Are Scots almost one step closer to finding out what the future holds for fundamental dishonesty?

Date published

20/03/2018

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With the increasing number of fundamental dishonesty authorities south of the border, there is no such luxury in Scotland. Grubb v Finlay [2017], which is being appealed this week, was a unique case where the pursuer’s claimed damages of £500,000 were reduced to just over £7,000. Despite evidence of impersonation and of lying about why his employment was terminated, along with driving convictions when the pursuer claimed he couldn’t drive etc., his conduct was not considered to amount to fundamental dishonesty.

Unlike the English system, fundamental dishonesty is not formalised in legislation in Scotland and there is a lack of clarity as to what is considered to be fraudulent behaviour in the Civil Litigation (Expenses and Group Proceedings) (Scotland) Bill. Therefore against this background, we look forward to receiving the Inner House (Scotland’s Appeal Court) decision in Grubb v Finlay. It was one of the first reported attempts to have a case dismissed on the grounds of fundamental dishonesty in Scotland since Shetland Sea Farms Ltd v Assuranceforeningen Skuld in 2001. Lord Kinclaven concluded that such an order was within his powers, however, he was not persuaded to make it in this particular case and wished to hear detailed witness evidence.

Lord Kinclaven issued his judgment in May 2017 finding unsurprisingly that Mr Grubb had not been entirely credible and reliable but had suffered some injury limited to 12 months. He was only awarded £7,321.32 (£6,000 for his personal injury) and Lord Kinclaven chose to penalise the pursuer by way of costs. Usually costs would follow success but commenting on the parties’ conduct and the pursuer’s significant lack of candour, he awarded costs two-thirds in favour of the defender.

The judgment shows how difficult it has been to prove that a pursuer’s conduct is fundamentally dishonest in Scotland.

In his review of legal costs in Scotland, Sheriff Principal Taylor recognised the need to guard against the risk of fraudulent personal injury claims particularly given the introduction of QOCS. However, the fundamental dishonesty exception seen in England and Wales has not made its way into the Civil Litigation Bill so an authoritative decision by Scotland’s appeal judges is one step closer to finding out what the future holds for fundamental dishonesty in Scotland.