What is Fundamental Dishonesty Under CPR 44.16

Fundamental dishonesty under CPR 44.16 is the primary exception to qualified one-way costs shifting (QOCS) in personal injury litigation. Where a court makes a finding of fundamental dishonesty against a claimant, QOCS protection is disapplied, and the claimant becomes liable for the defendant’s costs in the usual way, potentially in full.

For defendants and their insurers, it is one of the most significant costs tools available in personal injury litigation. For claimants and their solicitors, understanding precisely where the threshold sits and how courts have applied it is essential when advising on litigation risk.

 

How QOCS Works and Why the Exception Matters

Qualified one-way costs shifting was introduced in April 2013 as part of the Jackson reforms. Its purpose was straightforward: to allow claimants in personal injury cases to pursue legitimate claims without the risk of being exposed to adverse costs orders if they lost.

Under the QOCS regime, a defendant who successfully defends a personal injury claim will generally be unable to enforce a costs order against the claimant unless one of the CPR 44.15 or CPR 44.16 exceptions applies. In practice, this means most unsuccessful claimants pay nothing toward the defendant’s costs.

CPR 44.16 changes that position entirely where fundamental dishonesty is established. A finding of fundamental dishonesty strips the claimant of QOCS protection and allows the defendant to enforce a costs order against them – up to the full value of any damages awarded, or beyond if the claim is dismissed entirely.

The stakes are therefore high. A claimant who loses on fundamental dishonesty grounds may face a significant costs liability where they would otherwise have faced none.

 

The Legal Test: What Does “Fundamentally Dishonest” Mean?

The leading authority on the meaning of fundamental dishonesty remains Sinfield v Meade and, more significantly, the Court of Appeal’s judgment in LOCOG v Sinfield and the Supreme Court’s analysis in Summers v Fairclough Homes Ltd. However, the most widely applied definition comes from Gosling v Screwfix (Cambridge County Court, 2014), where His Honour Judge Maloney QC held that dishonesty is fundamental where it goes to the root of the claim, or a substantial or important part of it.

The Criminal Justice and Courts Act 2015 reinforced this framework significantly. Section 57 of the Act introduced a mandatory strike-out power for fundamentally dishonest personal injury claims brought under the Act, requiring courts to dismiss the entire claim for damages where fundamental dishonesty is established, unless doing so would cause substantial injustice to the claimant.

The combined effect of CPR 44.16 and section 57 of the Criminal Justice and Courts Act means that a claimant found to have been fundamentally dishonest faces not only the loss of their damages but the full exposure to the defendant’s costs.

 

What Courts Look For: The Substantial or Important Part Test

The threshold question in any fundamental dishonesty argument is whether the dishonesty went to the root of the claim, or at a minimum, to a substantial or important part of it.

Courts have consistently drawn a distinction between:

• Fundamental dishonesty – where the claimant has fabricated or grossly exaggerated the primary basis of the claim, or a substantial or important part of it, in a way that undermines the integrity of the proceedings as a whole.
• Mere exaggeration – where a claimant has overstated their losses or symptoms to some degree, but the core of the claim remains genuine and honest

A district judge dealing with a fundamentally dishonest claim is not required to find that every aspect of the claim was dishonest. Where a claimant has a genuine underlying injury but has substantially exaggerated its severity or duration, the court will need to assess whether that exaggeration was so significant that it constituted dishonesty going to a substantial or important part of the claim.

The finding of fundamental dishonesty must be made on the balance of probabilities. It is not a criminal standard, but it is a serious finding, and courts have been careful not to apply the label lightly.

 

The Costs Order Consequences

Where a finding of fundamental dishonesty is made under CPR 44.16, the court has discretion to disapply QOCS protection and make a costs order against the claimant. In practice, this means:

• The defendant can enforce their costs order against the claimant directly
• The costs order can be set off against any damages awarded to the claimant
• Where the claim is dismissed entirely under section 57 of the Criminal Justice and Courts Act, the claimant faces the full costs liability with no damages to offset it

The financial consequences for a claimant found to have brought a claim for damages can therefore be severe, particularly in higher-value personal injury cases where the defendant’s costs are substantial.

 

Practical Implications for Solicitors

For solicitors acting for defendants and their insurers, fundamental dishonesty arguments require careful preparation. A successful finding requires clear evidence, typically surveillance footage, medical records, social media evidence, or witness testimony, that demonstrates the dishonesty went to a substantial or important part of the claim rather than representing mere overstatement.

For claimants’ solicitors, the risk is real and worth addressing with clients early. Where there is any concern that a client may have overstated their symptoms or losses, the implications of a CPR 44.16 finding need to be clearly communicated – including the potential costs exposure if QOCS protection is lost.

At the costs assessment stage, where a finding of fundamental dishonesty has already been made, the focus shifts to quantifying the defendant’s recoverable costs and ensuring they are properly presented and supported in the bill of costs.

 

Key Takeaways

• Fundamental dishonesty under CPR 44.16 disapplies QOCS protection and exposes claimants to full costs liability
• The test is whether the dishonesty went to the root of the claim or a substantial or important part of it
• Section 57 of the Criminal Justice and Courts Act 2015 reinforces the framework with a mandatory strike-out power
• A finding of fundamental dishonesty must be established on the balance of probabilities
• The costs consequences can be severe, particularly where the claim is dismissed, and no damages are awarded to offset the costs order

 

Frequently Asked Questions

What is fundamental dishonesty under CPR 44.16?

Fundamental dishonesty under CPR 44.16 is a finding by the court that a claimant has been dishonest in a way that goes to the root of their claim, or a substantial or important part of it. Where such a finding is made, the claimant loses their QOCS protection and becomes liable for the defendant’s costs.

What is the difference between fundamental dishonesty and exaggeration?

Exaggeration alone does not necessarily amount to fundamental dishonesty. The dishonesty must go to the root of the claim or a substantial or important part of it. A claimant who has a genuine underlying injury but has overstated its impact may or may not cross the threshold – it depends on the degree and significance of the exaggeration.

Does fundamental dishonesty apply to all personal injury claims?

CPR 44.16 applies to all claims subject to QOCS, which covers most personal injury litigation in England and Wales. Section 57 of the Criminal Justice and Courts Act 2015 applies specifically to personal injury claims brought under that Act and imposes a mandatory strike-out obligation where fundamental dishonesty is established.

What evidence do courts look for in a fundamental dishonesty finding?

Courts typically consider surveillance evidence, inconsistencies in medical records, social media activity, witness evidence, and the claimant’s own account given at different stages of the proceedings. The evidence must demonstrate that the dishonesty went to a substantial or important part of the claim rather than being peripheral.

What are the costs consequences of a fundamental dishonesty finding?

Where QOCS protection is disapplied under CPR 44.16, the defendant can enforce their costs order against the claimant directly. Any damages awarded can be offset against the costs liability. Where the claim is struck out entirely under section 57 of the Criminal Justice and Courts Act, the claimant faces the full costs order with no damages recovery to offset it.

 

Speak to Greener Costs Today

Fundamental dishonesty findings have significant costs consequences, both for defendants seeking to enforce costs orders and for claimants facing unexpected liability. Getting the costs element right, whether that means preparing a robust bill of costs following a successful finding or advising on the costs exposure involved, requires specialist expertise.

At Greener Costs, our costs lawyers regularly assist solicitors on both sides of fundamental dishonesty proceedings, from preparing and defending bills of costs through to advising on the likely costs exposure where a CPR 44.16 finding has been made or is anticipated.

Get in touch today on 01204 263047 or email info@greenercosts.co.uk to speak with one of our specialist costs lawyers.