CHAPTER TWO – THE MEANING OF “DISHONESTY”
Ivey v Genting Casinos UK Ltd [2017] UKSC 67
In Ivey v Genting Casinos UK Ltd [2017] UKSC 67, the Supreme Court expounded the test which is to be applied when the Court is determining whether a person has acted ‘dishonestly’.
Facts
Phil Ivey is a well-known and highly successful professional gambler. Over two days in August 2012, he deployed what was described by the Court as a “highly specialist” technique called ‘edge-sorting’ when playing the card game Punto Banco Baccarat at the Defendant’s casino. The game is not normally, to any extent, a game of skill; it is simply a game of luck.
Broadly speaking, ‘edge-sorting’ works as follows. As a result of the manufacturing process of certain patterned playing cards, whilst the backs of the cards appear essentially identical, there are in fact very slight (described by the Supreme Court in this case as “sub-millimetric”) differences between individual cards in that the pattern on the back is not precisely symmetrical. Accordingly, the pattern on the back [in the instant case a white circle broken by two curved lines] is, to that very limited extent, closer to one long edge of the card (edge A), than it is to the other long edge (edge B). Given that, before it is dealt from a card shoe, a card sits face down at the bottom of the shoe displaying one of its two long edges, it is thus possible for a sharp-eyed person sitting close to the shoe to see which long edge (whether edge A or edge B) it is. Of course, simply knowing which edge is displayed tells a gambler nothing about the value of the next card in the shoe. In order for the technique to be useful, the cards need to be sorted in some way.
As Mr Ivey played through the shoe of cards and under the guise of ‘trying to improve his luck’, he requested that the croupier rotate certain cards which had been dealt (those which were statistically more likely to result in a winning hand when the shoe was subsequently played through again) in a particular way, before they were reinserted into the shoe. Given that statistically advantageous cards had thus all been unknowingly sorted in a particular fashion by the croupier, when the shoe was subsequently replayed, Mr Ivey was able to deploy the “edge-sorting” technique to identify (as a result of the very slight differences between edge A and edge B) which of the cards that had been dealt was statistically more likely to result in a winning hand, and bet on them accordingly. That process gave him a long-term advantage over the house of approximately 6.5% if the game was played perfectly accurately.
Over the course of his playing, Mr Ivey won approximately £7.7 million.
The casino declined to pay, taking the view that what he had done amounted to cheating. At trial, Mr Ivey frankly admitted that he had engaged in ‘edge-sorting’, and maintained that he was not cheating but rather, deploying a perfectly legitimate advantage. He considered he had done nothing unlawful and that he was not cheating.
Decision of the Supreme Court
Lord Hughes considered the position of ‘dishonesty’ and analysed the differences between the test (as it then was) applied in the criminal law, and civil law; at [62] – [63] he held:
“62 Dishonesty is by no means confined to the criminal law. Civil actions may also frequently raise the question whether an action was honest or dishonest. The liability of an accessory to a breach of trust is, for example, not strict, as the liability of the trustee is, but (absent an exoneration clause) is fault-based. Negligence is not sufficient. Nothing less than dishonest assistance will suffice. Successive cases at the highest level have decided that the test of dishonesty is objective. After some hesitation in Twinsectra Ltd v Yardley [2002] 2 AC 164, the law is settled on the objective test set out by Lord Nicholls of Birkenhead in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378: see Barlow Clowes International Ltd v Eurotrust International Ltd [2006] 1 WLR 1476, Abou-Rahmah v Abacha [2007] Bus LR 220 and Starglade Properties Ltd v Nash [2011] Lloyd’s Rep FC 102. The test now clearly established was explained thus in the Barlow Clowes case, para 10 by Lord Hoffmann, who had been a party also to the Twinsectra case:
“Although a dishonest state of mind is a subjective mental state, the standard by which the law determines whether it is dishonest is objective. If by ordinary standards a Defendant’s mental state would be characterised as dishonest, it is irrelevant that the Defendant judges by different standards. The Court of Appeal held this to be a correct state of the law and their Lordships agree.”
63 Although the House of Lords and Privy Council were careful in these cases to confine their decisions to civil cases, there can be no logical or principled basis for the meaning of dishonesty (as distinct from the standards of proof by which it must be established) to differ according to whether it arises in a civil action or a criminal prosecution. Dishonesty is a simple, if occasionally imprecise, English word. It would be an affront to the law if its meaning differed according to the kind of proceedings in which it arose. It is easy enough to envisage cases where precisely the same behaviour, by the same person, falls to be examined in both kinds of proceeding.”
