Chris Booth reports on one of the first cases where qualified one-way costs shifting was disapplied after the court found that the claimant's claim was on the balance of probabilities "fundamentally dishonest".
We recently acted for Oldham Council following the receipt of a highway tripping claim where the claimant claimed that she had been injured as a result of her having tripped due to a pavement defect. The claim attracted early attention and there was initial scepticism due to various issues with the claimant’s own account of how the accident was said to have occurred, most of which appeared improbable.
The claim also formed part of a wider investigation given the volume of claims that had been presented to the council from a relatively small number of individuals all living within a small geographical area, some claiming to have fallen at similar locations.
It transpired that the defect in question had been the subject of another alleged fall, resulting in the presentation of a claim, from the claimant’s uncle who claimed to have fallen in the same defect only four weeks earlier.
Detailed investigations established tangible links between a large number of those presenting claims making it highly improbable that claims in the volumes presented could be legitimate.
Three separate litigated actions were being dealt with by Forbes’ Anti Fraud Team, all reinforcing the links between the various claimants and all bolstering the improbability of the claims being anything other than fraudulent. It was decided that there was sufficient evidence upon which to plead fraud and an application was drafted to seek the court’s permission to amend the defence to plead fraud on each of the three cases and to have the claims heard consecutively given the commonality of the evidence obtained.
On hearing that the council intended to take these steps, the claimant promptly discontinued and sought to rely upon the provision of Qualified One way Costs Shifting (QOCS) to avoid paying the defendant’s costs of the action. An application was therefore made to seek the court’s permission to disapply QOCS pursuant to CPR Rule 44.16. The application was strenuously opposed with the claimant attempting to justify why she had discontinued for reasons other than the intended allegation of fraud.
The court was satisfied, on the balance of probabilities, that the claim was fundamentally dishonest and made an order to disapply QOCS and ordered that that the claimant pay the defendant’s costs of the action and of the application.
One of the difficulties facing practitioners in cases such as these is that no guidance has been given as to what determines "Fundamental Dishonesty", no definition has been given and case law is extremely limited. Cases dealt with by the courts so far have largely centred on fairly clear evidence which would be difficult to challenge such as surveillance evidence which seeks to directly contradict the claimant’s evidence either as to the accident circumstances or aspects of quantum.
The facts of this case were unique in that the court was required to, and indeed was content to, make an assessment of the strength of the evidence against the claimant at an interlocutory hearing rather than ventilating the entirety of the evidence, considerable as it was, at a trial which might ordinarily take a day or more.
Allegations of fraud require proof to a higher standard than the usual civil test and rightly so. The judiciary and practitioners alike are currently finding their feet with the rule that a finding of "Fundamental Dishonesty" needs evidence to be proven on the civil standard. The fine distinction between a finding that a person is to be branded a fraudster and a finding that there is sufficient evidence that the claim presented carries sufficient hallmarks of dishonesty that the usual costs rules be disapplied is a difficult balance to strike.
Time will tell as to whether cases such as this represent a judicial shift towards an acknowledgement that there are often cases which either do not meet the high standard of proof required to plead fraud or where the opportunity to ventilate the evidence at trial has been lost but where the judiciary feel that an order dis-applying the QOCS rule ought to be made given the real and tangible concerns raised. As ever, cases are very much fact specific. Much will depend on the strength of the evidence obtained and the manner in which the evidence has been presented to the court which may ultimately determine whether similar applications will succeed in the future.