18 April 2018
The Inner House of the Court of Session has unanimously rejected the appeal and cross appeal in the case of Grubb v Finlay [2017] CSOH 81.
The facts
The claim arose from a low speed road traffic accident. The defender admitted that he had reversed his vehicle into the pursuer’s stationary car. The only issue was quantum of damages, but the pursuer claimed his symptoms were preventing him from returning to work (over 5 years post-accident). The defender’s position was that the pursuer was exaggerating his symptoms for financial gain and that the action should be dismissed on the basis of “fundamental dishonesty”.
The case at first instance
At first instance, the judge accepted that “in an appropriate case, the court may exercise a power to dismiss an action if a fair trial is impossible, or if there is fundamental dishonesty on the part of the pursuer or an abuse of process” but this power required to be exercised “sparingly”. To dismiss the action in this case would, in his view, have created injustice. The pursuer would be deprived of his entitlement to damages and the defender would avoid his corresponding responsibilities.
Decree was granted in the pursuer’s favour for £6,000 plus interest on the basis that his injuries did not extend beyond a period of 12 months. The judge did not accept the pursuer’s evidence as credible and reliable in “several areas”, but his character failings and flaws and his lack of candour, were not sufficient to deprive him of his entitlement to damages.
To take into account the fact that the pursuer had presented various parts of his case with a “significant lack of candour” the Lord Ordinary penalised the pursuer by awarding two-thirds of the expenses of the action to the defender.
The Appeal/Cross Appeal
The defender appealed the decision to the Inner House arguing that the judge had erred in refusing to dismiss the action on grounds of fundamental dishonesty. The pursuer cross appealed the decision to award two thirds of the expenses to the defender.
The Inner House accepted that the court has inherent power to dismiss an action summarily in such circumstances, even although there is no such statutory provision in Scotland. However, it must be “a very rare and exceptional case indeed that the court will bring a case to a sudden and permanent end”.
The judges agreed that the pursuer was not fundamentally dishonest as he had been involved in a genuine accident sustaining injuries lasting for a year. The pursuer “made a good, if exaggerated, claim”. The Inner House commented that it would have been quite inappropriate for the judge at first instance to have dismissed the action summarily. The fact that the defender’s application for dismissal on the grounds of fundamental dishonesty was made on the eve of the continued Proof diet was specifically noted.
In relation to the cross appeal on expenses, the Inner House commented that appeals on expenses “should not be entertained except where there has been an obvious miscarriage of justice”. The judges observed that the award of expenses in favour of the defender is, “at first sight, a surprising one” given that ordinarily expenses ought to follow success. However, this rule can be displaced in circumstances where the conduct of a party has been improper or unreasonable. It was therefore entirely within the power of the judge to make the decision that he did on expenses and the Inner House found no basis upon which they could interfere with that.
It is therefore clear that in Scotland a case will only be dismissed on the grounds of fundamental dishonesty in rare and exceptional circumstances.
Comparison with the position in England & Wales
In January 2018, the High Court of England & Wales held in London Organising Committee for the Olympic and Paralympic Games (in liquidation) v Sinfield [2018] EWHC51 (QB) that fundamental dishonesty existed. The claimant had knowingly made dishonest misrepresentations in his schedule of loss which could have resulted in the defendant insurers paying out far more than they could properly, on honest evidence, have been ordered to pay. The court held the fact that the greater part of the claim may have been genuine was “neither here nor there”. The High Court commented that if an application is made under section 57 and the judge determines that the claimant has been fundamentally dishonest, then the entire claim must be dismissed, including any genuine element of the claim, unless the claimant can show he would have suffered substantial injustice if his claim was dismissed.
The bar is now clearly higher in Scotland for successfully having a case dismissed for fundamental dishonesty. It should be noted, however, that there is no equivalent provision in Scotland to Section 57 of the Criminal Justice & Courts Act 2015 which is applicable in England & Wales only.
The timing of the application for dismissal in Grubb is something that is mentioned both by the judge at first instance and the Inner House. Whether the court would have taken a different view had the application been made earlier in proceedings is not known, however, certainly the decision is going to make it more difficult in Scotland to have a case dismissed summarily for fraudulent and exaggerated personal injury cases in the future.
Click here to view the full decision of the Inner House in the Grubb v Finlay
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Joanne Farrell |