Fundamental dishonesty and QOCS - Soldier, Spy, Tinker/Tailor

A recent case has illustrated that, under Practice Direction 44, the court has the power to direct that issues arising out of an allegation that a claim was fundamentally dishonest be determined notwithstanding that a Notice of Discontinuance has been served. This is significant because, where a claim is found to be fundamentally dishonest, it serves as an exception to the qualified one-way costs shifting regime.

Background

In Mantey v Ministry of Defence [2023] EWHC 761 the claimant, formerly a soldier, had brought an action against the defendant for an alleged non-freezing cold injury. The claimant had been medically discharged from the army on 31 January 2020. He contended that he suffered from disabling pain, an inability to drive long distances or carry out household chores and a significantly impaired ability to walk, meaning that, for the majority of the time, he walked with a stick.

The defendant obtained and disclosed surveillance footage which included a recording of the claimant walking his daughter to school the same day that he had been seen by one of the defendant’s medical experts. In the footage, the claimant walked without a stick, in a normal manner and at a normal pace. The claimant filed a Notice of Discontinuance on 28 April 2022.

The issue at trial

The defendant contended the discrepancies were due to the claimant’s dishonesty. The claimant contended the inconsistencies could be explained by a combination of medication, CBT and the encouragement of a neighbour. The court ordered that the question of fundamental dishonesty should proceed to trial.

In determining the issue at that trial, Eyre J referenced the approach set out by Lord Hughes in Ivey v Genting Casinos (UK) Ltd [2017] UKSC 67 to the effect that he needed to:

1. determine whether the claimant’s conduct in his manner of  presenting himself and/or in reporting his symptoms was dishonest by the standards of ordinary decent people.
    
2. if the claimant was found to be dishonest, consider whether the claim was fundamentally dishonest for the purposes of Part 44.16(1) of the Civil Procedure Rules, which states:

“Orders for costs made against the claimant may be enforced to the full extent of such orders with the permission of the court where the claim is found on the balance of probabilities to be fundamentally dishonest.”

The decision

Eyre J found that the claimant’s presentation before and after the examination could not be medically explained. As regards dishonesty, he determined that the claimant had chosen to report symptoms which he knew were false, choosing to do so in the context of a substantial damages claim. He concluded that the only explanation was that he had done so deliberately to enhance the value of the claim and was, therefore, dishonest.

On the balance of probabilities, Eyre J considered that the claim had been dishonestly exaggerated when it commenced in October 2020. He added that, even if it had only been dishonestly exaggerated since the time of the examination in September 2021, that was still comparatively early in the life of the action (approximately one year after its commencement). Accordingly, Eyre J determined that the claim was fundamentally dishonest because:

“there was dishonesty as to a central feature of the case, namely the extent and continuing effect of the claimant’s injuries. This would have the effect of substantially increasing the value of the claim over the value of any properly tenable claim and pervaded the presentation of the case from at the latest early September 2021 onwards.” 

Comment

Whether the defendant is seeking recovery of costs against the claimant is unknown. However, in a landscape in which defendants often bemoan the outcomes generated by qualified one way costs shifting, this claim (in which the claimant both tinkered with and tailored his account) serves as a stark and timely reminder to claimants that service of a Notice of Discontinuance is not a magic bullet.