Court rules on 'Fundamental Dishonesty'

Qualified One Way Costs Shifting was introduced as a part of the Jackson reforms back in April 2013. The principle being that a losing Claimant would not be held liable for the Defendant's costs save for in specified circumstances.

One of those circumstances was where the Claimant was found to be 'fundamentally dishonest'. Since the introduction of QOCS, there has been some doubt as to what constitutes 'fundamental dishonesty'.

The recent case of Nesham v Sunrich Clothing dealt with the allegation of fundamental dishonesty, with the Defendant arguing that the Claimant had been a liar in circumstances where he lost at trial.

​District Judge Charnock-Neal held that "the Claimant gave me his version of events. I have preferred not to accept that version, but it does not necessarily follow that he was fundamentally dishonest".

​The Defendant appealed and the judgment of DJ Charnock-Neal was upheld by HHJ Freeman. HHJ Freeman stated "Up and down the country on a daily basis, judges are being asked to decide whose account of a road traffic accident is more reliable. And it is the experience of everybody who litigates in this field that drivers' involved in an accident will give different and contrary versions of accidents to the extent of not just what lane they were in, but where they came from , the route they had taken and so forth.... which may not constitute dishonesty, far less fundamental dishonesty".

​The appeal failed and the Defendant was ordered to pay costs of the appeal.

​It is still unclear exactly what constitutes fundamental dishonesty, but this judgment is evidence that it must be something greater than simply losing at trial on the basis that the judge prefers the Defendant's version.