In determining the appeal, the Supreme Court was required to consider what test should be applied when considering whether a particular claimant had been “dishonest”. Lord Hughes confirmed at [74]:
“These several considerations provide convincing grounds for holding that the second leg of the test propounded in R v Ghosh [1982] QB 1053 does not correctly represent the law and that directions based upon it ought no longer to be given. The test of dishonesty is as set out by Lord Nicholls in Royal Brunei Airlines Sdn Bhd v Tan [1995] 2 AC 378 and by Lord Hoffmann in Barlow Clowes International Ltd v Eurotrust International Ltd [2006] 1 WLR 1476, para 10: see para 62 above. When dishonesty is in question the fact-finding tribunal must first ascertain (subjectively) the actual state of the individual’s knowledge or belief as to the facts. The reasonableness or otherwise of his belief is a matter of evidence (often in practice determinative) going to whether he held the belief, but it is not an additional requirement that his belief must be reasonable; the question is whether it is genuinely held. When once his actual state of mind as to knowledge or belief as to facts is established, the question whether his conduct was honest or dishonest is to be determined by the fact-finder by applying the (objective) standards of ordinary decent people. There is no requirement that the defendant must appreciate that what he has done is, by those standards, dishonest”.
The decision in Ivey marked an important harmonisation of the civil and criminal law vis-à-vis the relevant test for ‘dishonesty’, and represented a significant departure from the previously understood position following the criminal case of R v Ghosh [1982] QB 1053, CA, in which a two stage test for dishonesty was expounded requiring answers to the questions: (i) whether the conduct complained of was dishonest by the lay objective standards of ordinary reasonable people; and; (ii) whether the person whose conduct was being considered must have realised that ordinary honesty people would so regard his behaviour. Only if the answer to both questions was ‘yes’ would a person, applying the Ghosh test, have previously been found to have been dishonest. Ivey confirms the erroneousness of that two-staged approach – there is only one, objective standard to be applied; there is no secondary ‘subjective’ limb to the test.
Examples of Cases involving Claimants with Genuinely Held Beliefs
There are a number of examples in the reported cases of Claimants being found to hold particular beliefs, notably as to the supposed extent of their disability/limitations which, whilst rejected by the Courts, were nevertheless found to be genuinely held, such that no finding of dishonesty could arise on application of the Ivey v Genting Casino test. Such cases are, it is suggested, likely to be uncommon and will require careful scrutiny by the Judge hearing the matter. The following examples can be cited:
Aileen Brint v Barking, Havering and Redbridge University Hospitals NHS Trust [2021] EWHC 290 (QB)
Facts
The claim was one for clinical negligence arising from an extravasation injury following a CT scan with contrast carried out in December 2013 at the Defendant trust’s hospital, which the Claimant alleged had caused her significant disabling injury, including Complex Regional Pain Syndrome and Post Traumatic Stress Disorder and clinical depression. Liability, causation, and quantum were in dispute. There was no dispute that the claimant had suffered an extravasation injury, but there was considerable dispute about what had happened before, during and after her scan. The trial took place over 10 days. On the eve of trial, the Defendant notified the Claimant that it intended to allege she had been fundamentally dishonest in respect of the whole claim, or at least a substantial part of it.
The Judge noted that it was a case in which, “Much depends on whether or not I accept the claimant’s evidence” and that there had been an attack on her “…reliability and credibility on almost every issue in the case” (at [6]). He concluded that whilst the Claimant’s evidence had been largely consistent, he “…found her evidence on the whole to be unconvincing and unreliable” including her suggestion that she was fit, healthy and active before the incident (which was inconsistent with her extensive medical history (including, amongst others, Raynaud’s syndrome; auto-immune disorders including Sjogen’s syndrome and suspected lupus; a thyroidectomy; Hashimoto’s disease; osteoarthritis and significant ongoing back issues/pain) and that she had been in receipt of the highest rate of Disability Living Allowance (mobility component) (“DLA”) since 1992 – awarded as a result of ongoing back pain following a spinal fusion in 1989); her evidence as to what had happened at the hospital was, in many respects, at odds with the agreed expert evidence and in other respects was inherently improbable; and her description of the extent of her disability after the incident was brought into question not least by the evidence of the Defendant’s care expert (at [9]). The Claimant had not disclosed that she was in receipt of DLA until seen by the Defendant’s care expert and when asked about it, she said she had not thought it was relevant to her case because it related to her long-standing back problem. The Claimant also asserted during her evidence that she was not aware that her claim was for damages in excess of £1 million and that a large proportion of it related to claims for care and accommodation.
