The Dekagram: 13th May 2024

Last week brought the news that the Australian airline Qantas and the Australian Competition and Consumer Commission have agreed to resolve their dispute over cancelled flights by asking the court to impose a $100 million fine, together with an undertaking by the airline to pay affected consumers $20 million in compensation. The airline was accused of misleading passengers by advertising for sale flights which it had already cancelled, and by failing to notify passengers that their flights had been cancelled until two or more days after the decision had been taken. These practices were said by the ACCC to be in breach of Australian consumer law. It is interesting to speculate as to whether the UK Competition and Markets Authority, which is about to be awarded new powers by way of the Digital Markets, Competition and Consumers Act, is keeping an eye on its antipodean brethren and readying itself for the fray within this jurisdiction – watch this space.

Mehmood (by his Litigation Friend, Mrs Asma Islam, pending determination by the court) v Harry Mayor [2024] EWHC 1057 (KB)

This week, another case involving allegations of fundamental dishonesty has landed on our desks. Rather than being a case by which such allegations were proved or disproved at trial, Mehmood (by his Litigation Friend, Mrs Asma Islam, pending determination by the court) v Harry Mayor [2024] EWHC 1057 (KB) concerned whether an interim payment application could succeed where fundamental dishonesty had been raised by a defendant in their Amended Defence.

Factual background

By way of a brief background, the Claimant was riding a motorcycle in January 2019 when he was involved in a collision with the Defendant’s vehicle. Primary liability was admitted with contributory negligence, causation and quantum remaining in dispute. The Claimant suffered a significant brain injury, which was classified as being in the Moderate to Severe range of the Mayo classification, as well as a number of orthopaedic and soft tissue injuries. It was claimed that he lacked capacity, thus he brought his claim by a Litigation Friend. The issue of capacity was disputed to the extent that the Defendant had pleaded fundamental dishonesty in their Amended Defence, relying on medical and surveillance evidence. A trial on the preliminary issue of capacity had been adjourned to the trial judge to be determined at trial.

The Claimant made an application in May 2021 for retrospective approval of an interim payment of £10,000 made in August 2019 and for a further interim payment in the sum of £75,000. The interim payment was intended to be used for rehabilitation and additional treatment. Whilst the application had initially been adjourned, a later order of the court enabled the interim payment application to proceed before Master Fontaine. Notably, the Defendant did not contend that the two limbs of Cobham Hire Services v Eeles [2009] EWCA Civ 204 were not satisfied. Rather, the Defendant’s position was that the Claimant had not satisfied the pre-condition needed to enable the court to make an order for an interim payment set out in CPR 25.7(1)(a), namely that “the Defendant… had admitted liability to pay damages or some other sum of money to the Claimant”, as the Defendant averred the Claimant had been fundamentally dishonest pursuant to section 57 of the Criminal Justices and Courts Act 2015.

Judgment

Master Fontaine noted the surveillance footage had been put to the experts for their respective conclusions, which notably differed as to whether the Claimant had been truthful in his accounts to them at interview. However, the issue of whether the Claimant was exaggerating the effect of his injuries and whether he was fundamentally dishonest in so doing could only be resolved at trial. Even if section 57(1) was satisfied, there were different options available to the trial judge as to what the consequences of the finding should be (for example, if the court found that the Claimant would suffer substantial injustice).  

Master Fontaine agreed with the Defendant that the requirements of CPR 25.7(1)(a) were not satisfied in this claim. By virtue of the plea of fundamental dishonesty, the Defendant had denied liability to “pay damages” to the Claimant and sought by way of their Amended Defence dismissal of the claim. That, in Master Fontaine’s view, was the short answer to the application. It was noted that there was no Reply to the Amended Defence denying the allegations of fundamental dishonesty, nor any application to strike out that part of the Amended Defence or for summary judgment. Further, there was no witness evidence disputing the interpretation of the surveillance evidence. Consequently, the application was dismissed and the previous interim payment could not be approved.

Discussion

This is an interesting judgment, which all personal injury practitioners should be aware of. It is increasingly common to see allegations of fundamental dishonesty pleaded in defences. However, in this application, those allegations were compounded by the surveillance evidence and the commentary by the medical experts on that evidence, such that the Claimant will now not receive the funds for rehabilitation by way of an interim payment.

One wonders if the Claimant had obtained any witness evidence in advance of the application, or drafted a Reply to the Amended Defence, whether it would have actually made any difference. I suspect in this particular case it would not have done. This was not a simple question of whether the experts disagreed about the seriousness of an injury – there was evidence of potential dishonesty before the court, which had been commented on by the various experts.

About the author

Ranked by the Legal 500 2021, 2022 and 2023 and by Chambers and Partners 2023 as a Rising Star, Dominique Smith was called in 2016 and has a busy practice in travel law. She undertakes work for both Claimants and Defendants in package travel claims, contractual disputes, and other related claims. Dominique has a particular interest in cross-border clinical negligence claims and regularly appears in the Coroners’ Courts.