Knowles J has allowed the appeal in Woodger v Hallas [2022] EWHC 1561, reversing the first instance decision not to dismiss a fundamentally dishonest claim under Section 57(2) of the Criminal Justice and Courts Act 2015 (‘the CJCA 2015’).

Section 57(2) requires that where the claimant is found to be fundamentally dishonest in relation to the primary claim or a related claim, ‘the court must dismiss the primary claim, unless it is satisfied that the claimant would suffer substantial injustice if the claim were dismissed’.

First Instance Decision

At first instance the claimant was found to have brought a fundamentally dishonesty in relation to his claim under Section 57(1) of the CJCA 2015. The Claimant was found to have exaggerated the level of disability caused by the accident and been dishonest about his earning capacity. The dishonesty was sustained over a number of years and involved others.

However, the Judge at first instance did not dismiss the claim under Section 57(2) on the grounds that it would be unjust to dismiss the whole claim, citing that there were genuine elements to the claim and parts of the claim which were brought on behalf of innocent parties (namely past care claims).

Instead, the lower court dismissed all aspects of the claim based upon lack of earning capacity but allowed the remainder of the claim.

Appeal Decision

On appeal, it was held that there was no proper or adequate basis for the judge’s finding that it would be substantially unjust to dismiss the entire claim. The judge’s reasoning that there would be substantial injustice on the basis that part of the claim was genuine and others had provided past care could not stand.

The following key points were noted:

  • Section 57 only comes into play where the court finds that a claimant is genuinely entitled to some damages. Therefore, in every case to which Section 57 applies, a claimant will stand to lose their damages.
  • Accordingly, ‘substantial injustice’ must mean something more than losing genuine damages (as previously discussed by Knowles J in LOCOG v Sinfield [2018] EWHC 51).
  • The substantial justice must be suffered by the claimant, not anyone else.
  • Reference was made to Iddon v Warner [2021] Lexis Citation 39, in which the Judge approached the question of substantial injustice by balancing on the one hand, the nature and extent of the claimant’s dishonesty, and on the other the injustice to her of dismissing her whole claim, in that case coming down in favour of dismissal which outweighed the latter.
  • Applying the same approach to this case, even if there was some injustice to the claimant, the same conclusion must follow. The dishonesty was sustained and involved others, equating to dishonesty so serious that it outweighed any injustice to the claimant.
  • In LOCOG v Sinfield Knowles J had declined to provide a prescriptive definition of ‘substantial injustice’. Knowles J maintained a consistent approach in this case. Instead, he paraphrased US Supreme Court Justice Potter Stewart in Jacobellis v Ohio to say in respect of ‘substantial injustice’: “county court judges will generally, ‘know it when they see it’”.

Accordingly, on appeal, the entire claim was dismissed.

The appeal court went on to record the amount of damages that the claimant would have received, but for the dismissal under Section 57(2), and deduct that amount from the costs that the claimant would become liable for, in accordance with Section 57(4) and 57(5). The defendant was awarded the costs of the action.