Decision on Breach and Causation
HHJ Platts (sitting as a Judge of the High Court) rejected the Claimant’s assertion that there had been a breach of duty in relation to the obtaining of consent; the performance of the CT scan; or the aftercare provided to her. Having thus determined that the claim must fail, the Judge, in any event, went on to consider (although perhaps more briefly than might otherwise have been the case) issues of causation because “…it is of importance to the parties, and it is potentially relevant to the allegation of fundamental dishonesty now raised by the defendant” (at [68]). The Judge noted (at [69]):
“The issues that fall for determination are whether the claimant has a disability in fact or whether she is feigning symptoms; and, if she has a disability, whether any of that disability has been caused by the events surrounding the CT scan or whether they have any other, independent, cause.”
The Judge noted that there was no dispute that an extravasation injury involving 20ml of contrast dye (as happened in the instant case) would normally have no long-term effect. The Defendant’s plastic surgeon opined that small volumes of contrast dye normally only provoked a mild inflammatory response involving a mild degree of swelling, some redness of the overlying skin and associated discomfort which normally fully resolves within 48 hours. The Claimant’s case was that it had a profoundly worse effect on her. The Judge observed that, although there was disagreement between the parties’ consultant pain and psychiatric experts as to the nature, cause and degree of the Claimant’s condition, they did all agree that it was “…an extremely complex case in relation to the claimant’s presentation before and after this incident” (at [71]).
The Judge held that, notwithstanding his conclusions on the Claimant’s lack of reliability generally, and some reservations he held about the true extent of her disability, he was satisfied that she probably was significantly disabled after the index events (at [77]). There were several aspects of the evidence the Judge highlighted in reaching that finding, including: (i) she had been relatively consistent in her complaints of symptoms; had been referred to the pain clinic and been investigated for, diagnosed with, and treated for CRPS by a multiplicity of clinicians, including by way of spinal stimulation – an expensive and invasive form of treatment; (ii) although she had been observed showing more function in her arm and hand than she had admitted, her level of function was probably variable and when explaining her symptoms to her treating clinicians she often stated them at their worst; although she described her left arm as “paralysed” (which was inconsistent with various other evidence the Judge accepted and might have been her way of describing her disability) she had not been deliberately withholding her true level of function from her treating clinicians or the experts who had examined her for the litigation. The Judge concluded that she had a genuine disability: the consistency and persistence of her complaints over many years together with the fact that they appear to have been accepted as suitable for investigation and treatment strongly supported the conclusion she was not feigning.
The Judge accepted that the Claimant probably did suffer with a degree of CRPS but with a significant psychological overlay, which probably included a somatic element – it was likely that there was an element of somatisation before the incident, and it was likely that it had become a component of the presentation post incident (at [85]). He also accepted that the Claimant suffered from PTSD and a depressive disorder (at [88]). However, particularly in light of the Claimant’s extensive pre-incident medical history, the Judge was not satisfied that there was any causal connection between the CT scan and the symptoms complained of (at [95] – [96]).
Fundamental Dishonesty
The Judge noted that, in light of his finding on liability (i.e. that the claim failed) the issue of ‘fundamental dishonesty’ did not arise in the context of s. 57 of the 2015 Act, but it was an important and serious allegation and would be relevant in relation to CPR r. 44.16(1).
It is instructive to set out the Judge’s observations on how and in what way, the allegation was advanced by the Defendant. HHJ Platts said at [99]:
“The defendant first informed the claimant that it intended to advance a positive case that she had been fundamentally dishonest on the eve of trial. The basis for the allegation became clear during cross examination and is repeated in closing submissions. The defendant relies on the claimant’s “incredible or unreliable” version of the events at the time of the scan; her “failure to give a satisfactory account of her benefits claim” and / or her “failure to give a satisfactory account of her long-standing multiple prior health conditions in her witness statement and to the experts instructed in her case.” I have already found that her evidence about the events at the time of the scan and about her prior health condition was unreliable and that her evidence about the benefits claim was unsatisfactory.”
At [101], HHJ Platts held that he was satisfied that, “…despite the overall unreliability of her evidence, she genuinely believes that the case she advances is true and I am not persuaded that she has been dishonest.” The Judge relied on a number of factors which he considered relevant:
- The allegation of dishonesty came “extremely late in the litigation. It is not a case when the spectre of dishonesty arose during the live evidence. The defendant knew the claimant’s account of the scan and her view of her prior condition when her witness statement was served. It knew that the claimant had made a claim for benefits claim when it was disclosed to Mrs Savage in 2019. The lateness of the positive averment, in my judgment, suggests that it was not considered to be an appropriate allegation to be made until the start of trial. I have not seen anything which justifies the change of approach.”;
- The Judge had rejected the Defendant’s psychiatrist’s view that the Claimant may be suffering from a facetious disorder: until that had been raised, none of the experts in the case and none of the Claimant’s treating clinicians had accused her of being dishonest in her presentation.
