Fundamental Dishonesty: To plead, or not to plead? That is the question.

Published: 12/04/2021 | News

On Friday, 12th April 2021, Master Davison handed down a reserved judgment in the case of Mustard v Flowers & Ors [2021] EWHC 846 (QB).  The judgment provides useful guidance on the appropriateness of a speculative and/or contingent pleading of fundamental dishonesty in a defence.


The case concerned a road traffic accident.  The Claimant’s vehicle had been struck from behind by the Defendant’s car.  Breach of duty is not in dispute.  There is, however, a hotly contested argument as to the nature and extent of the Claimant’s injuries arising as a result of the collision: the Claimant alleges to have suffered a serious brain injury; the Defendant denies her having suffered any brain injury whatsoever.

The Defendant made an application to amend its defence to include an averment that:

[…] In the event that the Court finds that the Claimant has consciously exaggerated the nature and/or consequences of her symptoms and losses, the Third Defendant [the insurer] reserves the right to submit that a finding of fundamental dishonesty (and the striking out of the claim pursuant to section 57 Criminal Justice and Courts Act and/or costs sanctions including the disapplication of QOCS) is appropriate.”

The Claimant objected to that proposed amendment because, inter alia, it amounted to an allegation of fraud which was not properly particularised and for which there was, in fact, no basis in the evidence; such a pleading was not fair to the Claimant and was also contrary to Rule 9 of the BSB Code of Conduct which required “reasonably credible material which establishes an arguable case of fraud” before it could be pleaded.  The Defendant’s position was that it was not positively averring dishonesty but was simply alerting the Claimant to the nature of its case at trial.  It intended to explore in cross-examination whether the Claimant was consciously exaggerating her symptoms for gain and, if appropriate, apply under s. 57 CJCA 2015.  It was, the Defendant said, seeking to give the Claimant fair warning.


Master Davison reviewed the decision of the Court of Appeal in Howlett v (1) Davies (2) Ageas Insurance Limited [2017] EWCA Civ 1696 and the decision of HHJ Coe Q.C. (sitting as a Deputy High Court Judge) in Pinkus v Direct Line [2018] EWHC 1671.  From those cases the Master distilled the following principles (at [19]):

…it is open to the trial judge to make a finding of fundamental dishonesty whether that has specifically been pleaded or not.  To put that another way, an “application by the defendant for the dismissal of the claim” pursuant to section 57(1) of the 2015 Act does not require any particular formality.  In an appropriate case it could, for example, be made orally and perhaps at as late stage as the defendant’s closing submissions. But the factors governing whether the trial judge would then entertain it would be as set out by Newey LJ in Howlett, namely whether the claimant had been “given adequate warning of, and a proper opportunity to deal with, the possibility of such a conclusion and the matters leading the judge to it rather than whether the insurer had positively alleged fraud in its defence”.  Or, to adopt the language of HHJ Coe’s judgment in Pinkus, whether the claimant had had “sufficient notice” of the issues raised and the opportunity to deal with those issues by way of additional evidence, if necessary, including from his experts.”

The application to amend was refused so far as it related to the proposed wording set out above [although other amendments were permitted].  The Master gave three reasons for refusing permission (at [22]):

  • The amendment served no purpose – the Defendant could, if appropriate, make the application without having foreshadowed it in a pleading.  The wording proposed (a reservation of the right to apply for a finding and dismissal under s. 57) was unnecessary;
  • The amendment had no real prospect of success on the evidence presently available; and
  • It caused prejudice to the Claimant because the plea of fundamental dishonesty would need to be reported to the Claimant’s legal expenses insurers and opened up a possibility of them avoiding the policy ab initio; it would cause extra administrative burden and costs; and would raise further fear and anxiety of the Claimant at a time when there was no proper basis for the averment.

It is suggested the first of those reasons is particularly noteworthy.

The Master also highlighted that it would be professionally improper for a Defendant’s legal representative to allege fraud or fundamental dishonesty based upon mere suspicion, or upon a mere prospect that that is how the evidence might turn out.  There would, in the Master’s view, be many cases where it would not be practical or proper to require a Defendant to have made such an allegation prior to the trial in order to make an application under s. 57 (at [20]).

In concluding, the Master noted that nothing in the judgment should be seen as detracting from the modern “cards on the table” approach, and that where the Defendant had a proper basis for a plead of fundamental dishonesty and intends to apply under s. 57, then subject to any case management/trial directions, that should ordinarily be set out in a statement of case, or a written application, and that should be done at the earliest available opportunity.  The learned Master noted (at [24]):

What I am intending to discourage are pleads of fundamental dishonesty which are merely speculative or contingent.”


In the context of the claim itself, the decision seems like somewhat of a pyrrhic victory for the Claimant; the amendment was disallowed but (all things being equal) the Defendant will still be entitled to make the relevant application for dismissal of the claim at the conclusion of the trial.

However, the decision is important because it highlights when a Defendant can and should positively plead that it will seek a finding of fundamental dishonesty and dismissal under s. 57 CJA 2015, and when it should not.

Master Davison has confirmed the inappropriateness of pleadings of fundamental dishonesty which are speculative or contingent on the way in which the evidence may develop at trial: it is not appropriate to plead, for example, that the Defendant “may” invite the Court to make a finding of fundamental dishonesty; or to plead that the Claimant is “hereby put on notice” that such a finding might be sought etc.  Such pleadings have become more and more commonplace, when drafted by both solicitor and Counsel.  Clearly, such practices should now cease.

The point is reasonably simple: either the Defendant has sufficient evidence at the point the Defence is drafted that it is able to conclude that it will, in due course, apply for dismissal under s.57 – in which case it should be pleaded given the “cards on the table” approach; or it is not able to reach such a conclusion on the evidence currently available – in which case such a pleading should not be made.  The Defendant should, of course, continue to set out those matters of concern with the claim which give rise to the suggestion that it is not genuine and/or exaggerated etc., as well as the issues on which the Claimant will be challenged at trial, but a Defence should not as a matter of course plead that a finding of fundamental dishonesty will be sought.

The Master’s decision also perhaps provides a welcome and timely reminder as regards the professional obligations imposed on those drafting Defences which allege fraud/fundamental dishonesty – mere suspicion of dishonesty, or a prospect that the evidence will turn out a certain way at trial, is not enough.  Given the seriousness of the allegation care must be taken to ensure that the evidence is sufficiently compelling before dishonesty is alleged.

Defendants will need to think more carefully about whether they have enough credible material to plead fundamental dishonesty or not, and if not, how to subsequently go about ensuring sufficient notice of the intention to seek a finding of dishonesty (and the points to be made at trial) is given to the Claimant to avoid an allegation that the Claimant has been “ambushed”.  However, the judgment does not seem to be of any serious concern for Defendants.  It reiterates that the absence of a pleading of fundamental dishonesty is in no way fatal to the ability to seek such a finding provided, of course, that such matters are appropriately explored in cross-examination during trial and the Claimant is given the opportunity to deal with those issues; in fact, Master Davison rightly notes that in many instances, it would be inappropriate for such a pleading to have been made.

Jake Rowley is a member of the Farrar’s Building Personal Injury and Civil Fraud Teams.  Jake is the author of “Fundamental Dishonesty and QOCS in Personal Injury Proceedings: Law and Practice”.  Jake frequently delivers training, seminars and workshops upon request.  Please direct any such request to the Farrar’s Building Clerking Team.