Fundamental dishonesty, substantial injustice and the blame game : Matthew Shaw v Gillian Wilde [2024] EWHC 1660 (KB)
The availability of the ‘substantial injustice’ shield potentially available to a fundamentally dishonest claimant was again thrust into the spotlight by HHJ Sephton KC in this recent case.
For the unitiated, s.57 of the Criminal Justice & Courts Act 2015 (‘CJCA 2015’) provides as follows:
Personal injury claims: cases of fundamental dishonesty
(1)This section applies where, in proceedings on a claim for damages in respect of personal injury (“the primary claim”)—
(a)the court finds that the claimant is entitled to damages in respect of the claim, but
(b)on an application by the defendant for the dismissal of the claim under this section, the court is satisfied on the balance of probabilities that the claimant has been fundamentally dishonest in relation to the primary claim or a related claim.
(2)The court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed.
(3)The duty under subsection (2) includes the dismissal of any element of the primary claim in respect of which the claimant has not been dishonest.
The facts are as follows. C claimed damages following a road traffic accident for which he was not at fault and as a result of which he sustained serious orthopaedic polytrauma. C alleged that as a consequence he could not walk for any significant distance without the aid of a mobility scooter, that he had severely impaired left arm movement, and that he could not continue with his hobbies of parachuting, BASE jumping or hillwalking. C made a substantial care claim supported by expert evidence which included claims for a specially adapted vehicle, quad bike, single storey accommodation and business class travel for future holidays.
However the Defendant (‘D’) obtained surveillance evidence which showed C using his left arm and hand without impediment, walking at a reasonable pace, driving normally, cycling, and visiting his local climbing wall. None of the recordings showed him using a mobility scooter or using a walking stick save for when visiting hospital. By the time the counter-schedule was produced D had obtained further evidence of C cycling up Mount Snowden and going on holiday abroad to Italy twice, Amsterdam and Poland without the aid of business class travel. D also obtained group photos from C’s BASE jumping club’s social media page which strongly suggested he undertaken a jump post accident. Despite being presented with the above evidence and warned of the consequences of making a dishonest claim C pressed on to Trial.
Things did not go well for C. Under cross examination C accepted he had been abroad on 14 occasions on budget flights despite telling his case manager he tried to go on holiday only once which was cancelled due to COVID. C attempted to blame inconsistencies concerning walking distance and his general physical ability variously on his dyslexia, limited educational attainment, his legal team and his experts. His mother also gave evidence in support of the care claim, but was found to be unreliable, having omitted reference to the numerous holidays abroad during which time she claimed to have provided care at home. She was also found to have provided care at a far lower level than pleaded. The Judge found she was acting as an advocate for her son as opposed to being a reliable witness. The Judge also found C had significantly exaggerated his physical disability, finding that he had no need for a mobility scooter or quad bike as claimed.
Whilst HHJ Sephton KC did find that serious injuries had been sustained he nonetheless dismissed the claim entirely due to the claimant’s dishonesty. He placed significant weight on C’s signed statements of truth in his witness statement and schedule of loss which were inconsistent with the evidence presented by D. The difference between the pleaded case (which at one stage amount to c.£6.5 million) and what it was actually worth (found to be around £1.2 million) was ‘striking’ in the Judge’s view. In finding that the dishonesty was fundamental to the Claim HHJ Sephton KC held at [175]:
“I have reached the conclusion with regret that Mr Shaw advanced a case that his mobility and function were severely compromised when he knew that his mobility and function were not nearly so severely affected as he made out. He then gave explanations and excuses which he knew to be untrue. I do not think that the ordinary person would consider that Mr Shaw was merely exaggerating his disability in a manner that might be excused, if not condoned. His account was too different from reality to be accounted for by exaggeration. ln my judgment. Mr Shaw's conduct was dishonest by the standard ordinary decent people.”
C then invited the Judge to consider the ‘substantial injustice’ exception under s.57(2) and to nonetheless award him damages. The Claimant argued the loss of substantial damages alone in respect of the genuine element of the claim amounted to substantial injustice. Of interest to all those practitioners dealing with cases involving s.57, HHJ Sephton KC considered the following factors were relevant:
(i) Subject to that application of the canons of statutory interpretation the expression s.57 consists of ordinary English words whose meaning is not ambiguous, obscure or absurd [178].
(ii) Section 57(2) confers upon the court a broad discretion to determine whether the dishonest claimant will suffer substantial injustice [180].
(iii) Whilst dismissal of the claim would mean C’s financial position would be much less favourable, even parlous, his basic needs would nonetheless be met by the state [183].
(iv) The fact that the defendant had admitted liability and unsuccessfully argued for a reduction due to contributory negligence had little bearing on the question of ‘substantial injustice’ [184].
(v) Instead, the blameworthiness of the Claimant’s dishonest conduct was more relevant. The fact that C had been warned about the consequences of his lies but remained unrepentant had a ‘corrosive’ on the honest element of the claim [187].
(vi) The lies had a significant effect on the costs of the case and the use of court resources. What should have been a straightforward quantum assessment was muddied by the Claimant’s lies, with the parties incurring the costs of a 10-day trial and the Court expended valuable resources [187].
(vii) Considering all of the above, although the dismissal of a large claim would cause C significant financial hardship it would not inflict substantial injustice. The Judgment ends with the phrase “Mr Shaw has only himself to blame.” [188].
Defendant insurers should welcome this Judgment given the strong condemnatory words used by HHJ Sephton KC. On the basis of this Judgment and the recent case of Williams-Henry v Associated British Ports Holdings Ltd [2024] EWHC 806 (KB), also commented on in this blog, claimants are unlikely to be able to wriggle free from the consequences of lies or serious exaggeration by relying on the ‘substantial injustice’ exception, even if they will suffer significant financial hardship by the dismissal of the honest element of their claim. The Judgment also underlines the importance of an early warning given to claimants about the consequences of pursuing a dishonest claim. Meanwhile the wait for a reported authority where the ‘substantial injustice’ exception is deployed successfully continues.
