The Court of Appeal has provided authority to back up recent lower court rulings that failing to prove a case does not mean the claimant was dishonest and so should lose the protection of qualified one-way costs shifting (QOCS).
Though the court’s ruling in Da Costa & Anor v Sargaco & Anor  EWCA Civ 764  was not made in the context of fundamental dishonesty (FD) disapplying QOCS, it still appears directly on point.
The appeal in Da Costa was over a finding a dishonesty in relation to a claim for damage supposedly caused to parked motorcycles by a negligent driver.
Lady Justice Black said: “The first thing to say is that a finding of fraud does not inevitably follow from a rejection of an accident claim as not proved. There may be many reasons why the claim is not proved other than that it has been fraudulently manufactured.
“Furthermore, a claimant’s failure to establish that a particular defendant negligently drove a car which collided with the claimant’s vehicle and caused damage is not the same, as a matter of law and logic, as it being established that the claimant made a fraudulent claim [her emphasis].”
We reported last week on a case in which His Honour Judge Freedman overturned a district judge ruling, holding that “merely because an account of an accident has been rejected does not, to my mind, equate to fundamental dishonesty”.
A similar case has also been reported by Manchester firm Express Solicitors. In Meadows v La Tasca, the claimant lost a slip claim against the defendant restaurant, after which the defendant’s barrister made an oral application for a finding of FD.
District Judge Khan ruled that he had not believed the claimant or her witness had said had happened, describing their evidence as “riddled with inconsistencies”.
He said: “In those circumstances, it is difficult to see how this is not a dishonest claim. This is not, for example, a claim where there has been a misremembering of key events, or some confusion or lack of clarity in relation to dates, events, premises or the like. The effect of the inconsistencies… was such that I simply did not believe what Miss Meadows said to me or Mrs McGrath said to me.”
So QOCS protection was removed, leaving the claimant to pay costs of £7,210, plus her own disbursements as the finding invalidated her after-the-event insurance.
However, on appeal His Honour Judge Hodge QC overturned the finding of FD.
The written judgment is not yet available, but according to Express Solicitors associate Craig Phillips, HHJ Hodge ruled that the district judge had erred in the exercise of his discretion.
Mr Phillips said the circuit judge ruled that just because the claimant’s case had not come up to proof and there were inconsistencies in the evidence, this did not mean it was fundamentally dishonest.
The solicitor said he was seeing FD allegations on a regular basis, and that they put claimants in a difficult position because they may struggle to find an appeal.
James Maxey, managing partner of Express Solicitors, added: “Our client’s integrity was attacked and she was branded as a liar. I am pleased we successfully challenged this finding of fundamental dishonesty.
“This is a worrying tactic being deployed by defendants where a claimant simply fails to prove their claim at trial. If every time a claimant loses a case the defendant alleges FD, the costs of cases will be greatly increased by claimant’s seeking to appeal any such findings.”