Neutral Citation Number: [2009] EWCA Civ 542
Case No: B3/2008/2273
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM Birmingham District Registry
Mr Justice Walker
ON APPEAL FROM Birmingham County Court
Recorder Richard Parkes QC
7BM00846

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 09/06/2009
Before :

LADY JUSTICE SMITH
LORD JUSTICE MOSES
and
LORD JUSTICE TOULSON
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Between :

	Anita Shah	Appellant	
	- and -		
	Wasim Ul-Haq
Samara Khatoon
Zahida Parveen
	Respondents	

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Mr Ralph Lewis QC and Mr Alasdair Brough (instructed by Morris Orman Hearle) for the Appellant
The Respondents were neither represented nor present at the hearing of the appeal 

Hearing date: 6 April 2009
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Judgment

Lady Justice Smith: 
Introduction
1.	This is an appeal from the decision of Walker J dated 31 July 2008 on appeal from the decision of Mr Recorder Parkes QC sitting in Birmingham County Court on 4 February 2008.  This is, therefore, a second appeal. Permission was granted because the appeal raises a point of some general importance, namely whether it is possible, under CPR 3.4(2) or at all, to strike out a genuine claim on the ground that the claimant has been involved in a fraud upon the court in respect of an associated claim. 
The claim  
2.	The underlying action arose from an apparently simple road accident in May 2006.  The defendant, Mrs Anita Shah, negligently drove her Peugeot motor car into the rear of a Rover motor car which was stationary in front of her at traffic lights.  The Rover belonged to Mr Wasim Ul-Haq who was driving it at the time.  The car sustained minor damage in the collision. Also in the Rover with Mr Ul-Haq were his wife, Mrs Zahida Parveen, and their two children.  So much was common ground.   When the action was begun, Mrs Shah admitted liability for causing the collision. 
3.	In addition to Mr Ul-Haq’s claim for damage to the car, he and his wife claimed that they had suffered minor whiplash injuries.  A claim was also made by Mrs Samara Khatoon, Mr Ul-Haq’s mother, who alleged that she too had been in the car and had suffered a whiplash injury.  The claims of all three claimants were brought together and Mr Ul-Haq and his wife supported Mrs Khatoon’s claim that she had been in the car at the time.  Mrs Shah denied that Mrs Khatoon had been in the car at all and also disputed that any claimant had suffered personal injury. She asserted that no claim should be allowed to Mr Ul-Haq and Mrs Parveen because they had been complicit in the fraudulent assertion that Mrs Khatoon had been a passenger. 
4.	Thus it was that, instead of the claim being settled for a modest sum without a hearing, there was a trial of the issues before the recorder which lasted several days. Mr Ul-Haq and his wife gave evidence of their own injuries and also said that Mrs Khatoon had been a passenger at the time of the collision. Mr Brough on behalf of Mrs Shah submitted that they were lying about their own injuries and about Mrs Khatoon’s presence in the car. The recorder should reject all the claims save for the damage to the car. Alternatively, he contended that, even if the recorder were to find that Mr Ul-Haq and his wife had suffered genuine injuries, the recorder should strike out their claims under CPR 3.4(2) on account of their part in the attempted fraud.  That rule provides that the court may strike out a statement of case if it appears to the court that the statement of case is an abuse of the process of the court.  Mr Brough submitted that their conduct amounted to a serious abuse of the process of the court and that only by striking out their claims could the court mark its profound disapproval. 
5.	Mr Pitchers, for the claimants, conceded that, if the recorder were to hold that Mr Ul-Haq and his wife had suffered genuine injuries but had conspired to advance Mrs Khatoon’s fraudulent claim, there was a discretionary jurisdiction under CPR 3.4(2) to strike out their genuine claims at the end of the trial but urged the recorder not to exercise it.  
6.	The recorder held that Mrs Khatoon had not been in the car.  Mr Ul-Haq and his wife had conspired with Mrs Khatoon to support her fraudulent claim.  The fraud was serious; it appeared that within a short time of the accident, Mr Ul-Haq, his wife and mother had all attended the Accident and Emergency Department of their local hospital.  The recorder inferred that Mr Ul-Haq had made a rapid decision to encourage his mother to make a false claim. The recorder dismissed Mrs Khatoon’s claim with costs on an indemnity basis assessed at £2,666.  However, he held that Mr Ul-Haq and Mrs Parveen had genuinely suffered minor personal injuries.  
