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Section 57 & Substantial Injustice - Nicholas Dobbs, Temple Garden Chambers

14/07/22. In Woodger v Hallas,[1] the Defendant appealed against the trial judge’s failure to dismiss the claim in its entirety following a finding that the Claimant had been fundamentally dishonest within the meaning of s 57(1) of the Criminal Justice and Courts Act 2015. The Defendant argued that there was no proper basis for a finding of substantial injustice, and the trial judge did not balance the extent of the Claimant’s dishonesty against the suggested injustice to him if the claim were dismissed in its entirety.

The Claimant had been the subject of surveillance and on a number of occasions was seen working at a local garage moving relatively freely, at a time when he was complaining of substantial disability and inability to earn. It further became apparent that he had done a substantial amount of paid work when he said he was not earning. The trial judge had been left “with the distinct impression that an attempt has been made to pull the wool over my eyes” in respect of some of the claimed loss of earnings.

After calculating the various heads of damages, the judge turned to the question of fundamental dishonesty. He found that the Claimant had exaggerated his symptoms on presentation to the medical experts. While he was not fabricating his hip symptoms, he had presented them as being more debilitating than they were. He also found that the Claimant had concealed his income from working. He had not concealed that he was doing some work, just that he was being paid for it. He had been dishonest about his earning and earning capacity.

The trial judge acknowledged that there were elements of the claim which remained uncontaminated by his findings on dishonesty. The injuries themselves were serious and had a continuing effect. There was also an element of the claim on behalf of innocent parties who gave their time, care and generosity in looking after the Claimant. Whilst the trial judge recognised that there was a ‘penal element’ to Section 57, he found it would be unjust to dismiss the whole claim. However, on appeal, it was held that the claim should have been dismissed in its entirety:

[43] The starting point is that s 57 only comes into play where the court finds that a claimant is genuinely entitled to some damages (s 57(1)(a)). Hence, in every case where the court goes on to find fundamental dishonesty ex hypothesi the claimant will stand to lose their genuine damages. But Parliament has provided in express terms that that should be so, subject to the question of substantial injustice. I quoted the Hansard material in Sinfield, [61], which makes that clear.

[44] I thus reiterate what I said in Sinfield, [65], which I quoted earlier and which was endorsed by HHJ Sephton QC in Iddon, [98], namely that substantial injustice must mean something more than the claimant losing their genuine damages.

[45] In light of this, it seems to me that the judge’s reasoning, in particular in [60], cannot stand. The two expressed reasons for finding substantial injustice were that part of the claim was genuine; and that others had provided past care. Neither reason is sufficient. The first reason is in conflict with Sinfield and Iddon and the plain purpose of s 57. The second reason is difficult to reconcile with s 57(2) which makes clear it must be the claimant – and not anyone else – who would suffer substantial injustice.

[48] Taking the same approach to this appeal, even on the assumption that there was some injustice to this Claimant (which I have found there was not), the same conclusion follows. The sustained nature of his dishonesty; the length of time for which it was sustained; and his involvement of others all make his dishonesty so serious that it would have outweighed any injustice to him.

[49] Counsel on this appeal were unable to refer me to any case which has defined the meaning of ‘substantial injustice’. I was not wholly surprised by that. To paraphrase US Supreme Court Justice Potter Stewart in Jacobellis v Ohio 378 US 184, 197 (1964), county court judges will generally, ‘know it when they see it’. But in this case, for the reasons I have given, I have concluded that the judge was wrong.

[50] In my judgment the judge should have dismissed the entire claim and awarded the Defendant its costs of the action (subject to s 57(4) and (5), which I will discuss in a moment).

[1]Woodger v Hallas [2022] EWHC 1561 (QB).


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