08/12/2020

A key ingredient for fundamental dishonesty: the need for trial

In this blog we take a look at a recent Scottish case where the defender advanced a fundamental dishonesty argument.

In the recent civil Scottish case of Susan Keenan v EUI Limited [2020], which took place at Scotland’s highest civil court, the Pursuer (claimant) sought more than £1m for damages arising out of a road traffic accident.

The Pursuer claimed to have suffered multiple injuries which deemed her unfit for work. The Defenders (defendants) questioned the extent and nature of the injury. Prior to litigation they made a time limited offer to settle the case. The Pursuer continued to raise proceedings and the Defender sought to rely upon surveillance evidence, together with their own medical evidence which, in their opinion, supported their defence that the Pursuer was dishonest.

The case ultimately settled by Tender (Part 36 offer) at £43,500; the same amount as the pre-litigation offer. The Defender argued the Pursuer was dishonest, the litigation was unnecessary and costs should be awarded in favour of the Defender. It was accepted that the Pursuer was injured as a result of the accident but, the extent of which was contested.

The court was reluctant to accept the Pursuer acted dishonestly. The matter had not proceeded to trial and the evidence was untested, as a result, the usual rules ought to apply with costs following acceptance of the offer.

This decision offers a glimmer of guidance as to what ingredients might be required to successfully argue fundamental dishonesty in Scotland. The Scottish courts have a very wide discretion, yet even with arguably supportive evidence they are unlikely to find the Pursuer acted dishonestly without a full trial and the opportunity to assess the credibility and reliability of a Pursuer in person. Even then, the test remains very high and costs remain at the crux of these types of arguments.

The case begs the question; had it ran to trial and the court been faced with a dishonest Pursuer, would we have another “good, yet exaggerated claim” (Grubb v Findley) or could the court have been persuaded to go a step further? On both hypothesis we are confident the court would have modified the Pursuer’s costs.

Judges south of the border are reluctant to make a finding of fundamental dishonesty on the papers, usually requiring a hearing or at least the opportunity for the Pursuer to attend.

Although, they are more minded to make findings of fundamental dishonesty after hearing the evidence than the Scottish courts.

If courts north and south of the border were faced with the same set of facts and circumstances after hearing the evidence, it is unlikely there would be the same findings in both courts. Perhaps the gap will start to be bridged once QOCS (qualified one way cost shifting) come into play in Scotland.

In any event, it would be fair to state that in both jurisdictions, the courts are likely to be unanimous in requiring the Pursuer’s evidence to be tested at trial; a key ingredient, if asking a court to make a finding of fundamental dishonesty.

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