7.	After a careful consideration of authority, which I will examine later, the recorder expressed his doubts about the existence of any discretion under that CPR3.4(2) to strike out a genuine claim at the end of a trial.  He was doubtful that that rule was ever intended for such a purpose but, because the point had been conceded, he accepted that he did have the discretion contended for.  However, he declined to exercise it.  He assessed Mr Ul-Haq’s damages at £2,585.38 and his wife’s at £2,259.37 and directed that each should pay two thirds of Mrs Shah’s costs of defending the claim.  Each had to pay £1,777.  The net effect of these orders after set off was that Mr Ul-Haq, Mrs Parveen and Mrs Khatoon had, between them, to pay Mrs Shah £1,375.75.  Thus, the fraudulent conspiracy had resulted in no benefit; instead a modest deficit.
The first appeal 
8.	Mrs Shah then appealed to a High Court judge on the issue of whether the recorder had been right to refuse to strike out the claims of Mr Ul-Haq and his wife.  Mr Ul-Haq and his wife did not appear and were not represented.  It was contended for Mrs Shah that the recorder had been reluctant to recognise that he had a discretion to strike out the claims under CPR3.4(2) and that this reluctance had coloured his assessment of the factors affecting the exercise of his discretion. Second, it was contended that, having found Mr Ul-Haq and his wife to be dishonest, the recorder should not have found that their claims were genuine.  
9.	Walker J dismissed this second point on the ground that the recorder was quite entitled to conclude that their evidence about their own injuries was truthful.  In my view, he was plainly right about that and, although Mrs Shah was given permission to appeal to this court on that ground, it should not have been given. I gave permission due to an oversight.  It is not an issue suitable for a second stage appeal and in any event, the point is quite without merit. I shall say no more about that.  
10.	On the main issue, whether the recorder had been right to refuse to strike out the small but genuine claims of Mr Ul-Haq and his wife, the judge was told that fraudulent claims were becoming a major problem for the courts and for insurance companies. Striking out was the only way in which the court could mark its disapproval and it was in the public interest that such claims should be seen to be counterproductive. He submitted that the recorder had not given sufficient weight to these factors and had also underestimated the seriousness of the fraud in this case.    
11.	The judge examined all the same authorities as had been considered by the recorder, in particular Khan, Shah and Mayat v Hussein, Ashraf and the MIB a decision of HH Judge Hawkesworth QC sitting in the Huddersfield County Court in May 2007 and the decision of the Court of Appeal in Arrow Nominees v Blackledge [2001] BCLC 167.  I will discuss those cases below.  In addition, he considered two county court cases decided before Khan in which the judges had accepted that they had a discretion under CPR3.4(2) to strike out the otherwise valid claims of parties who had colluded in the bringing of a fraudulent ‘phantom passenger’ claim by a friend or relation.  In one, Ghalib and Ghaffur v Hadfield, HH Judge Phillips, sitting in Preston County Court in 2004, had propounded what he considered to be the appropriate test for the exercise of the discretion. He said that the judge must consider two questions:  (1) to what extent had the claimant failed to help the court to further the overriding objective, taking into account the definition of that objective in CPR 1.1; and (2) whether in the light of the conclusion under (1) the discretion should be exercised to strike out the claim under CPR 3.4(2).  In Ghalib, Judge Phillips weighed the factors which pointed towards and against striking out the claim and, in the event, declined to do so.  In the second such phantom passenger case, Patel and others v Ali, Mr Recorder Wilby directed himself according to Judge Phillips’s test and, after conducting a balancing exercise, concluded that the first claimant’s claim, which was in itself valid, should be struck out.    
12.	From his consideration of authority, Walker J was satisfied that there was a discretion under CPR 3.4(2) to strike out a genuine claim even at the end of the hearing. He accepted that the recorder’s approach to his task had been coloured by his doubts as to the existence of this power and decided to exercise the discretion afresh.  He approved the approach suggested by Judge Phillips in Ghalib and then carried out the balancing exercise suggested by that case.  He concluded that, although the fraud was serious, it was not of the most serious kind and declined to strike out the claims. He dismissed the appeal. 
