There has been a recent flurry of press reports of legal cases against healthcare providers in which claimants have been denied compensation by the courts because they’ve been fundamentally dishonest. In some cases, this has led to criminal committal proceedings against the dishonest claimant, resulting in custodial prison sentences.
The legal concept of fundamental dishonesty was first introduced in 2013 in relation to qualified one-way costs shifting (QOCS). QOCS means that defendants in personal injury actions cannot recover their costs even if the claim against them fails. However, this is subject to some exceptions, one of which is that a Defendant can recover their costs from a fraudulent claimant. A classic example of this would be a traffic accident fraud such as phantom passengers or crash for cash.
The Criminal Justice and Courts Act 2015 widened the application of fundamental dishonesty to claims where the defendant is liable (or would be liable if the claimant hadn’t been fundamentally dishonest). Under Section 57, a court can dismiss the entire claim if it finds the claimant has been fundamentally dishonest about an aspect of the claim.
There is no legal definition of fundamental dishonesty, but case law requires it to go beyond minor inaccuracies and strike at the heart of the case. A good example is the case of Metcalf v Calderdale & Huddersfield NHS Trust. The Claimant, a woman in her late 20s, had a valid claim for negligently delayed diagnosis of cauda equina syndrome, causing urinary incontinence and a need for a permanent catheter. Her true claim was worth around £350,000. However, she claimed £5.7 million because she hugely exaggerated the extent of her disability. The Court decided that this exaggeration amounted to fundamental dishonesty, and she received nothing.
The NHS Trust was represented in that case by Claire Toogood KC, a senior clinical negligence barrister based at Crown Office Chambers in London. Ms Toogood has acted for several NHS clients in leading cases involving fundamental dishonesty. In her recent appearance on the AlteaTalks podcast, Ms Toogood emphasised that identifying the right case in which to run the argument is key.
According to Ms Toogood “the vast majority of medical negligence claims are genuine, so NHS Resolution and medical indemnity insurers must be very careful not to plead fundamental dishonesty unless they have very good evidence”
So what signs should insurers be alert to in these cases? Ms Toogood says that there are some obvious “red flags”. These include instances where the alleged disability is completely out of proportion to the original injury, or where there are inconsistencies between a Claimant’s accounts given to different experts, or inconsistencies in the linear progression of an injury that would usually be expected to get better over time.
In Ms Toogood’s recent case of Murphy v Wye Valley NHS Trust, a builder sued his surgeon for poor biceps tendon repair. Despite apparently successful follow-up surgery, he continued to claim that he could not use his arm for anything, including his work. Unfortunately for Mr Murphy, he was later seen lifting huge weights in his local gym and playing in a rugby match, which was reported in a local newspaper. Found to be fundamentally dishonest, he received no damages at all and was subsequently jailed for contempt of court.
When it comes to proving fundamental dishonesty, Ms Toogood considers that the best evidence is still video surveillance. Whilst social media posts can also be very helpful, this evidence is easier to challenge as people are becoming savvier about privacy settings and, if they do slip up, can always argue they were simply trying to show themselves in the best light possible.
There is no optimal time for obtaining surveillance evidence, but Ms Toogood suggests that “it is most compelling when it’s very close in time to a witness statement, schedule of loss or expert examination”. This minimises the claimant’s ability to argue a sudden recovery or that they are simply having good and bad days. Also, court documents must be supported by a statement of truth. This requirement was beefed up in October 2020 to state not only that the person signing it believes the contents of the document to be true, but that they understand that proceedings for contempt of court can be brought against anyone who signs a statement without an honest belief in its truth.
It remains unclear how much this trend will deter prospective fraudulent claimants. Pleading fundamental dishonesty is a serious step, carrying significant reputational and costs related risks for healthcare providers and their insurers. It is only to be used sparingly. However, in the right cases, it’s a powerful tool that sends out a clear message to fraudulent claimants: exaggerate your claims, and you risk coming away empty handed and potentially facing prison.
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