A circuit judge has rejected a claim of fundamental dishonesty that would have dislodged the protection of qualified one-way costs shifting against a claimant who lost at trial.
According to the account of Nesham v Sunrich Clothing from Winn Solicitors, which acted for the claimant, His Honour Judge Freedman held that “merely because an account of an accident has been rejected does not, to my mind, equate to fundamental dishonesty”.
In the original fast-track trial of the road traffic accident, District Judge Charnock-Neal ruled that on the balance of probabilities the claimant could not prove that the defendant had breached the duty of care that was owed to him.
After the judge and counsel had agreed that QOCS applied, the Newcastle firm recounted, the defendant then for the first time sought to accuse Mr Nesham of being a liar and that he was fundamentally dishonest.
However, the judge held that the claimant “gave me his version of events. I have preferred not to accept that version, but it does not necessarily follow that he was fundamentally dishonest”.
This was upheld by HHJ Freeman on appeal. He said: “Up and down the country on a daily basis, judges are being asked to decide whose account of a road traffic accident is more reliable.
“And it is the experience of everybody who litigates in this field that drivers involved in an accident will give different and contrary versions of accidents to the extent of not just which lane they were in, but where they came from, the route they had taken and so forth… which may not constitute dishonesty, far less fundamental dishonesty.”
The defendant was ordered to pay the claimant’s costs of the appeal.
Adam Thorpe, litigation manager at Winns, said: “Nesham is an important illustration of the way in which innocent, albeit unsuccessful, claimants are vulnerable to serious allegations with little risk to the defendant’s representatives.
“There is no doubt that fundamental dishonesty has a place where claims are grossly exaggerated, but it appears that some defendants are taking an improper approach to it as a costs building exercise and a tool to pressurise claimants into not pursuing claims.
“If they had succeeded here, the claimant would have been responsible for a bill of approximately £9,000 – far more than the modest sum being pursued for compensation.”
Mr Thorpe argued that previously reported decisions of fundamental dishonesty “clearly seek to put off genuine claimants from making a claim and are used as a scare tactic to suggest Claimants will be left with big bills and even criminal sanctions.
“It is hoped that decisions such as Nesham will redress the balance and show that properly represented claimants can robustly defend such allegations.”
He added that the government’s proposed increase in the small claims limit would put claimants facing the risk of fundamental dishonesty allegations “in a more vulnerable position than ever”.