Striking out exaggerated claim at trial - Supreme Court decision Fairclough Homes v Summers

Can a court strike out the entirety of a claimant’s claim at trial because he has grossly exaggerated his claim, even if he was properly entitled to damages that the trial judge could fairly assess?  The Supreme Court in Fairclough Homes -v- Summers has held that it can in theory, overturning previous Court of Appeal decisions to the contrary.   

In this case, a personal injury claimant claimed damages of £838,616, claiming he was unable to work due to an injury sustained in May 2003.  The defendant obtained video surveillance evidence in October 2007 which indicated that the injuries were much exaggerated. Nevertheless the claimant maintained that he was still unable to work. At trial in January 2010, the judge found that the claimant had exaggerated his injuries and that he could have got back to work at the end of June 2007. The claimant was awarded £88,716.76, but defendant argued that the court should have struck out the whole of the claimant’s claim on the ground that it was tainted by fraud and was an abuse of the court’s process.

Whilst the Supreme Court has said the court does have the power to do this, it has said that this power should only be exercised where it is just and proportionate to do so, which is likely to be only in very exceptional circumstances.  It said that it was “very difficult indeed to think of circumstances in which such a conclusion would be proportionate”, although such circumstances might include a case where there had been a “massive attempt to deceive the court but the award of damages would be very small”.  There were however many other ways in which fraudulent claims could be deterred:

  •     Ensuring that the dishonesty does not increase the award of damages – a dishonest claimant’s evidence is likely to be rejected unless supported by other evidence, so that damages are likely to be lower than if he had been honest (as was the case here)
  •     Making orders for costs – it is entirely appropriate for the claimant to pay the costs caused by his fraud or dishonesty on an indemnity basis (a higher basis than the usual standard basis which means that the defendant would get more of its legal costs back)
  •     Reducing interest that otherwise might be awarded to a claimant
  •     Proceedings for contempt – the defendant can apply to commit the claimant to prison for contempt of court.  The trial judge here refused to do so, but the Supreme Court said that if this had been appealed, it would have had “every prospect of success”
  •     Criminal proceedings – the judge can refer the matter to the CPS or the DPP to consider bringing criminal proceedings against the claimant.


For a copy of the Supreme Court’s judgment in this case, visit http://www.bailii.org/uk/cases/UKSC/2012/26.html
 

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