The case of Howlett v Davis was recently before the Court of Appeal following the Trial Judge, Deputy District Judge Taylor, finding the claim to be fundamentally dishonest and granting the Second Defendant, Ageas Insurance, permission to enforce a costs Order against the Claimants.

The Court of Appeal held that, despite the insurer not pleading fraud in its Defence, Deputy District Judge Taylor had been entitled to find that the Claimants’ personal injury claim allegedly arising from a road traffic accident was fundamentally dishonest, and that the exception to QOCS under CPR 44.16(1) therefore applied.

It was held that “Statements of case are, of course, crucial to the identification of the issues between the parties and what falls to be decided by the court. However, the mere fact that the opposing party has not alleged dishonesty in his pleadings will not necessarily bar a judge from finding a witness to have been lying.” Further, it was held that where an insurer has not put forward a substantive case of fraud but set out facts from which it invited the judge to draw the inference that the Claimant had not in fact suffered the injuries it was asserted, “it must be open to the trial judge… to state in his judgment… that the alleged accident did not happen or that the claimant was not present. The key question in such a case would be whether the claimant had been given adequate warning of, and a proper opportunity to deal with, the possibility of such a conclusion and the matters leading the judge to it rather than whether the insurer had positively alleged fraud in its defence.”

The court also approved the meaning of ‘fundamentally dishonest’ formulated by His Honour Judge Moloney QC, sitting in Cambridge County Court, in Gosling v Hailo 29 April 2014, (Cambridge County Court), as being one “which depended as to a substantial or important part of itself upon dishonesty”.