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Fundamental Dishonesty – the price to be paid for deception

12 March 2021
Vicki Swanton considers the recent decision in Iddon v Warner [2021] where the claimant victim of accepted clinical negligence was required to repay interim damages and costs following the dismissal of her claim due to fundamentally dishonesty.

Introduction

Fundamental dishonesty creates 'excitement' in personal injury litigation as it exposes a claimant to costs liability. The starting point for identifying if there is fundamental dishonesty in a personal injury (primary) claim is Section 57 of the Criminal Justice and Courts Act 2015 which provides that:

  • where the court finds that a claimant is entitled to damages, but 
  • also finds (following an application by the defendant) on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary or a related claim, it must dismiss the entire claim
  • unless it is satisfied that the claimant would suffer substantial injustice.

The bar is high, slight exaggerations or minor inaccuracies will not qualify. The Iddon case provides some useful guidance as to when an application for fundamental dishonesty should be made.

Background to the case

Mrs Iddon sued her GP (Dr Warner) for missing her diagnosis of breast cancer, resulting in the need for significant treatment that with a timely diagnosis (11 months earlier) would have been unnecessary. Those additional treatments, she argued, caused her debilitating chronic post-surgical pain, incapacity and generated a schedule of loss amounting to £941,000. Her GP admitted liability, judgment was entered and interim payments of £100,000 damages and £100,000 costs were made. However, following information obtained from social media posts, which showed Mrs Iddon taking part in strenuous sporting activities, the Defendant applied for dismissal of the case on the grounds of fundamental dishonesty, which HHJ Sephton QC subsequently granted.  

Judicial Assessment of fundamental dishonesty

First, the court must consider the actual state of the individual's knowledge or belief and second, whether conduct was dishonest by applying the objective standards of ordinary decent people. The next consideration is whether or not, if dishonesty is found, it is 'fundamental' ie. it goes to the heart of the claim. The burden of proof is on the alleging party, the standard of proof required is on the balance of probabilities.

In this case Mrs Iddon signed the statements of truth to her amended particulars of claim and schedule and represented to her experts that her previous sporting activities had been significantly curtailed by her chronic pain. In fact, Facebook posts and information on Google demonstrated that she was 'running and swimming like she did before,' completing 10km runs and a 1 mile swim in open water.  In witness statements in response Mrs Iddon, her husband and friend denied such participation in sporting activities. An amended statement was subsequently served by the Mrs Iddon accepting that she had participated in 8 sporting events but explaining that her previous lack of openness was because she had been taking cannabis oil beforehand, which she feared was a criminal offence. 

After considering all the evidence and oral testimony of Mrs Iddon HHJ Sephton QC found that the Claimant:

  • did not suffer from chronic pain of any significance and in fact trained and participated in endurance sporting events, 
  • misled her experts, 
  • had provided false statements of truth in her pleadings and multiple witness statements
  • recruited her husband and friend to provide false witness statements

In conclusion, her actions were a deliberate attempt to mislead the Defendant and the court as to the extent of her injuries and were dishonest applying the standards of ordinary decent people. Further that dishonesty was fundamental on the basis:

  • it went to the heart of the claim
  • it substantially affected the presentation of her case
  • it inflated the value of her case from £70,000 to +£900,000.

 

Evaluation of substantial injustice

On behalf of the Claimant it was submitted that as Mrs Iddon had used her interim payment to buy a house, which she would have to sell if her claim was dismissed, such an order should not be made as it would inflict substantial injustice.

HHJ Sephton QC disagreed, citing the 'toxic effects' of dishonest claimants upon the administration of justice and all those working within it. He accepted that the impact of Section 57 of the Criminal Justice and Courts Act 2015 was 'frankly punitive in nature' but with good reason as it needed to address the 'evils' of dealing with dishonest claims. It was consequently right that in this case, the Claimant didn't just lose those damages that she should never have been awarded but in fact, be subject to an order to meet the costs of the Defendant (offset against the damages she would have been awarded) which may well mean that she does not, in fact, receive a penny.

Conclusions

This case has an important message for all those involved in litigation. For Claimant advisors it highlights the importance of emphasising to clients the significance of signing statements of truth and testing their clients when taking statements. For Defendants, it reinforces when and what type of investigations into Claimants are warranted, how they are deployed and if there is sufficient evidence to make an application for a finding of fundamental dishonesty. The most damning elements for this Claimant were that she had actively conspired with her husband and friend to support her lies and furthermore, did not 'come clean' even when she was found out. This case demonstrates that a litigant will be punished when circumstances warrant it, which must ultimately promote confidence in the administration of justice.

If you require any further information, please contact Vicki Swanton- Healthcare Partner.

Further Reading