In England and Wales, under s57 of the Criminal Justice and Courts Act 2017, a court must dismiss, in its entirety, any claim in which the claimant is held to have acted with 'fundamental dishonesty'. However, the recently published High Court of Appeal judgment of Elgamal v Westminster City Council  EWHC 2510 has confirmed that a claimant may not be 'fundamentally dishonest' despite exaggerating the impact of their injury.
For a summary of the provisions on fraudulent claims both north and south of the border, see our previous blog.
Elgamal v Westminster City Council
The claimant, a 22-year-old 'free-runner', brought a claim following an accident in which he performed a 'flip', landed awkwardly and injured his left knee at the defendant's gym in London. The trial judge awarded damages of £125,321.33, taking into account a 35% deduction for contributory negligence (which was agreed pre-litigation by the parties).
The defendant led a fundamental dishonesty argument, concerning the alleged exaggeration by the claimant of his symptoms, including the manifestation of a limp to medical experts. Video surveillance footage, taken on the same day as an examination of the claimant by the defendant's medical expert in which the claimant had presented with a noticeable limp, was led by the defendant. This footage showed the claimant was capable of walking normally, using a staircase and using public transport, contradicting how the claimant had presented his injuries to medical experts and professionals. The claimant suggested, in response to the surveillance footage, that he had made "major efforts to appear 'normal' in terms of his presentation to the world" and that they did not reflect his actual condition.
In his judgment, despite finding that the claimant had exaggerated the ongoing effects of his injury, the trial judge found the claimant clearly believed "he is disabled to a greater extent than I have found". He therefore held that the claimant had not been fundamentally dishonest in relation to his claim, and that accordingly the provisions of s57 were inapplicable.
On appeal, Mr Justice Jacobs found that the trial judge's findings had been sound.
In the judgment, Justice Jacobs carried out an in-depth consideration of the law of fundamental dishonesty in England and Wales noting that the statutory requirement of "fundamental dishonesty" requires separate consideration of two questions: whether there was dishonesty, and whether it was fundamental.
Considering first the question of dishonesty, Justice Jacobs was reluctant to interfere with the conclusions of the trial judge who had had the benefit of hearing the claimant give lengthy evidence. Justice Jacobs therefore considered it would be inappropriate for him to reject the view formed by the trial judge that in the claimant's subjective belief he was not lying about the impact of the injury. On this basis, the appeal judge held that he was unable to find that the claimant had been dishonest.
However, Justice Jacobs went further, noting that even if his conclusion as to dishonesty was wrong, he did not consider that there was any fundamental dishonesty in the case. He stated that in cases such as this where there was a "very serious base injury" the question as to whether exaggeration reaches the level of fundamental dishonesty was more nuanced and where an injury was more serious the mere existence of exaggeration may not be enough to bring the claim into the territory of fundamental dishonesty. Ultimately, Justice Jacobs found the alleged exaggerations did not have an actual or potential impact on the claims advanced, enough to be considered 'fundamental' to the claim.
Justice Jacobs also upheld the trial judge's decision to apply the usual cost consequences where there had been a failure to beat an unaccepted Part 36 offer, despite the defendant submitting that indemnity costs should not have been awarded in light of the claimant's exaggerations.
This judgment reinforces the position that in England and Wales, fundamental dishonesty is to be dealt with on a case-by-case basis, looking at (1) whether the claimant has actually been dishonest and, if so, (2) whether this dishonesty is fundamental and goes to the 'heart of the claim'.