There is a considerable body of case law amassing on the topic of “fundamental dishonesty” as an exception to the qualified one-way costs shifting regime (QOCS). The decision of Mrs Justice Yip DBE in Alpha Insurance v. Roche  EWHC 1342 (QB) deals with the question of when the Court should allow, pursuant to CPR 44PD 12.4(c), for a determination of whether or not a claimant has been fundamentally dishonest after they have discontinued their claim.
The Defendant’s application had previously been heard by His Honour Judge Gregory, who took the view that it would be a disproportionate use of Court time and that there was nothing of an “exceptional” quality that should cause him to allow the allegation to proceed (although it was common ground there was no requirement under CPR 44PD 12.4(c) for a case to be exceptional and HHJ Gregory had been misdirected by Counsel in this regard). The Defendant appealed to the Court of Appeal.
Mrs Justice Yip observed that whilst, inevitably, determining fundamental dishonesty in discontinued claims required the allocation of further Court resources, in considering proportionality there was a “public interest in identifying false claims and in claimants who pursue such claims being required to meet the costs of the litigation”.
In examining the instant case before her, Mrs Justice Yip noted that the claim had been discontinued the day before trial, with no explanation provided. Whilst acknowledging that there were a number of reasons why a claimant might discontinue a claim, she noted that in those circumstances “some explanation can reasonably be expected”.