Background

The pursuer sought £500,000 in damages following a low velocity impact accident at a petrol station. He claimed that the defender had reversed into his stationary car at low speed causing him nerve damage. He had been left with ongoing shoulder pain, shooting pains in his arm, tingling in his fingers, psychiatric injury and faecal incontinence. 

Liability was admitted by the defender. However the defender argued that the pursuer was exaggerating his symptoms for financial gain and was fundamentally dishonest. The defender argued that the pursuer had lied to medical experts about his symptoms and that he had lost his job due to injuries sustained in the accident. The defender led evidence at the original Proof that the pursuer had been on a final warning at work for misconduct, had lied to the insurance company to obtain a payment for damage to his car, and that he failed to disclose earnings for a second job where he received cash in hand. The defender sought to have the action dismissed (struck out) at the original Proof.

At the original Proof the defender was unsuccessful in this argument. The Trial Judge did not agree that the pursuer was fundamentally dishonest, but accepted that the pursuer's evidence had not been entirely credible and reliable. However, he concluded that the pursuer's lack of candour was not sufficient to deprive him of his entitlement to damages and awarded him damages of just under £7,500. However, the Trial Judge did find the pursuer liable for two thirds of the defender's expenses to reflect that the pursuer had presented various parts of his case with "a significant lack of candour". The defender appealed the Judge's refusal to dismiss the claim. The pursuer also appealed the Judge's award of expenses.

Appeal Court decision

The Scottish Appeal Court issued its decision earlier this month. The Inner House of the Court of Session was not satisfied that dismissal was appropriate or justified in this case. The Inner House observed that it was not disputed that Scottish Courts have the power, in appropriate circumstances, to dismiss an action on the grounds of fundamental dishonesty. However, as the power was draconian, it should only be used as a last resort. It was not appropriate to dismiss this case as the original Trial Judge had not found the pursuer to be fundamentally dishonest. Instead the Trial Judge found that the pursuer had "made a good, if exaggerated claim."

The Inner House did, however, uphold the original Trial Judge's decision on expenses, finding that the pursuer's "lack of candour" and conduct had extended the length of the Proof and that this should be reflected in an award of expenses to the pursuer's detriment.

Comment

What is clear from the Inner House's decision is that, if a pursuer exaggerates their claim, the Scottish Courts will not likely make a finding of fundamental dishonesty. This case demonstrates the problems in Scotland of defending fraudulent personal injury claims, and puts Scotland some way behind England where findings of fundamental dishonesty are becoming increasingly common in exaggeration and entirely fabricated claims.

Where there is a suspicion that a claim may be fraudulent, including exaggeration claims, investigations should be carried out as early as possible. Putting the other party and the Court on notice that a claim may be challenged on the basis of the pursuer's dishonesty at the earliest opportunity is also recommended. Where a defender intends to seek to have a claim dismissed on this basis, the Court should be asked to do so as early as possible.

Where a pursuer appears to be exaggerating his case, it is currently possible for the defender to lodge a "Tender" to offer protection in relation to expenses. However changes on the horizon in Scotland offer a glimmer of hope for those defending personal injury claim north of the border: the Civil Litigation (Expenses and Group Proceedings)(Scotland) Bill is currently proceeding through the Scottish Parliament. Once it becomes law, it will remove Qualified One Way Costs Shifting ("QOCS") protection from pursuers where a Court finds that a pursuer has made fraudulent representations, including exaggerating their symptoms.