The journey following a finding of fundamental dishonesty

Kennedys has secured a finding of fundamental dishonesty and subsequent custodial sentence following committal proceedings against a demolition worker after it was established that he lied about the circumstances of an accident when pursuing a claim against his employer.

The claimant reported that he sustained his injuries whilst falling up some steps. Subsequently he changed his story, reporting that he had actually fallen 12 feet from a concealed hole in the floor of a building he was helping to demolish.

The claimant explained that the original version of events was requested by his employer to be given to the Health and Safety Executive (HSE), although this allegation was firmly denied by his employer. The claimant instructed orthopaedic, psychiatric and pain management experts and relied on three witnesses. The matter proceeded to a five day trial.

The judge compared the claimant’s version of events to “something out of a comic strip film or comic book”. After hearing evidence from medical experts, witnesses and reviewing the evidence, the judge was satisfied that the claimant’s evidence of the accident circumstances itself must be fundamentally dishonest. The judge found the accident happened falling up a set of steps and not falling into a concealed hole.

The outcome

The claimant’s case was dismissed in its entirety on the basis of fundamental dishonesty. The claimant lost his costs protection from Qualified One-Way Costs Shifting (QOCS) as an exception under Civil Procedure Rules (CPR) 44.16(1), and the defendant was awarded their costs on an indemnity basis.

Obtaining a finding of fundamental dishonesty – what happened next?

Following an application under Section 57 of the Criminal Justice and Courts Act 2015, the insurer of the defendant Aspen Insurance UK, and now claimant, commenced proceedings for contempt of court. Committal proceedings were served personally on the defendant who subsequently filed an Acknowledgment of Service confirming his intention to contest the proceedings. The claimant obtained leave in the High Court to proceed with contempt.

The proceedings were commenced prior to the overhaul of the rules. The new CPR 81 reduces the number of rules to comply with from 38 to 10 and removes two Practice Directions and a Practice Guidance. Useful guidance comes from CPR 81.4(2) which outlines 19 requirements as to what information/statements must be included in the application for leave to bring committal proceedings, such as the nature of the alleged contempt and a brief summary of the facts.

As the committal proceedings progressed, the defendant indicated that he would plead guilty. This step is important so far as sentencing is concerned, as once the basis of plea was submitted, the matter was subsequently listed for a sentencing hearing.

Sentencing powers

The sanctions available to the court for contempt proceedings range from making no order, imposing a fine up to £2,500 or imposing a sentence of imprisonment of up to two years. The party seeking punishment is limited to making submissions as to the circumstances, the consequences of the breach and ensuring the court’s attention is drawn to all the relevant authorities in support of committal proceedings. 

A custodial sentence is a measure of last resort and it is important to keep in mind that a suspended prison sentence is equally still a prison sentence, and should not be looked at as an inferior sanction. When determining the sanction to be imposed, the court will consider mitigating factors which may include:

• Acknowledgement/admission of a breach
• An admission or appreciation of the seriousness of the breach
• A genuine expression of remorse
• A sincere apology to the court.

If a contemnor, even belatedly, demonstrates a genuine insight into the seriousness of their prior conduct and its unlawfulness, then the court may well be able to conclude that the contemnor has ‘learned their lesson’ and consequently make no order.

Applying to this case, the defendant deliberately made a false claim that his supervisor made up a false account of the accident. He continued with his version of events, reporting dishonest accounts to individual medical practitioners with regard to his level of daily activities to inflate the value of this claim, which ultimately required six medical experts to attend trial. The defendant, however, did accept his wrongdoing but this was unfortunately too little too late. The defendant received a three month custodial sentence effective immediately.

There is substantial case law to demonstrate the court’s power to impose a custodial sentence with the ultimate message from such cases being that those who make dishonest claims, if caught, should expect to go to prison.

Following the recent overhaul of CPR Part 81 for contempt, it is key to note that in the recent case Oliver v Shaikh [2020] the judge referenced the recent changes and specifically commented that these changes to the CPR have not affected previous authorities as to the approach to sentencing that the court should adopt. The court exercised its sentencing powers and the defendant in this case received a prison sentence for 16 months. 

In summary

It is unlikely insurers will want to pursue all claimant’s against whom there has been a finding of fundamental dishonesty as this process is often long, relatively expensive and the prospects of recovering costs are often poor. However, in all cases where there is a finding of fundamental dishonesty, the claimant faces a real risk that insurers then issue committal proceedings for contempt of court. In those circumstances, the claimant may receive a custodial sentence.