely to be true, in this case that the claimant was a fraud, the stronger the evidence needed to show that this was so on a balance of probabilities. The appeal court noted that the Judge had not considered, as he should have done, why someone of previous good character like the claimant in this case would concoct a claim worth a few thousand pounds. The Judge had not asked himself what the inherent improbabilities were that she would do that.
On appeal the court found that whereas the Judge was entitled to say that the claimant had not made out her case on the evidence before him and therefore the claim should fail, his ‘conclusion that the claim was fundamentally dishonest falls well outside the ambit of reasonable judicial decision making’. The fact that there were inconsistencies in her evidence and that of her witness did not entitle the Judge to conclude that the claim had been fabricated and thus was ‘fundamentally dishonest’, although it did of course entitle him to say that she had not proved her claim and that it must fail. The defendant was ordered to pay the costs of the appeal and the claimant was not required to pay the defendants legal costs of the original