- He rejected the suggestion the Claimant was motivated by financial gain.
- The Claimant made prompt and consistent complaints about her treatment in the index event; it was highly unlikely that she invented those complaints within such a short space of time and remained so consistent about them thereafter if they were pure invention. The Claimant had probably conflated the index event with an earlier event in 2010 in her own mind.
- The Claimant’s own description of being ‘fit and healthy’ pre-incident accorded with her perceptions of the effect of her (pre-existing) conditions on her within the limitations of her health.
- Although her failure to be fully frank from the outset about her receipt of DLA was of more concern, the Judge accepted her evidence that she thought it was irrelevant because it related to her back problems about which she was not making a direct claim. Furthermore, it was relevant that she had never actively denied receiving DLA and had volunteered the information herself to the Defendant’s care expert.
- The highest the Defendant put its case was that the Claimant had ‘failed to give a satisfactory account’, which was very different from giving a false account.
- The Claimant’s evidence had to be seen against the background of her psychological profile [discussed in the case].
- The Judge’s impression of her as a witness who he saw and heard cross-examined for one and a half days when all such matters were put to her was that “…she was not a dishonest person. She has a genuine and significant disability which she firmly believes has been caused by the events of the 29th December 2013”.
HHJ Platts concluded at [102]:
“This has been an extremely complex case. However, when I stand back and look at the totality of the evidence I am far from persuaded that the claimant has deliberately made up events that did not occur or that she has deliberately told lies about her condition in order to advance her claim. Applying the two-stage test, I am satisfied that the claimant genuinely believed in the truth of the evidence that she gave and that, applying the standards of ordinary decent people I find as a fact that although her evidence was wholly unreliable in the sense that I do not accept it, she has not been dishonest. I therefore reject the allegation of fundamental dishonesty.”
Comment
It is interesting that HHJ Platts considered both limbs of the Ivey test; he was clearly not obliged to do so: having found that Mrs Brint had a genuinely held belief in the truthfulness of the evidence she gave she could not have been found to be dishonest. No doubt HHJ Platts’ comments on the second limb of the test were a classic ‘belt and braces’ approach.
It is notable in Brint that the Claimant had a complex pre-accident history (physical and psychological) and was held by the Judge to be suffering from various injuries and symptoms – although ones which were not causally related to the accident. In that sense, it might be thought that Brint is an example of a Claimant genuinely (but wrongly) ‘misattributing’ symptoms to the relevant events said to give rise to the claim for compensation. Such a conclusion could clearly not be reached where a Court found that a Claimant was not suffering with the alleged injuries, at all, or where the Court found they had been grossly exaggerated.
The factors specifically identified as relevant by HHJ Platts in forming his conclusion on dishonesty are noteworthy, and represent useful touchstones be borne in mind when considering what features Judges might be invited to consider when assessing whether a witness genuinely believes the evidence they have given, in particular:
- The emphasis on the fact that none of the experts, or treating clinicians had suggested the Claimant was being dishonest;
- Whether a Claimant is/is not motivated by financial gain;
- In relation to the omission of relevant (indeed, highly relevant) information (i.e. the DLA payments) – the Claimant had not actively denied receiving those sums and had, herself, volunteered the information. As always, a witness’s reasons for failing to volunteer such information earlier will be critical.
Marwan Elgamal v Westminster City Council [2021] EWHC 2510 (QB)
Facts
The claim arose out of an accident on 27th January 2012 at the Defendant’s gym. At the time of the accident the Claimant was aged 22 and had been heavily involved in ‘free running’ and parkour. In 2008 he had competed in the ‘free running’ World Championships and was ranked 8th in the world. He had worked on a number of film projects as a trainee stunt man, and it was his intention to qualify as a stunt man and then develop his career in that role.
The Claimant injured himself on equipment known as an ‘air track’; he performed a flip, landed awkwardly and violently twisted his left knee, sustaining a complex multi-ligamentous disruption.
Liability for the accident was agreed between the parties on a 65%/35% split in the Claimant’s favour.
The Claimant underwent a serious of operations to reconstruct the knee. Despite those procedures it was agreed between the experts that he continued to have laxity of the ACL and posterolateral corner with some loss of movement. Symptoms of instability would not improve without further surgical management, but the Claimant was reluctant to undergo further surgery, which the experts agreed was not a failure to mitigate his losses.
There was no dispute that the Claimant’s injury would prevent him from any potential career or earnings as a stunt man. The experts agreed that he would permanently be unable to undertake employment which involved heavy lifting, kneeling or squatting; he was capable of employment of a sedentary and light manual capacity; he was capable of using public transport to reach his place of employment, including during hours when such transport was busy; on the basis of his claimed symptoms he reasonably required assistance for activities which involved kneeling or squatting; and he would be unable to return to recreational or energetic sporting activity that required sudden twisting or pivoting manoeuvres.
