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Law firms need to rethink approach under ‘fundamentally dishonest’ rule, barristers warn

Brindle: provision will lead to more successful strike-out applications [1]

Brindle: provision will lead to more successful strike-out applications

Claimant solicitors have been warned that they need to review their retainers and advise clients about the implications of the new ‘fundamentally dishonest’ rule being introduced shortly.

Section 57 of the Criminal Courts & Justice Act, given Royal Assent on 12 February, will also shift the burden of proof and potentially discourage claimants with genuine claims, according to barristers at 9 Gough Square.

The section provides that if the court is satisfied, on the balance of probabilities, that the claimant has been fundamentally dishonest, it must dismiss the claim unless satisfied that this could cause substantial injustice.

Jeremy Ford, head of the set’s personal injury team, said that once the implementation date is confirmed, solicitors will need to consider whether their retainers adequately deal with a case being struck out on this basis, and will also have to advise clients on the implications for their funding arrangements should this happen.

More generally they will have to contact their clients to outline the new rule and what actions might be considered in breach of it.

9 Gough Square’s John Foy QC and Simon Brindle acted in the leading case on the term to date [2], representing the defendant in Gosling v Screwfix, in which a circuit judge ruled last year that a claimant who exaggerated his symptoms was fundamentally dishonest for the purposes of losing the protection of qualified one-way costs shifting.

Mr Brindle said section 57 will both reverse the burden of convincing the court to exercise its discretion regarding striking out the claim, and fetter that discretion: “Under the common law, it is for the defendant to convince the court to exercise its power; under section 57, the court must strike out unless convinced that doing so would cause the claimant substantial injustice.”

There will need to be court guidance on the meaning of ‘fundamental dishonesty’ and ‘substantial injustice’, he added.

“Defendants already have a very many number of weapons in their arsenal to attack dishonest and fraudulent claims. I consider that section 57 not only strengthens that arsenal but could lead to many more successful applications for claims to be struck out.

“As a result, perhaps now more than ever, claimant representatives need to be alive to the need not to present exaggerated claims. Will this, though, lead to somewhat speculative, but otherwise meritorious claims not be pursued for fear of a finding of fundamental dishonesty being made should the claimant not come up to proof? I fear it will.”