Fundamental Dishonesty Appeal Allowed

On 21 March 2017 HHJ Cotter QC sitting in the County Court at Exeter allowed an appeal against the refusal to permit the enforcement of a costs order against an unsuccessful Claimant in a personal injury claim.


Pursuant to rule 44.16 of the Civil Procedure Rules one of the exceptions to the qualified one way costs shifting rules, which protect Claimants in personal injury claims, is that where fundamental dishonesty is found by the court a costs order may be enforced against an unsuccessful Claimant. Following the trial of a personal injury claim on 4 November 2016 a Deputy District Judge sitting in the County Court at Plymouth dismissed a claim for personal injury and found that the Claimant had been dishonest but not guilty of fundamental dishonesty and therefore refused to allow a costs order to be enforced against him. The Defendant insurance company appealed against that decision.


In allowing the Defendant’s appeal HHJ Cotter QC concluded that the Deputy District Judge had erred in not finding that the dishonesty was fundamental dishonesty. The decision is significant because it deals with two points that have not been the subject of previous court decisions as well as adopting a consistent approach to the issue of fundamental dishonesty to that taken in other county court decisions (most notably Gosling v Hailo). Those two points are:


(1) The judge ruled that prejudice was not relevant to the question of whether the claim was fundamentally dishonest. One of the reasons that the Deputy District Judge had given for not allowing enforcement of the costs order had been that there had not been prejudice to the Defendant because the Claimant had retracted the untrue evidence the day before trial, and had a separate element of the claim not tainted by dishonesty that he had been guilty of.


(2) The judge found that rule 44.16 of the Civil Procedure Rules involved a two stage test. Firstly, was the claim fundamentally dishonest, and secondly, If so, should the court exercise its discretion to allow enforcement of the costs order and to what extent.


Russell James of Magdalen Chambers represented the successful Appellant and insurance company in this case. Tim Felton of Magdalen Chambers represented the Respondent.

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