Should a claim be struck out in its entirety if it is substantially fraudulent? That was the issue considered by the Supreme Court last week in Fairclough Homes Limited v Summers.
The appeal arose out of a commonplace employers liability case. Mr Summers slipped on a defective step whilst descending from a stacker truck. He fell to the ground, thereby breaking his right hand and suffering a serious fracture to his left ankle.
After a finding of liability in Mr Summer’s favour, a quantum hearing was held, at which Fairclough Homes Limited relied on video surveillance evidence. This evidence disclosed that Mr Summers, in the words of Ward LJ was “an out-and-out liar, who quite fraudulently exaggerated his claim to a vast extent”. One of the ways in which he attempted to mislead the court was in claiming future loss of earnings by stating that his injuries kept him from working as a kitchen fitter. However, the video evidence displayed the falsity of this assertion in all its technicolour glory with scenes of Mr Summers driving a van, which advertised kitchen-fitting services along the side.
The trial judge determined that his genuine losses amounted to £88,000 – much less than the figure claimed. Fairclough Homes Limited appealed on the grounds that the judge should have struck out Mr Summers’ claim in its entirety, despite that he had suffered a genuine injury, because of his lies.
The Court of Appeal rejected the appeal on the basis that point had already been decided in the negative in Shah v Ul-Haq ( EWCA Civ 542). The Court distinguished Arrow Nominees v Blackledge ( 2 BCLC 167), on the ground that in the instant case the trial judge had been able to make findings as to the extent of genuine loss whereas in Arrow Nominees, the extent of the fraud made it impossible to do justice.
Last week the Supreme Court heard arguments about the increase in the number of fraudulent cases and the failure of the costs regime to deter such claims. It remains to be seen in what circumstances, the Supreme Court will identify a jurisdiction to strike out fraudulent claims either under CPR 3.4(2)(c) or otherwise. There is no doubt that defendant insurers are praying that the Justices will rule, as Ward LJ referred to it, “on the side of the angels”.