The Court of appeal has ruled in the case of Howlett v Davies and Anr  EWCA Civ 1696 that a Defendant does not have to specifically plead fundamental dishonesty to apply for QOCS to be disapplied.
Lord Justice Newey confirmed that there was enough evidence within the pleadings of the Defendant's doubts over the Claimants' honesty to ensure that the Claimants' were not ambushed at trial.
It was found that it was not necessary for the Defendant to have alleged fundamental dishonesty in the pleadings for the judge to find that a witness was lying and to disapply QOCS.
This seems a sensible decision to me. It is important that each party has their cards on the table ahead of trial to avoid ambush, but the Defendant has to prepare a Defence at a point where not all the facts of the Claimant's case are known.
An allegation of fraud is a serious allegation to make and it must be open to a Defendant to raise issues over conduct without pleading fundamental dishonesty.
The Court can then consider the case pleaded by the Claimant against all the facts at trial and make a decision as to whether the Claimant has been fundamentally dishonest.
Interestingly, one of the issues raised by Counsel on behalf of the Defendant was that an allegation of fundamental dishonesty in the Defence would make it more likely that the matter would be allocated to the Multi Track. This shows just how much a Defendant insurer (in this case Ageas) will consider the costs liability when dealing with a matter.
Surely it is in the Defendants interests that a case they believe is potentially fraudulent be subjected to the greater scrutiny that an allocation to the Multi Track could bring. In my view, this is exactly what Defendant insurers should be doing, but it seems that they are content to attack the outcome rather than the cause of the problem.
In other news, the government are due to assess the progress of the Jackson reforms before the summer of 2018. The suggestion is that the exception on recoverability of additional liabilities afforded to mesothelioma cases is likely to be removed but that everything else is working well. Time will tell!