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Clause 56 retains its bite

Clause 56 of the government’s Criminal Justice and Courts Bill moved a step closer to becoming law last month. The “fundamental dishonesty” clause was debated in the House of Lords late into the night and survived unscathed, despite attempts to water down the effect of the clause. Clause 57 of the Bill, which provides for the introduction of rules banning the offer of inducements to make a personal injury claim, was also debated in the House, with the government securing an important amendment to that clause.

A number of proposed amendments to the clause were debated, with only one being accepted. An attempt by Lord Hunt of Wirral to amend the clause, so as to potentially widen the scope of the clause failed on the basis that it would “unnecessarily complicate the clause, and could have unintended consequences that would not be desirable”.

An amendment to change the burden of proof that will be required to prove fundamental dishonesty from one of balance of probabilities, to one of beyond reasonable doubt and a proposed amendment that would have seen courts being given the option to reduce damages, rather than dismiss the whole claim, were not taken forward. Had they been adopted, they would have severely limited the Bill’s impact.

The accepted amendment concerned a subtle change to subsection 5 of the clause and the claimant’s obligation to repay defence costs in the event of a finding of fundamental dishonesty. The subsection as had been drafted provided that a court “may require the claimant to pay costs incurred by the defendant only to the extent that they exceed the amount of the damages” (meaning the genuine damages). However, the clause now states that the court will simply be obliged to deduct the genuine damages from the defendant’s assessed costs and presumes that costs will be awarded against the claimant.

Clause 57 of the Bill, that seeks to ban the offering of an inducement to make a claim was amended so that it will also be illegal for an inducement to be offered through a third party. The amendment addressed a potential way of subverting the rules that could have seen law firms continuing to offer inducements but through third parties.

We will continue to monitor the Bill’s progress and keep you updated, but it is possible to monitor the Bill’s progress here. Read more articles about the fundamental dishonesty clause

By Marcus Davies

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.