When a Fundamental Dishonesty Allegation Goes Wrong

APIL is running a campaign to stop abuse of the rules on fundamental dishonesty by some defendants.  Ben Rodgers has a recent tale from the coalface.

Tom was a ground worker.  In 2018, he was driving his employer’s flatbed van when the Defendant’s van drove into the back of it.  He immediately felt stiff and sore in his back.  His GP signed him off work.  He saw a neurosurgeon, who told him it was unlikely he would return to groundwork, and referred him to pain management.  He now found himself at home all day, every day.  He became depressed.  He gained weight.  He had four young children and a supportive partner.  He had been accustomed, for years, to going out every day, doing physical work and earning to support his family.

Tom had long had an interest in cars.  Stuck at home, he stumbled upon auto locksmithing.  He thought that, maybe, despite his dyslexia, he might be able to do this as a job.  His father, wanting to help his depressed son, helped him buy some equipment.  He practised on his own car, went on a training course and friended auto locksmiths on Facebook.  By late 2020 he felt he could make a go of it as an auto locksmith.  He bought a van.  In May 2021 he started work, as a self-employed trainee, for a local auto locksmith.

The claim was issued in September 2021.  The Defendant’s motor insurer served a defence which stated they had “concerns about the bona fides of the claims for special damages” and that they would apply to dismiss the claim if the court found that Tom had exaggerated his claim.  They believed they had caught Tom lying: he said he had not started working as a locksmith until May 2021; yet he had served receipts for auto locksmith equipment bought in 2019.

In May 2024, they served surveillance footage which had been taken during late 2020, 2022 and 2023.  It showed Tom working on cars.  Hardly surprising, given that he started work as an auto locksmith in May 2021.

Each party had an orthopaedic expert.  The experts watched the surveillance footage.  They agreed that the collision had caused Tom a 5-7 year acceleration of constitutional lower back pain.  They agreed that, because of this, he could no longer work as a groundworker.

The Defendant served a final counter-schedule for trial, stating that Tom was “put to strict proof that his claim for special damages is bona fide.”  Over 19 pages, the counter-schedule enumerated alleged inconsistencies in the medical evidence and the claim for special damages.  It did not, however, allege that anything Tom had said or done was dishonest.  A month later, the Defendant served 3,500 pages of printouts from Facebook.

Tom was terrified of going to trial.  He made a very low Part 36 offer, to try to bail out.  The Defendant gave him the choice of discontinuing, or trial.  Tom knew he had told the truth about his injuries and losses. 

The Defendant’s skeleton argument for trial stated, before hearing evidence, that the Defendant sought a finding of fundamental dishonesty.  They believed that the defence and counter-schedule, which had made a conditional allegation of fundamental dishonesty (“if the court finds…”) was fair warning.  The Defendant cross-examined Tom for 3 days.  Tom, a 16-stone groundworker, broke down in tears repeatedly during his ordeal.

His Honour Judge Murdoch held that Tom had been honest about his claim, and that his claim was honest.  He awarded Tom damages in excess of his Part 36 offer, and went further: he awarded indemnity costs from May 2024, when the Defendant had served the surveillance evidence.  From that point on, the Defendant should have reappraised whether fundamental dishonesty was going to be a real runner in this case.  Further, the Defendant should have been more upfront about what the allegations of fundamental dishonesty were going to be.  His Honour Judge Murdoch commented that the authorities on fundamental dishonesty, including Howlett v. Davies [2017] EWCA Civ 1696, are clear: it does not need to be pleaded, but the trial needs to be fair. 

If, before the trial starts, a defendant has evidence which in its opinion justifies a finding of dishonesty, it can say so in its statement of case.  Choosing not to risks disaster for the defendant – and unnecessary torment for the claimant.