Supreme Court confirms courts have power to strike out dishonest claims after judgment

In Fairclough Homes Ltd v summers [2012] UKsC 26  The supreme Court overturned a line of authorities and held that a claim could be struck out after trial or even after an assessment of damages if it subsequently transpired that it was dishonest.

surveillance evidence came to light after trial to show that the Claimant had grossly exaggerated the extent of his injuries.  The defendant employee applied to strike out the proceedings on the grounds that the claim was tainted by fraud and amounted to an abuse of process.  The judge at first instance found that the new evidence demonstrated that the claimant had been lying about his ability to work and the effect of his injuries on his day-to-day tasks.  Indeed, the judge considered the evidence was strong enough to sustain a claim for fraud on the criminal standard of proof.  However, he felt bound by authority and refused to strike out the claim, instead making a considerable reduction in damages.  Recognising the importance of the issue, the judge granted leave to appeal on the strike out application.  The Court of Appeal again felt bound by authority, but also granted leave to appeal.

The supreme Court noted that there had been a considerable increase in the number of fraudulent claims.  The Justices were quick to conclude that courts do have the jurisdiction to strike out a claim tainted by fraud, even where damages were otherwise due.  Reference was made to the express language of part 3.4(2) of the Civil Procedure Rules which gives courts the power to strike out statements of case which are an abuse of the court's process.  However, the supreme Court said that such strike-outs should only occur in very exceptional circumstances.  The courts had other means to deter misleading claims - damages, costs, interest, proceedings for contempt and criminal proceedings.  In the instance case the supreme Court decided that the dishonesty of the claimant had been accounted for in the level of damages awarded (it was clear that the claimant had suffered some injury) and costs and that therefore the circumstances were not exceptional enough to strike out the claim .  

A full copy of the judgment can be found below:-

http://www.supremecourt.gov.uk/docs/UKsC_2010_0212_Judgment.pdf