Fundamental Dishonesty: Wright v Satellite Information Services Limited [2018] EWHC 812 (QB)

In this article, we report on the High Court judgment of Wright v Satellite Information Services Limited [2018] EWHC 812 (QB), in which the defendant sought to strike out a claim, on the basis that the claimant had been ‘fundamentally dishonest’, pursuant to s.57 of the Criminal Justice and Courts Act 2015.

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The test for ‘fundamental dishonesty’, in personal injury claims, was established by Knowles J, in the case of London Organising Committee of the Olympic and Paralympic Games (LOCOG) v Sinfield [2018] EWHC 51 (QB), which we discussed in edition 216 (here).

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In the Wright case, the claimant was injured at work, sustaining injuries ‘affecting his right lower limb’. He was unable to return to work. The defendants admitted liability and the court awarded the claimant around £120,000.

At the County Court, HHJ Pearce made no finding of ‘fundamentally dishonesty’, despite finding ‘that there were some real inconsistencies in the Claimant’s case’. This included the distance the claimant could walk, the extent to which a walking stick was needed and the level of pain suffered.

However, the 1st instance judge expressed concern for the medical expert’s ‘fundamentally unreliable’ report, as it ‘significantly’ overstated the care that the claimant required and claimed for. As such, the future care claim, which pleaded in excess of £73,000, was reduced to £2,100 for care following surgery. There was a ‘minimal’ need for continuing care.

The defendant appealed this decision, on the basis that HHJ Pearce was ‘wrong in not finding, on a balance of probabilities, that the Claimant had been fundamentally dishonest’.

It’s argument stemmed from the claimant’s ‘covert video surveillance’, which showed that the ‘claimant was far less disabled than he claimed and that he had deliberately and dishonestly exaggerated his claim’. The defendant went on to argue that the claimant, upon signing the schedule of loss, did so with a signed statement of truth. During cross-examination, the claimant admitted that ‘he had no ongoing need for care’ and the defendant submitted that this amounted to ‘dishonesty’.

At paragraph 21, Mrs Justice Yip accepted that:

‘… the insurers genuinely considered that there was a strong case for alleging dishonesty. They had obtained surveillance evidence which they considered showed exaggeration. They identified other inconsistencies. They fought this claim vigorously, as they were fully entitled to do. I have no doubt that their interpretation of the evidence led them to expect to succeed on the issue of dishonesty. However, while the Appellant criticises the judge for a lack of analysis, I consider that the assertion that the judge was bound to find dishonesty given his factual findings is itself based on a lack of detailed analysis of the way in which the claim was presented. The unintentional use of admittedly emotive language was perhaps symptomatic of that’.

Moreover, the High Court judge was ‘unimpressed’ by the medical evidence adduced. At paragraph 23, she further stated:

‘I question whether expert evidence was required to address the issue of care in this claim… [and] … generally I would question the need for a formal care report to deal with a limited need for a short period post-surgery.’

In respect of the drafting of a schedule of loss, at paragraph 27, Yip J reasoned:

‘The fact that the schedule of loss is required to be supported by a statement of truth highlights the need for it to be readily understandable by the claimant … not simply be a series of calculations. It needs to be supported by sufficient narrative to explain the case being presented by the claimant.’

She went on to advise, at paragraph 28, that:

‘It is very important that lawyers draft the schedule in such a way that the facts to which the client is attesting are clear. Failing to do so is failing in their duty both to the client and to the court.’

At paragraphs 32 and 33, Yip J stated that:

‘Read in the context of the evidence and the way in which the claim was presented in the schedule, it is clear that in finding that the claimant had not established his claim for future care, the judge was not bound to find that the claimant had acted dishonestly merely in presenting such a claim. The reason for the judge's rejection of this element of the claim was not that he found the Claimant's evidence to be untruthful, but rather that a proper interpretation of that evidence did not support the assessment of the care expert.

I do not consider that the judge was wrong in not treating the failure to establish the care claim as amounting to a finding of dishonesty. I would go further. I would have been surprised if the judge had found that the rejection of the bulk of the future care claim in itself when set in context did support a finding of dishonesty, still less fundamental dishonesty’.

The case of Wright was distinguished from LOCOG, wherein the claimant had manufactured ‘false invoices to support a claim’. On full analysis, both the judge at 1st instance and the High Court judge focused on the failures of the care expert, which were unsupportive of the claimant’s evidence.

In dismissing the appeal, at paragraph 40, Yip J concluded that:

‘… although at times the Claimant gave a misleading impression by focusing on his symptoms when they were at their worst, he had not deliberately attempted to overstate his case’.

This was a case of ‘inadvertent’ exaggeration, which will not constitute a finding of fundamental dishonesty, under s.57 of the 2015 Act.

The full text judgment can be found here.