The Defendant had obtained, and relied upon, surveillance footage which formed a central part of their case at trial. It was taken some years post-accident including on the same day as the Claimant was examined by the Defendant’s orthopaedic expert, Mr Unwin, for the second time. On the basis of the footage, the experts agreed that the Claimant was capable of walking normally, using a staircase and using public transport. They agreed that there was no evidence that he could squat, kneel or twist his left knee, and that his symptoms did not prevent him from his current freelance work which was of a sedentary and light manual capacity.
The agreement between the experts that the Claimant was capable of walking normally, using a staircase and using public transport during busy hours was relevant to the Defendant’s case on fundamental dishonesty. As noted by Mr Unwin in the joint expert report there was a ‘discrepancy of the video surveillance footage and both Mr Lamba’s [the Claimant’s expert] and Mr Unwin’s examination findings at the time of their first reports in respect of his antalgic gait’. The Claimant had, when seen by the experts on earlier occasions, had a noticeable limp.
At the time of the first examination with the Defendant’s expert, the Claimant reported inter alia that he had pain, instability and loss of movement at the left knee; he was fearful of crowds and rush hour traffic on public transport for fear of his knee being knocked and giving way; his knee was very weak and that he had lost movement; he could only walk for approximately 20 minutes on the flat before experiencing significant pain which stopped him walking further; traversing staircases was problematic and he could not use them normally, having to rely on a banister/rail; he found it difficult to enter and exit a car.
The Defendant’s expert commented in his first report (before seeing the surveillance) that: at no stage had the Claimant attempted to exaggerate his symptoms or signs in any way or form; that the Claimant walked with an abnormal gait which was antalgic at the left knee; and that the Claimant’s symptoms of instability on day-to-day activities were in excess of what he would reasonably expect in the presence of modest laxity of the posterolateral corner and ACL – patients with such a condition did not experience symptoms of instability on day-to-day activities such as walking on staircases and using public transport. At the time of the Claimant’s second examination with Mr Unwin (also prior to the expert seeing the video surveillance) he continued to complain of ongoing pain, instability and loss of movement; walking distance remained reduced to 20 minutes on the flat; he continued to have difficulties entering and exiting a car. In his second report Mr Unwin commented that at no stage did the Claimant attempt to exaggerate his symptoms or signs in any way; that the Claimant no longer walked with an abnormal gait; and that he was able to traverse a staircase relatively normally.
In Mr Unwin’s third report (commenting on the surveillance and other documents) he concluded that the Claimant was functioning at a significantly better capacity than that suggested by the Claimant at the time of his first and second reports, as well as to others in the medico-legal process [other doctors or professionals who saw the Claimant limping or to whom the Claimant described problems and symptoms in accordance with those described to Mr Unwin]. Mr Unwin contrasted the issues with walking and a limp (as reported in his first report) with the surveillance footage taken on the same day, which clearly showed no limp and the Claimant’s ability to walk freely. The footage also showed that, on the day, he could enter and exit a car freely and was able to use a staircase freely, despite the Claimant’s assertions that he was unable to do so. Mr Unwin observed that there was a ‘significant discrepancy’ between the symptoms and signs claimed by the Claimant at the time of his first and second reports, and that of the later, documentary evidence. Mr Unwin advised that, “Mr Elgamal is claiming symptoms and signs that are not part of his normal day-to-day life and that are claimed for the purposes of medico-legal gain”.
After service of the surveillance evidence, the Claimant produced a further witness statement, the thrust of which was that he made efforts to appear ‘normal’ in terms of his presentation to the world; his body paid the price after making such efforts. He accepted the footage was seemingly at odds with some of the medical evidence but refused “as far as possible to present to the world as physically disabled or needy”; he was the sort of person who ‘ploughed on’.
At the time proceedings were issued, the Claimant relied on a Schedule of Loss seeking damages of £405,997.43 excluding a sum in relation to general damages for pain, suffering and loss of amenity. The principle claims were for: (i) past loss of earnings: £67,576.99; (ii) past care and attendance: £10,522.50; (iii) future loss of earnings (£20,000) and future loss of opportunity (£307,000): £327,000 [pleaded on the basis that the Claimant had not been able to hold down regular employment due to the accident and operations, but that he was hoping to have recovered sufficiently enough to be able to return to full-time regular work. A provisional future loss of earnings of up to £20,000 was estimated with a more accurate figure to be provided in due course].
