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Summers v. Fairclough Homes Ltd.

Smart Summary

Factual and Procedural Background

On 16 April of this year, HHJ Tetlow assessed damages in a personal injury claim at approximately £88,000. Permission to appeal this assessment was granted to the appellant, who is the defendant in the original claim and is supported by an insurance company. The claimant was found to have fraudulently exaggerated his claim, a deception uncovered by the insurers through surveillance. The appellant sought to challenge the damages on the basis of the claimant's dishonesty.

Legal Issues Presented

  1. Whether a court has the power to strike out a personal injury claim entirely where the claimant has committed substantial fraud by exaggerating the claim.
  2. Whether the damages awarded should be reduced or set to nil due to the claimant’s dishonest behaviour despite an admitted genuine injury.
  3. Whether permission to appeal to the Supreme Court should be granted on the issue of striking out fraudulent claims.

Arguments of the Parties

Appellant's Arguments

  • The claimant was an "out-and-out liar" who fraudulently exaggerated his claim to a vast extent.
  • The fraud was discovered by insurers, but the claimant still recovered the full assessed damages of £88,000.
  • The appellant argued that the courts should take a strong stance against such dishonesty by striking out the claim entirely, resulting in the claimant receiving nothing despite a genuine injury.
  • The appellant’s counsel submitted that the proper legal response to such fraud was a "condign action" to stamp out dishonest behaviour.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Shah v Ul-Haq [2009] EWCA Civ 542 The court has no power to strike out a claim in its entirety due to claimant dishonesty; such a change must be made by Parliament. The court followed the lead judgment by Smith LJ, rejecting the appellant’s submission to strike out the entire claim despite fraud.
Arrow Nominees v Blackledge [2000] 2 BCLC 167 Addressed striking out claims in cases of fraud where justice cannot otherwise be done. The court found this case distinguishable as it involved a different context where fraud prevented justice, thus not applicable here.
Widlake v BAA Limited [2009] EWCA Civ 1256 Confirmed the approach in Shah v Ul-Haq regarding dishonestly exaggerated claims and costs. The court agreed with the prior ruling, reinforcing that dishonesty does not justify striking out the entire claim.
Rickards v Rickards [1990] Fam 194 Considered in relation to granting permission to appeal to the Supreme Court. The court found this case not analogous and declined permission to appeal to the Supreme Court.

Court's Reasoning and Analysis

The court acknowledged the claimant’s fraudulent exaggeration but held that existing legal precedent prohibits striking out a claim in its entirety on grounds of dishonesty. The court relied heavily on the authority of Shah v Ul-Haq, where Smith LJ concluded that the power to strike out a claim entirely for fraud does not exist and such a policy change must come from Parliament. The court distinguished Arrow Nominees as a different factual scenario where fraud prevented justice altogether. The court also referenced Widlake v BAA Limited, which reaffirmed the approach in Shah v Ul-Haq in the context of costs and dishonest exaggeration. Applying the principle of stare decisis, the court felt bound to follow these precedents and dismissed the appeal. Regarding permission to appeal to the Supreme Court, the court found no clear conflicting authority warranting such permission and left the decision to the Supreme Court’s discretion.

Holding and Implications

The court DISMISSED THE APPEAL and REFUSED PERMISSION TO APPEAL TO THE SUPREME COURT.

The direct effect is that the claimant retains the damages awarded despite proven fraudulent exaggeration. The court reaffirmed that the power to strike out a claim entirely on grounds of dishonesty is not currently recognized by the courts and would require legislative intervention. No new precedent was set, and the decision maintains the status quo in personal injury claims involving dishonesty.

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Summers v Fairclough Homes Ltd.

Contains public sector information licensed under the Open Justice Licence v1.0.

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Comments

Summers v Fairclough Homes Ltd.
(Oct 7, 2010)