The beginnings of a test for substantial injustice?

  • Legal Development 2024年4月17日 2024年4月17日
  • 英国和欧洲

  • 保险和再保险

Section 57 of the Criminal Justice and Courts Act 2015 compels the Court to dismiss a claim, even though the claimant would be entitled to damages, where the Court is satisfied that it is fundamentally dishonest. S.57(2) goes on to state that the Court must dismiss the primary claim unless it is satisfied that the claimant would suffer ‘substantial injustice if the claim were dismissed’.

What is substantial injustice? This was the question Mr Justice Ritchie (Ritchie J.) faced in Kirsty Williams-Henry -v- Associated British Ports Holdings Ltd [2024] EWHC 806 (KB).  
On 21 July 2018 the claimant fell off Aberavon pier and suffered a severe brain injury as a result. Liability was not in issue as this had been settled at 2/3rds in the claimant’s favour. Ritchie J highlighted the three issues in question: 

  1. Whether the claimant had been fundamentally dishonest.
  2. The correct assessment of the quantum.
  3. If a finding of fundamental dishonesty was made, would dismissal of the claim cause substantial injustice to the claimant.  

In relation to points 1 and 2, the claimant was found to be fundamentally dishonest and the damages award was assessed at £596,704. This article explores the third issue; substantial injustice and what this means. 

Prior to Williams-Henry, Knowles J had dealt with substantial injustice in LOCOGG v Sinfield [2018] EWCH 51 and Woodger v Hallas [2022] EWHC 1561, but no test had been established. In the latter case, he noted there was no defined meaning of ‘substantial injustice’ but that “…county court judges will generally know it when they see it.” In Sinfield, he considered that substantial injustice must mean more than the mere fact that the claimant will lose his/her genuine damages. Ritchie J. considers this interpretation to be incorrect because the deprivation of genuine damages is the penalty intended by Parliament, and to ignore “…the very dismissal which is the only operative cause of any potential injustice, is imposing a blindfold on the Judge which the Act itself does not impose.” His view is that s.57(2) prompts a Judge to balance all of the facts, factors and circumstances of a case to reach a conclusion about whether substantial injustice arises, and relevant factors are all of the circumstances and include:

  • The amount claimed compared to the amount awarded. 
  • The scope and depth of the claimant’s dishonesty. 
  • The effect of the dishonesty on the construction of the claim by the claimant and the destruction/defence of the claim by the defendant. This is be measured by considering all matters including the legal costs occasioned by the dishonesty. 
  • The scope and level of the claimant’s assessed genuine disability caused by the defendant. In the case of a very serious injury, would the deprivation of damages unjustly transfer significant care costs to the NHS, social services and the taxpayer?
  • The nature and culpability of the defendant’s tort.
  • The Court should consider what the Court would do in relation to costs if the claim is not dismissed. 
  • Has the defendant made interim payments? If yes, how large are these and can the claimant afford to pay them back?
  • What effect will dismissal of the claim have on the claimant’s life? 

The Judge applied each of the above factors to the case and concluded that dismissing the claim did not invoke the substantial injustice exemption. He had been faced with a claimant who, for financial gain, had lied and was unrepentant.

What could substantial injustice look like?

Given the absence of substantial injustice in this case, we are left with the question of what substantial injustice would look like. 
What if Ritchie J. had been faced with a claimant who owned up to their lies or showed remorse, or what if the defendant was extremely culpable or the claimant’s prognosis was bleak?

Untainting the tainted

The eight factors highlighted by Ritchie J. do not explicitly mention a remorseful claimant, but allusion to this was peppered throughout his judgment. 
When you consider Ritchie J.’s points 2 and 3 above, it may be that the effect of a backtracking claimant could trigger a finding of substantial injustice, an impact on not only the scope and depth of the dishonesty but also on the construction and defence of the claim.
If you look at the parts of the judgment addressing fundamental dishonesty, Ritchie J. often refers to the claimant’s commitment to the deception: “What I find remarkable about this witness statement is that the claimant continued to maintain that she had never lied.” In para. 173, he lists 19 instances of where the claimant has fabricated and exaggerated elements of her claim. 
This leads us to speculate on whether there is a point of no return for a dishonest claimant. Can they redeem what they have tainted, and is it too late if they come clean in the courtroom? It remains to be seen what will happen in the case of a defendant who applies for a finding of fundamental dishonesty after the claimant has dropped the dishonest parts of their claim following disclosure of incriminating evidence.

Why should the taxpayer carry the cost?

Ritchie J.’s point 4 noted the claimant’s genuine disability and considered the impact on the NHS, social services and taxpayer. Is it a substantial injustice to deprive a dishonest claimant of damages to cover significant, albeit genuine, future care costs?  
What is interesting is that this factor appears to shift appreciation of who the sufferer of substantial injustice is, from the claimant to the taxpayer. After all, the claimant will receive care and treatment in any event; the substantial injustice here is to the NHS, social services, and taxpayer. 
S.57(2) only has the claimant’s substantial injustice in mind (“…the claimant would suffer…”) and it is questionable to suggest that receiving publicly funded care, instead of privately funded care, is an injustice to the dishonest claimant. 

An extremely culpable defendant

The defendant in this case was on the lower end of a culpability scale, but what if several people had been injured in the past due to the same defect which the defendant had neglected to rectify? A court is faced with a competing issue – it doesn’t want to reward the claimant’s dishonesty, but should an egregious defendant escape unscathed?
This is potentially one of the stronger hypotheticals for substantial injustice; could it be argued that a dishonest claimant should recover the ‘honest’ part of their claim if the defendant has also come to court with unclean hands? 

The issue of interim payments. 

This seems to be the point of potential injustice. It was Ritchie J.’s view that requiring the claimant to repay £75,000 – when taken in the context of the dismissal – could be an injustice as she would “…then be homeless, jobless, depressed, and suicidal.” 

The question of whether such a repayment order would be a substantial injustice was not addressed, but it is worth mentioning here. If you consider the scenario of a thief who has stolen an item, it is surely a stretch to say that the requirement to return that item to its rightful owner is an injustice to the thief. 

However, given that a Judge can just refuse to make the order of repayment, it is difficult to imagine a scenario where the fact of interim payments would trigger the issue of substantial injustice. 

Impact on the claimant’s life

Ritchie J. was faced with a claimant who threatened suicide on a finding of fundamental dishonesty, but he found that her mental state and inability to pay her mortgage resulted from her own dishonesty, not the index accident. Despite the threat of suicide, substantial injustice was not triggered. 

What impact on their life would a claimant need to show in order to trigger substantial injustice? The dismissal of a claim is never going to have a positive impact, but it seems that a claimant will need to show a definitive and negative impact above and beyond the punitive consequences clearly envisaged by s.57. 

In conclusion - the point behind s.57 and a balancing act for substantial injustice

S.57 needs to have bite and if substantial injustice is easily triggered, that bite is diminished. It is clear however that subsection (2) recognises a situation where it may not be appropriate to dismiss the claim in its entirety. The parameters of that situation remain unclear, but we are now beyond ‘you’ll know it when you see it’. 

The dishonest claimant will have to tip the scales in their favour with reference, in essence, to redeeming factors to their credit and/or detrimental factors to the defendant’s discredit. The weight attached to each factor will be very much case-specific, and not all eight factors will be applicable in every case.

In Ritchie J.’s eight factors, we have the beginnings of a test but it will only become fully formed through practice and precedent; substantial injustice remains the exception and not the rule.