About 5 months after the surveillance was disclosed, the Claimant served an updated Schedule of Loss seeking £735,000. His claim thus increased significantly notwithstanding the surveillance. His updated claim included: (i) a claim for general damages for pain, suffering and loss of amenity of £92,000; (ii) past loss of earnings: £227,000 [increased due to the passage of time and significantly greater figures for stunt man earnings which, on the Claimant’s case, he said he would have enjoyed]; (iii) past care and assistance: £19,662 [increased due to the passage of time] (iv) future loss of earnings: £338,100; plus three ‘new claims’: (v) CBT therapy: £3,500; (vi) additional costs of an automatic car: £15,682 [albeit this claim was not supported by the experts and was not pursued at trial]; and (vi) future care: £30,780.77.
In response, the Defendant’s Counter Schedule advanced a figure for general damages of £12,000, and described the general damage sought by the Claimant as “grossly overstated”.
The Defendant’s case on fundamental dishonesty did not focus on the past or future loss of earnings claims; it concerned the alleged exaggeration of the Claimant’s symptoms, including his manifestation of a limp when reviewed by Mr Unwin and others.
First Instance
At first instance, HHJ Murdoch awarded the Claimant £125,321.33 (net of the liability apportionment) including, inter alia, gross figures of: (i) general damages: £60,000; (ii) Smith v Manchester: £54,000; (iii) loss of congenial employment: £8,000; (iv) past loss of earnings: £33,000 (because the Claimant had not sufficiently mitigated his loss); (v) past care and assistance: £705; (vi) future CBT: £3,500; and (vii) future care and assistance: £5,773.
No future loss of earnings was awarded – the expert evidence was that employment as a stunt man would not have enabled the Claimant to enjoy a higher income than he was still able to achieve by doing other work.
After reviewing the surveillance footage, HHJ Murdoch said:
“Even if the claimant believes the limitations that he suffers with his knee now as compared to how he was prior to the accident, are the equivalent of a limp, it is clear that he presented to the doctor with something far more than is shown on the DVD. It must therefore follow that the level of limp exhibited to the doctor was an exaggeration”.
The Judge noted that at the time of his second examination with Mr Unwin, the Claimant was said to no longer be walking with an abnormal gait.
The Judge found that the Claimant was “exaggerating the ongoing effects of his injury” in particular noting: the Claimant’s ability to go up and down stairs without holding onto the banister; his ability to get in and out of a car without difficulty; his ability to walk at a fast pace without demonstrating an obvious limp; there being no evidence of him attempting to protect his knee or being aware of those around him (as demonstrated in footage of him on a London Underground tube). The Judge also accepted that pre-accident the Claimant was an ‘extraordinary athlete’ and that:
“The claimant may be exaggerating what the weakness in the knee prevents him from doing e.g. coming downstairs without holding the hand rail but it doesn’t mean that he doesn’t have a weakness in the knee and is therefore unable to return to more physical activities.
The medical evidence is likewise clear; he suffered a major injury to his knee that has required surgical intervention on a number of occasions and intense physiotherapy. Mr Unwin reports that in his experience patients who suffer such injuries do not usually display difficulties in normal day to day activities but would at extremes like playing sport or jumping. In my judgment Mr Unwin is absolutely correct and the DVD fully supports that opinion.”
In relation to the Claimant’s claim for general damages, the Judge described it as a “nasty knee injury” but also held that the Claimant had exaggerated the level of his ongoing disability.
HHJ Murdoch came to consider the issue of ‘fundamental dishonesty’. His conclusions, which it is necessary to set out in full in order to place the subsequent appeal in its proper context, were expressed as follows (emphasis added):
“What do I make of this claim?
The claimant clearly in his evidence believes that he is disabled to a greater extent than I have found. He gave clear evidence that he was making adjustments to get into the car that were not visible to me. From his perspective he was not lying.
However objectively he was exaggerating and so as a fact was lying.
It is not just a case of looking at what claimant claims v what he’s recovered. The reality of why he’s not recovered the major head of claim, future loss of earnings is the failure to produce the evidence to establish a difference between what a stuntman earns and sedentary employment. His lies played no part in this aspect of the case.
Although I have not accepted the level of his ongoing disability and therefore found there was an exaggeration; there was an exaggeration as to the level of the ongoing disability arising from a very serious base injury.
Those findings were not fundamental to this case. They certainly did not result in a reduction in general damages to the level the defendant submitted or indeed anywhere near that level, nor did they result in a loss of a Smith v Manchester award.
The claimant was thus not fundamentally dishonest and my awards stand.”
