Findings of fundamental dishonesty, as an exception to qualified one-way costs shifting (QOCS), were made following a successful defence of a ‘slam-on’ motor fraud involving a £53,000 credit hire claim.
Findings of fundamental dishonesty, as an exception to qualified
one-way costs shifting (QOCS), were made following a successful
defence of a 'slam-on' motor fraud involving a
£53,000 credit hire claim.
Clyde & Co acted for UPS Ltd in its successful defence of
fraudulent claims for injury, loss of earnings, credit hire,
storage and recovery charges totalling c.£70,000.
UPS contended that the two Claimants had deliberately induced a
road traffic accident on the A406 by slamming on their brakes in
front of a UPS delivery lorry. The case was listed for a
Prior to trial, the Second Claimant's claim was struck out
for failing to serve any witness evidence. The day before the trial
was due to start, the First Claimant filed a notice of
The case fell under the QOCS regime, but before the section 57
Criminal Justice and Courts Act 2015 Fundamental Dishonesty came
UPS proceeded to trial and sought findings of fundamental
dishonesty against both Claimants, notwithstanding that the
Claimants would not be giving evidence, in order to secure an
enforceable costs order.
HHJ Harris QC considered the case on paper and found that the
claims were fundamentally dishonest within the meaning of CPR
r.44.16. Permission was given to enforce costs against the
Claimants, which were to be assessed on the indemnity basis.
This case serves as further clarification as to the direction
in which the concept of fundamental dishonesty as an exception to
QOCS is being developed, and the extent to which it is being
embraced by the courts.
The finding is in line with recent judicial authority on the
issue. In Khan v Rahman and Haven Insurance Group ,
a finding of fundamental dishonesty was made on paper (but
following an application for summary judgment, rather than
discontinuance). This was significant as the CPR make no provision
for a finding of fundamental dishonesty following summary judgment.
Notably, both parties/drivers denied the presence of the Claimants
and the outcome may have been different, or a hearing may have been
required, had the third party driver supported the bogus
Valentin is therefore a helpful clarification to
illustrate other circumstances where a fundamental dishonesty
finding may be made on paper, i.e. a paper assessment is seemingly
therefore still possible even where there is a liability dispute
between the parties.
If the Claimants had been found to be fraudulent at trial and
proceedings had been brought after s. 57 came into force, the Judge
would not have been permitted to make a s 57 finding of fundamental
dishonesty, as the statute requires that 'the Claimant is
entitled to damages' before such a finding can be made.
Accordingly, a substantive finding of fundamental dishonesty would
make no difference to the outcome of the case where a finding of
fraud or full dismissal of the case has been made.
Settling contentious claims without prejudice to liability is an everyday occurrence for most Insurers. The vast majority of claims which are subject to litigation are settled at some point in the course of the proceedings, and the settlement is usually expressed to be without admission of liability.
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