The appeal to this court	
13.	Mr Ul-Haq and his wife did not appear on the appeal. Mrs Shah was represented by Mr Ralph Lewis QC. At the outset, Mr Lewis sought to impress upon the court the gravity of the situation which faces insurance companies who have to contend with false claims.  I myself was already aware of the general nature of the problem.  It was graphically described in the following way by His Honour Judge Hawkesworth QC in a county court case to which I will refer later:  
“Unhappily such fraudulent claims are now legion.  They occupy the court time of District Judges and Circuit Judges in West Yorkshire literally week in and week out.  My own judicial experience reflects, I have no doubt, that of many of my brethren throughout the country.  Just about every variant of a fraudulent claim comes before the court, including deliberately staged collisions, damage caused to vehicles which have never been in collision at all, claims deriving from the most trivial touching of vehicles, and claims in which a driver will assert that his car was carrying other members of his family including his children, when in fact none were present but all of whom have reported to a hospital or their General Practitioner that they have been injured, and who are then able to produce an apparently independent expert’s report confirming the fact of such injury.  The cost to the insurance industry and to other honest policy holders must be very substantial.  In addition, and of more relevance to these proceedings, the cost in court time in trying such cases is very high, with the added knock-on effect of casting suspicion onto many genuine claims so that claimants are put to proof of their legitimate and genuine claims for compensation when in other circumstances they might not have been called upon to do so.”
Mr Lewis told us that the insurance company involved in the present case had successfully challenged no fewer than 157 phantom passenger cases in the last 12 months; that was in addition to claims involving staged accidents.  He urged this court to hold that the judge should have struck out the genuine claims of Mr Ul-Haq and his wife and thereby to make it plain to the perpetrators of frauds such as this that, if they were found out, not only would the fraudulent claims be dismissed but the other associated claims would be struck out, even if genuine. 
14.	Mr Lewis submitted that CPR3.4(2) provided the jurisdictional basis for the remedy he sought.  He relied on the same authorities as had been considered below.  He submitted that the judge had rightly accepted that there was jurisdiction to strike out these genuine claims but had wrongly refused to do so. He had failed to give proper weight to the gravity of the fraud in this case and to the public interest need for such frauds to be stamped out.  
15.	We were in a similar position to the recorder and the judge in that there was no forensic opposition to the submission in respect of CPR 3.4(2). Like the recorder and the judge, we will have to consider whether that rule does provide a basis on which the court can strike out a genuine claim on the ground that the claimant has abused the process of the court in respect of a collateral claim.
16.	However, before considering whether CPR3.4(2) provides a procedural peg on which to hang a decision to strike out a genuine claim by reason of collateral dishonesty, I first wish to discuss the more fundamental question of whether it is right to do so as a matter of substantive law.  My preliminary reaction to the suggestion that this might be appropriate was one of surprise.  I had thought that the only circumstances in which a genuine claim would be dismissed on account of dishonest exaggeration were where the claim was based on an insurance contract: see Axa General Insurance Ltd v Gottleib and Gottleib [2005] EWCA Civ 112, in particular Mance LJ’s discussion of authority at paragraphs 17 et seq. There is a well established common law rule that if a genuine claim made under an insurance contract is dishonestly exaggerated, the whole claim will be dismissed; further, if money has already been paid pursuant to a claim under such a contract before the fraud is discovered, all the sums paid under that claim will be recoverable by the insurer, including any sum referable to the genuine part of the claim.  However, this rule is limited to claims brought under insurance contracts, which are, of course, contracts of good faith.  If there were a general rule of law, whether in contract or tort, that the dishonest exaggeration of a genuine claim would result in the dismissal of the whole claim, there would be no need for a special rule applying to contracts of insurance.  
17.	I am satisfied that there is no such general rule of law. I am unaware of any reported case in which a judge has dismissed the whole of a claim because he has found that the claim has been dishonestly exaggerated. The invariable rule is that, in those circumstances, the judge awards the limited damages which are appropriate to his findings.  Of course, a claimant’s credibility may be so damaged that he fails to prove any part of his loss, but if he proves some loss, he recovers that even though he has fraudulently attempted to recover far more.  Not only am I unaware of any reported case in which this rule has not been followed, my own long experience of personal injury work at the Bar and on the bench confirms this view.  I have, I regret to say, considerable experience of exaggerated claims.  Of course, not all exaggerated claims entail dishonesty; sometimes exaggeration can be innocent, resulting from a subconscious preoccupation, even obsession, with the injury. Judges are always careful to take account of such effects when assessing damages.  But there are some cases where the exaggeration is plainly dishonest.  In nearly 40 years’ experience, I have never known a judge refuse to award damages for a genuine injury on the ground that the claimant had dishonestly sought to exaggerate the injury and its effects.  