Appeal
The Defendant appealed against the trial Judge’s conclusion that the Claimant had not been ‘fundamentally dishonest’ in relation to his claim such that s. 57 of the 2015 Act was not engaged. The Defendant contended that HHJ Murdoch had found the Claimant to have been dishonest and that such dishonesty was fundamental; there had been dishonest exaggeration as to the true level of the Claimant’s disability; he had presented himself in a dishonest way to the doctors.
The Claimant’s eventual position before the High Court was that there had been no finding of dishonesty by the trial Judge, and that the appeal Court should not make such a finding; and that even if such a finding were made, any such dishonesty was not fundamental.
Jacobs J noted that the Defendant’s case on fundamental dishonesty did not focus on the past or future loss of earnings claims, for what his Lordship described as “good reason” – because the case of fundamental dishonesty concerned the alleged exaggeration of the Claimant’s symptoms including the manifestation of a limp, but there was nothing which suggested that such exaggeration, even if it existed, had any/any real impact on the claim for past and future losses being advanced (see: [19], [22] and [23]) This was, “not a case where the Claimant contended he was unable to work at all. Indeed, the claim asserted that the Claimant would, it was hoped, recover sufficiently to enable him to return to full time work” (at [22]). Jacobs J noted that the claim for future loss of opportunity as first pleaded (£307,000) comprised over 75% of the then total quantified claim. He observed that there was “no doubt” that the Claimant’s undisputed injury had put paid to his career as a stunt man, regardless of whether the Claimant was exaggerating a limp, or difficulties walking, or anything else.
Jacobs J also noted that the Judge’s award for general damages – £60,000 – was closer by some distance to the £92,000 figure which the Claimant had advanced in his Updated Schedule of Loss, than the £12,000 which the Defendant had argued was justified, leading his Lordship to observe, “It is clear that the judge did not accept the Defendant’s case, in its schedule of loss, that the PSLA claim was “grossly overstated”” (at [57]).
His Lordship noted the Defendant’s reliance, in its submissions on appeal, on paragraphs [62] and [63][1] of the decision of Julian Knowles J in London Organising Committee of the Olympic & Paralympic Games (in Liquidation) v Haydn Sinfield [2018] EWHC 51 (QB)[2]. The Defendant had focused on those paragraphs as if they “were a statutory definition of “fundamental””. There had been considerable focus, by the Defendant, on the words “potentially adversely affected” (as used by Julian Knowles J) in order to argue that the word “potentially” indicated that the Court:
“…is concerned not only with the claim that was actually put forward, but with the claim that might potentially have been put forward in light of the alleged dishonesty”. It was submitted that “…the need to focus on the potential adverse effect was important where there had been surveillance footage which, once disclosed, would have served to put a brake on the potential claims that might have been advanced in the absence of that footage” (at [69]).
Jacobs J summarised that the effect of this argument was that there could be fundamental dishonesty arising where “…a potentially much larger claim could have been advanced on the basis of dishonesty, even if it was never in fact advanced”.
That approach was rejected. His Lordship observed that the relevant statutory word is “fundamental”; that was the only statutory word. Paragraphs [62] and [63] of LOCOG should not be read as if they were a substitute for it. In any event, Julian Knowles J had indicated that he was seeking to capture the same idea as “going to the root” or “going to the heart” of the claim. Jacobs J considered that those expressions did sufficiently capture the meaning of “fundamental” in the case before him; the difference was between conduct which was “merely” dishonest[3] and ‘fundamental dishonesty’ (at [70]).
The Defendant’s argument based on the word “potentially” lost sight of the need for the dishonesty go to go the root of the claim. His Lordship observed at [71] that such an approach,
“…invites enquiry into what claims might have been advanced, even if they were not actually advanced. It is difficult to see how a claim which was not actually advanced can be said to have been fundamentally dishonest. Furthermore, it would lead in many if not most cases to the surprising conclusion that any dishonesty would qualify as fundamental, because of its potential to result in different or larger claims, even if such claims were not in fact made. I do not consider that the Locog case is to the contrary effect. Julian Knowles J was considering a dishonest claim for gardening expenses that was actually made. He was not considering dishonesty in the context of a claim that was not actually made, but which might theoretically have been made.
Jacobs J stated at [72] that,
“… the question of whether the relevant dishonesty was sufficiently fundamental should be, and is, really a straightforward “jury” question: as HHJ Harris QC said[4], it is a question of fact and degree in each case as to whether the dishonesty went to the heart of the claim. That must involve considering the dishonesty relied upon, and the nature of the claim – both on liability and quantum – which was actually being advanced.”
The Court was concerned with the “potential impact of the dishonesty on the claim actually made” (at [73]).
