Fundamental dishonesty: simple questions – complicated answers

The outcome in this case demonstrates that even in relatively modest value claims, insurers are entirely right to take a robust stance to root out fraudulent, dishonest and exaggerated claims. 

Kennedys were instructed by Admiral Insurance, the defendant’s insurer. James Marwick of St John’s Chambers dealt with the trial and appeal.

Background

The claim related to a road traffic accident which occurred on 10 November 2015. Mr Cornish, a qualified physiotherapist and a very experienced cyclist who competed in high level events, was knocked from his bicycle and pursued a claim for compensation in relation to the injuries he sustained and associated losses. As part of the claim for special damages, the claimant relied upon a 'quote' from a specialist cycle shop setting out the value of the bicycle that the claimant was riding at the time of the accident (£4,000) together with various additional equipment added to the bicycle, some clothing and lights.

Liability was not in dispute but Admiral had some serious concerns about the nature and extent of the claim being pursued. Prior to litigation, Admiral obtained a claimant profile report which showed that the claimant had a fairly significant social media footprint. This included posts in relation to his activities regarding elite cycling relatively soon after the accident which appeared inconsistent with the nature and extent of the limitations and ongoing symptoms complained of to the medico-legal expert. 

Following service of the claimant’s witness evidence, the claimant profile report was disclosed. Settlement negotiations were entered into but an agreement could not be reached. The matter therefore proceeded to trial on 24 April 2020 before District Judge Field in the Weston-Super-Mare County Court. As the claimant was living in France and due to the COVID-19 restrictions in place at the time, the trial was heard remotely by video link. 

There was a prolonged line of questioning in relation to the claimant’s alleged ownership of the bicycle with answers that appeared vague and increasingly inconsistent. Having started by saying that he had purchased the bicycle partially with a loan from his partner the claimant eventually admitted (with the Judge joining in with the questioning) that he had not in fact paid any money for the bike  It had been provided to him by the manufacturer on the basis that he would publicise it by using it in events/competitions.

Decision at first instance

In a reserved written Judgment, District Judge Field concluded that the claimant had “knowingly and intentionally misled the court” in relation to his evidence.  He went on to say that:

In relation to general damages, District Judge Field stated: "I cannot give the benefit of the doubt on the impact or severity of those symptoms to the claimant in circumstances where his initial reporting to medical professionals appears to lack candour. Similarly, I do not accept that the accident had a significant impact upon sleep for the first few weeks".

District Judge Field went on to assess general damages in the total value of £6,000. He allowed the claim for bicycle clothing in the sum of £530 but did not allow anything further in relation to the bicycle or the alleged upgrades. Defendant’s Counsel had made submissions to the Judge at the conclusion of the trial in relation to fundamental dishonesty. District Judge Field stated in his judgment that the application was not without merit. However, he went on to conclude that:

“The core of the claim, the personal injury element, has been successful and was not substantially exaggerated, despite my concerns about initial candour with experts in that respect also. On balance, and by relatively modest margins, I do not consider the matter to have been subject of fundamental dishonesty going to the heart of the claim. I do not dismiss the claim made”.

Appeal

The decision was appealed by Admiral and the matter went before His Honour Judge Ralton in the Bristol County Court. Following submissions by Counsel for both parties, the Judge found that the appeal should be allowed on the primary ground that the dishonesty in relation to the special damages claim was fundamental. The Judge accepted the submission that there was sustained dishonesty in relation to the pursuit of damages for “my bicycle” when the claimant knew at all times that he did not own the bike and had lied about this in his oral evidence. 

His Honour Judge Ralton found that District Judge Field had erred in the finding that the dishonesty was not fundamental and that this was borne out by the Judge’s own Judgment in which he had found that dishonesty related to a sizeable proportion of the claim. His Honour Judge Ralton found that on the straightforward application of Section 57 of the Criminal Justice and Courts Act 2015 and the relevant authorities, the dishonesty went to the root of the claim.

The consequential order was that the claim was struck out pursuant to Section 57. The claimant was ordered to pay the defendant costs of both the action and appeal with an offset for the damages that he would have recovered had the claim not been dismissed. In the circumstances, the claimant now owes the defendant insurer a significant sum of money.

Comment

The decision by District Judge Field at first instance was a surprising one, having found dishonesty to the extent of special damages in excess of £5,000 it seemed a fairly obvious conclusion that this was “fundamental”. The position was however, rectified on appeal. A defendant should always scrutinise the claims that are being made but that is particularly so for larger elements of special damages that are lacking in documentary evidence.