Haider v DSM Demolition Ltd  EWHC 2712 (QB) Birmingham Civil Justice Centre 16/10/2019
Claimant’s incomplete financial disclosure in credit hire claim leads to finding of fundamental dishonesty
The claimant was involved in a road traffic collision with the defendant’s employee, which the defendant contended was induced. The claim consisted of personal injury, vehicle damage and credit hire. At trial, the judge found that the accident was genuine but that the defendant’s employee was not negligent. He also found that the claimant’s failure, in connection with the hire claim, to disclose a number of bank and credit card accounts, was not fundamentally dishonest. Both parties appealed. One succeeded.
The High Court dismissed the claimant’s appeal in respect of the liability finding on the basis that, whilst the trial judge’s reasoning might more fully have been expressed, his findings of fact were not so obviously wrong that they might properly be overturned.
At its heart, the defendant’s argument on appeal was that the judge should have found the claimant to have been fundamentally dishonest, and removed his qualified one-way costs (QOCs) protection, because (a) he did not disclose either on his list of documents or on his response to Part 18 questions that he held two credit cards; (b) he did not disclose that he held a second bank account.
The High Court reminded itself that the context of the argument was that, where credit hire charges are claimed, the question of whether the claimant will recover the rate charged by a credit hire company will be determined by reference to whether that claimant could afford or have reasonably found the means to pay an up-front lower rate from a mainstream hire company. Only if a claimant could not so afford the lower rate would they recover the credit hire rate.
The trial judge’s assessment of the claimant’s inadequate disclosure was that there had 'not been particularly good disclosure; but that none of it had given him the impression that the claimant had been dishonest’. The judge found that the claimant was 'basically an honest man'.
In respect of this finding and the question of fundamental dishonesty, the High Court held the following: -
57. In my judgment this conclusion was not reasonably open to the judge. It was plainly dishonest for the Claimant not to have disclosed his credit cards or his second bank account and the accompanying documentation. The questions he was asked were not difficult (and he did not say that he had not properly understood them); they were in writing; he had time to consider his documentation; and he had the opportunity to take legal advice if he was unsure about how to answer and what to disclose. Even if he was telling the truth about his Barclaycard account having been closed, that did not relieve him of the obligation to disclose it and the associated paperwork. He gave no explanation at all for not disclosing his Vanquis Bank card, and his claim that somehow the bank had given him another account in error, into which he had just happened to pay his interim payment, was not credible. The Claimant's actual state of knowledge was that he knew full well that he had two bank account and two credit cards, and that he had concealed this information. Nor, for the reasons I have given, could the Claimant's failure be explained on the grounds that he was being asked to recall events from four years previously.
58. I have set out the judge's reasoning but, with respect to him, he did not properly address the evidence. This was not simply a case where there had just been 'not particularly good' disclosure by the Claimant. He deliberately failed to disclose highly material evidence. There was simply no basis on which the judge could properly have concluded that the Claimant had simply got confused on these issues. The only possible reasonable inference from the evidence was that the Claimant intentionally failed to make full disclosure, and that failure can only be labelled as dishonest.
59. Was this dishonesty 'fundamental', in the sense explained in Howlett, supra? In my judgment it was. The dishonesty in question did not relate to some collateral matter, but went to the root of a substantial part of the claim. The claim for credit hire charges (and associated losses) exceeded £30 000. The importance of the Claimant giving proper disclosure about his financial circumstances needs to be emphasised. Part of the purpose of a statement of truth is to bring home to party signing the solemn nature of what s/he is doing, and importance of telling the truth. To knowingly give a false statement of truth is a contempt of court: CPR r 17.6(1). Moreover, as the Defendant correctly observed in its Skeleton Argument, the County Court cannot carry out an assessment of the issue of impecuniosity when a litigant fails to give full financial disclosure. By doing as he did, the Claimant prevented the Defendant from carrying out a proper investigation into his claimed impecuniosity. This skewed and distorted the presentation of his claim in a way that can only be termed fundamentally dishonest.
60. It follows that the judge was wrong not to have concluded (per CPR r 44.16(1)) that the claim was not fundamentally dishonest so as to allow the order for costs made against the Claimant to be enforced to its full extent.
Earlier in 2019 we commented on the county court decision of Goldy Singh v Transportes Paulo Duartes Espana in which commentary we recommended that insurers should, in credit hire cases, be on the look-out for evidence of undisclosed bank accounts.
The decision in Haider amplifies the benefit of that approach as it is likely now that a claimant’s subterfuge in respect of financial disclosure will be found to be fundamentally dishonest. In this case, it meant that the claimant’s QOCs protection was disapplied but it is not hard to imagine, in appropriate cases, that claimants will also see their entire claims dismissed under s57 Criminal Justice and Courts Act 2015.
Weightmans are the credit hire fraud specialists. If you would like to discuss your counter fraud strategy, please contact; Jeff Turton, Head of Motor Fraud, on 0151 242 6968 or email firstname.lastname@example.org.