King's / Queen's Bench Division of the High Court

QB-2018-004997 - [2025] EWHC 2301 (KB)

Fecha: 09-Sep-2025

“Fundamental Dishonesty”

162.

The meaning of the phrase “fundamental dishonesty” was considered by the Court of Appeal in Howlett and another v Davies and another [2018] 1 WLR 948. There at paragraphs 16-17 Lord Justice Newey cited with approval an earlier judgment of His Honour Judge Moloney QC,

16.

As noted above, one-way costs shifting can be displaced if a claim is found to be ''fundamentally dishonest''. The meaning of this expression was considered by His Honour Judge Moloney QC, sitting in the County Court at Cambridge, in Gosling v Hailo (unreported) 29 April 2014. He said this in his judgment:

''44. It appears to me that this phrase in the rules has to be interpreted purposively and contextually in the light of the context. This is, of course, the determination of whether the claimant is 'deserving', as Jackson LJ put it, of the protection (from the costs liability that would otherwise fall on him) extended, for reasons of social policy, by the QOCS rules. It appears to me that when one looks at the matter in that way, one sees that what the rules are doing is distinguishing between two levels of dishonesty: dishonesty in relation to the claim which is not fundamental so as to expose such a claimant to costs liability, and dishonesty which is fundamental, so as to give rise to costs liability.

''45. The corollary term to 'fundamental' would be a word with some such meaning as 'incidental' or 'collateral'. Thus, a claimant should not be exposed to costs liability merely because he is shown to have been dishonest as to some collateral matter or perhaps as to some minor, self- contained head of damage. If, on the other hand, the dishonesty went to the root of either the whole of his claim or a substantial part of his claim, then it appears to me that it would be a fundamentally dishonest claim: a claim which depended as to a substantial or important part of itself upon dishonesty.''

17 In the present case, neither counsel sought to challenge Judge Moloney QC’s approach. Mr Bartlett spoke of it being common sense. I agree.

163.

Analysis of the decided cases on “fundamental dishonesty” has almost invariably led judges back to the statute itself. I have in mind Mr Justice Freeman’s observations in Denzil v Mohammed [2023] EWHC 2077 at paragraph 41, with which Mr Justice Cotter agreed in Boyd v Hughes, that,

(i)

There is a danger about elaboration and metaphor. Otherwise, the Courts will be applying the elaboration and metaphors of previous judges such that the words of the statute will fade into history and will not be applied: see Elgamal at para. 70 per Jacobs J.

(ii)

The statutory word "fundamental" should be given its plain meaning. The expressions "going to the root" or "going to the heart" of the claim are often sufficient to capture the meaning of the statutory word. Provided that it is understood in the same way, it might assist in some cases in respect of applying the word "fundamental" to consider whether the dishonesty "substantially affected the presentation of (the) case, either in respects of liability or quantum, in a way which potentially adversely affects the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation": see LOCOG at paras 62-63.

(iii)

The question whether the relevant dishonesty was sufficiently fundamental should be a straightforward jury question. As stated above, this judgment would return to this. "It is a question of fact and degree in each case as to whether the dishonesty went to the heart of the claim. That must involve considering the dishonesty relied upon, and the nature of the claim both on liability and quantum which was actually being advanced”: see Elgamal at para. 72 per Jacobs J.

(iv)

It will often be appropriate in this holistic exercise to consider the extent to which the alleged dishonesty resulted in an inflated claim, that is the extent to which the dishonesty, if not exposed, would potentially have resulted in a higher quantum of recovery in respect of the claims made. This involves consideration of the various losses claimed by a claimant and assessing the potential impact of the alleged dishonesty on the award for those losses: see Elgamal at para. 73 per Jacobs J.

"In some cases, it will be obvious that the dishonesty had a potential impact on the amount that might be awarded for a particular head of loss. For example, a personal injury claim will invariably involve a claim for PSLA, and a dishonest description of symptoms and suffering will inevitably have a potential impact on the PSLA. The significance of that potential impact is a matter for consideration in the context of whether the dishonesty went to the root of the claim. Conversely, it may be clear that the alleged dishonesty has no material impact on a particular head of loss..": see Elgamal per Jacobs J at para. 74.”

164.

In cases where there is a finding of dishonesty the three questions posed by Mr Justice Cotter in Brian Muyepa v Ministry of Defence [2022] EWHC 2648 at paragraph 388 are useful tools for assessing whether the dishonesty has been fundamental;

“In cases of this nature when considering whether the Claimant’s dishonesty has been fundamental dishonesty in relation to the primary claim or a related claim I have found the following three questions (which have a degree of overlap) to be helpful,
a)
At what stage and in what circumstances did the Claimant’s dishonest conduct start? In some cases the true core of the claim, the base, can be determined without considerable difficulty and the dishonesty can be traced to a point/time when the Claimant decided to consciously exaggerate for financial gain, for example after an operation or treatment has alleviated symptoms. The timeframe may be an extended period, e.g. as residual symptoms gradually ease, or sharply defined. In other cases it may be more difficult to identify when the dishonest conduct started. In any event the court is entitled to proceed with considerable caution in answering this question given the limits of any reliable evidence.
b)
Does the dishonesty taint the whole of the claim or is it limited to a divisible element?
c)
How does the value of the underlying valid claim (which the court must assess) compare with that of the dishonestly inflated claim? There is no set ratio as to what constitutes fundamental dishonesty but it is usually important to consider relative values.”

I have dismissed the claim and therefore the requirement at (c) to assess its value contained section 57(4) does not apply. The significance of the dishonesty and how it would have affected the value of the claim remain however relevant considerations.

165.

Like all capacitous Claimants, the Claimant either verified her statements and her schedules of loss with a statement of truth herself or authorised their verification by her solicitors. This is a step in the litigation whose importance was set out by His Honour Judge Sephton KC at paragraph 171 of his judgment in Shaw v Wilde [2024] EWHC 1660,

“In my view, the statement of truth indicates that the person verifying a document knows what they are signing and vouches for its accuracy. This is the object of the clear policy evident in recent rule changes: the form of the statement of truth has been altered so that a person who verifies a document appreciates the serious consequences of verifying without an honest belief in its truth; the rules have changed to ensure that persons whose own language is not English express themselves in their own language. The court is entitled to expect that a person who verifies a document understands it and has an honest belief that what he is verifying is true.”

166.

The burden of proving fundamental dishonesty is on the Defendant. The standard to which I must be satisfied is the balance of probabilities taking into account the serious nature of the allegations.