Importantly, his Lordship further observed at [73] (emphasis added):
“In the present case, where the dishonesty is alleged to have resulted in an inflated claim for a genuine injury arising from a genuine accident, it is necessary to consider the extent to which the alleged dishonesty resulted in an inflated claim; ie the extent to which the dishonesty, if not exposed, would potentially have resulted in a higher quantum of recovery in respect of the claims made. This in turn involves consideration of the various losses claimed by the Claimant, and the potential impact of the alleged dishonesty on the award for those losses.”
Jacobs J noted that in the case before him, the dishonesty had no material impact on the claim for lost earnings [past losses having been reduced for a failure to mitigate; and the claim for future losses being dismissed on the basis the expert evidence was to the effect that the Claimant would not have earned more being a stunt man than he was likely to obtain in employment which remained open to him].
Appeal Conclusion
Jacobs J first considered whether HHJ Murdoch had found the Claimant to have been dishonest at trial. His Lordship held that the Judge had not made such a finding (emphasis added):
- As the passage in paragraph [74] of Ivey shows, a finding of dishonesty depends initially upon a finding as to the state of an individual’s knowledge or belief as to the facts. This is a subjective question. If an individual genuinely believes that the facts are as he represents them to be, then there can be no question of dishonesty. That is so even if, on an objective view of the facts, they are not in accordance with the individual’s subjective belief.
- In the present case, the judge held that the Claimant clearly in his evidence believed that he was disabled to a greater extent than the judge had found. The judge went on to say that, from the claimant’s perspective, he was not lying. In my view, these findings negate a necessary requirement for a finding of dishonesty, since they can only be read as a finding that the Claimant had a genuine belief in the facts which he represented. That finding must relate both to the Claimant’s evidence in the witness box at trial, and statements to similar effect to doctors at an earlier stage. The judge did not find that the Claimant had (subjectively) lied to him in his evidence, or that he had (subjectively) lied in the statements that he made to doctors.
Jacobs J noted that HHJ Murdoch had made findings as to specific facts (whether the Claimant was subjectively lying) rather than simply drawing inferences from facts specifically found, and his Lordship declined to interfere and find dishonesty where the trial Judge had not done so.
In a stark reminder of the issues faced by Judges as first instance, Jacobs J observed at [97]:
“… Judges frequently hear from witnesses who have persuaded themselves as to the existence of certain facts, but where the judge takes a very different view. Such witnesses are not, or at least not necessarily, untruthful or dishonest.”
In any event, Jacobs J would have rejected the contention that any dishonesty (had there been any) was ‘fundamental’ (at [101] – [124])
Comment
This is a clear application of the first limb of the Ivey test. Despite HHJ Murdoch having found that the Claimant had exaggerated the extent of his ongoing injuries/disabilities, he also accepted that the Claimant genuinely believed that he was he was disabled to that greater reported extent. Accordingly, subjectively, he was not dishonest.
It is, perhaps, instructive to reflect on the fact that, pre-accident, the Claimant in Elgamal was, an extremely active and successful athlete, who clearly had a significant ‘baseline’ of physical capabilities; as well as the fact that he undoubtedly sustained a very nasty injury. That important high functioning pre-accident background, together with the Claimant’s explanations as to why the surveillance footage was, arguably, inconsistent with his reported functional abilities, no doubt went some significant way to satisfying HHJ Murdoch that the Claimant was not, subjectively, lying about his ongoing disabilities, but genuinely believed them to be true.
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[1] [62] In my judgment, a claimant should be found to be fundamentally dishonest within the meaning of s 57(1)(b) if the defendant proves on a balance of probabilities that the claimant has acted dishonestly in relation to the primary claim and/or a related claim (as defined in s 57(8)), and that he has thus substantially affected the presentation of his case, either in respects of liability or quantum, in a way which potentially adversely affected the defendant in a significant way, judged in the context of the particular facts and circumstances of the litigation. Dishonesty is to be judged according to the test set out by the Supreme Court in Ivey v Genting Casinos Limited (t/a Crockfords Club), supra.
[63] By using the formulation ‘substantially affects’ I am intending to convey the same idea as the expressions ‘going to the root’ or ‘going to the heart’ of the claim. By potentially affecting the defendant’s liability in a significant way ‘in the context of the particular facts and circumstances of the litigation’ I mean (for example) that a dishonest claim for special damages of £9000 in a claim worth £10 000 in its entirety should be judged to significantly affect the defendant’s interests, notwithstanding that the defendant may be a multi-billion pound insurer to whom £9000 is a trivial sum.
[2] Discussed in greater detail in Chapter 15 below.
[3] Per Martin Spencer J at [20] of Pegg v Webb [2020] EWHC 2095 (QB)
[4] In Rayner v Raymond Brown Group, Unreported,