Toby Sasse, instructed by Rob Gray of Keoghs on behalf of Hastings Direct in the case of Woodger v Hallas, comments on some significant points raised in the successful appeal on Fundamental Dishonesty:
Woodger v Hallas  EWHC 1561 (QB), Mr Justice Julian Knowles, 20 June 2022
This appeal decision addressed some new points of interest in dealing with cases of fundamental dishonesty under s.57(2) of the Criminal Justice and Courts Act 2015.
The Claimant was found to have exaggerated his claim for injury damages by around £500,000 following a road traffic accident for which liability was admitted. Highly unusually, the trial judge declined to dismiss the claim despite having found fundamental dishonesty. The judge held there would be “substantial injustice to the Claimant” if he were to be deprived of all damages, because the judge had found that the Claimant had nonetheless sustained a serious ongoing injury and innocent third parties rendering necessary gratuitous care would be uncompensated. Instead, the trial judge assessed “honest damages” of approximately £79,000, but then penalised the Claimant by denying recovery of damages relating to earnings loss (past and future), which he had found proved. He therefore awarded £49,415.
Julian Knowles J allowed the Defendant’s appeal, restating his previously expressed view in L.O.C.O.G v Sinfield  EWHC 51 (QB) that loss of honest damages alone cannot amount to substantial injustice for the purposes of the proviso to s.57(2). However, he went further to conclude that the loss of damages for care claimed on behalf of innocent third parties could not form a basis for substantial injustice, because the proviso within s.57(2) referred only to injustice to the Claimant. The trial judge had failed to identify, in a way particular and peculiar to this Claimant, why loss of his honest damages would be substantially unjust to him. Accordingly, the trial judge did not have grounds to find substantial injustice and had wrongly refused to dismiss the claim as required by s.57(2).
All or nothing? The question whether a judge, who had found both fundamental dishonesty and substantial injustice within s.57(2), then had the power to reduce “honest damages” as an alternative penalty for dishonesty, as the trial judge did in this case, was not determined but left for argument in a case where it remained a live issue.
“Injustice” implies a balancing exercise: Julian Knowles J also endorsed the approach adopted by HHJ Sephton Q.C in Iddon v Warner  Lexis 39 where the assessment of the question of “significant injustice” to the Claimant involved an overt balancing exercise between the personal impact of the Claimant’s loss of damages on the one hand and, on the other hand, the nature and extent of the dishonesty found as it impacted the system of justice.
Toby Sasse comments: It remains the case that, seven years after section 57(2) was enacted, there appears to be no instance of a claimant, who has been found to be fundamentally dishonest, retaining their damages under the “substantial injustice” proviso. A clear set of principles has emerged from the case law as to what dishonesty means, what is intended by fundamental dishonesty under s.57(2), and now about the approach to the assessment of substantial injustice. The appeal also explored cost issues relating to late claimant part 36 offers in the context of fundamental dishonesty, but the dismissal of the action on appeal meant those issues did not fall to be resolved.
To read the full judgment please click the following link – https://www.bailii.org/ew/cases/EWHC/QB/2022/1561.html