18.	The only suggestion that it might be possible to refuse to award any damages at all where the claim has been exaggerated came in the obiter dicta remarks of Laws LJ in Molloy v Shell UK Ltd [2001] EWCA Civ 1271.  That was an appeal against the costs order made by the judge below following an assessment of damages in a personal injury case. The claimant had been injured and liability was admitted.  He claimed a grossly exaggerated sum for loss of earnings based upon the contention that he was now unable to work as a scaffolder. In fact he was working as such.  The truth came out and the judge awarded general damages for the injury and a modest sum for loss of earnings. I interpose to say that the judge thereby did what judges always do.  The claimant just failed to beat a Part 36 offer made well before trial. The judge ordered the defendant to pay the claimant’s costs up to the date of the part 36 offer and ordered the claimant to pay 75% of the defendant’s costs thereafter. He declined to give the defendant all its costs on the ground that the claimant had failed to better the Part 36 offer by only a narrow margin. The defendant appealed, contending that, in the light of the claimant’s dishonesty, the judge should have awarded it the whole of its post-Part 36 costs. The Court of Appeal (Mummery and Laws LJJ) allowed the appeal.  Laws LJ observed that, from the time when his claim was filed until he was found out, the claimant’s approach had been ‘nothing short of a cynical and dishonest abuse of the court’s process’.  He continued: 
“For my part I entertain considerable qualms as to whether, faced with manipulation of the civil justice system on so grand a scale, the court should, once it knows the facts, entertain the case at all save to make the dishonest claimant pay the defendant’s costs.  However, all that that is sought here is an order for 100% of the appellant’s instead of 75%, the costs in question being only those incurred after the date of the Part 36 payment. The appeal certainly cannot be resisted on that basis.”
Thus, when seen in context, all Laws LJ was saying that, where a genuine claim was dishonestly exaggerated on a grand scale, maybe the court should dismiss the whole claim.  He did not consider whether there was power to do that or whether such a course would be consistent with existing authority or practice.  In my respectful view, this was little more than wishful thinking by Laws LJ.   
19.	In Churchill Car Insurance v Kelly [2006] EWHC 18 (QB) Gibbs J was invited to deprive a claimant of the genuine part of his claim because he had been found out in a blatant attempt to inflate his claim.  No authority was cited to him to support the insurer’s submission, save for Molloy. The judge expressed some sympathy with Laws LJ’s view but held that he could not accede to the submission.  He noted the limited rule relating to insurance contracts.  In my view, he was unquestionably right. 
20.	In my judgment, it is well established that a claimant will not be deprived of damages to which he is entitled because he has fraudulently attempted to obtain more than his entitlement.  Should the position be different where the claimant’s attempted fraud consists of lying to support the claim of another person rather than lying to enhance the claimant’s own claim?  I can see no logical justification for suggesting that the claimant who lies about another person’s claim should be treated more severely than the claimant who lies about his own claim.  Both behave disgracefully; both commit the criminal offences of attempting to pervert the course of justice and attempting to obtain property by deception or attempting to obtain a pecuniary advantage by deception. Yet the policy of the law has not been to shut them out from justice altogether - save where the claim relates to an insurance contract. 
21.	It may be that that policy is wrong and the law should be changed. Indeed, like Laws LJ and Gibbs J, I have some sympathy with the view that fraudulently exaggerated claims should be struck out in their entirety.  However, I do not think that such a change would necessarily solve the problems of insurance companies; their real problem with phantom passengers and staged accidents is detecting the frauds in the first place.  But in any event, I consider that the law is so well-established that I would not think it right to change it by judicial intervention. In my view, such a change would have to be a matter for Parliament.  
22.	In the light of that conclusion, consideration of CPR3.4(2) becomes a side issue.  If the common law permits the court to deprive a claimant of the fruits of a genuine claim because he has lied either in exaggeration of his own claim or in support of another claim, then it would not, in my view, be necessary to find a procedural peg on which to hang the decision.  The judge would just dismiss the claim.    
23.	However, out of respect for the decisions of Walker J and the circuit judges who have concluded that CPR3.4(2) provides a discretionary power to strike out the whole of a claim as a response to dishonest conduct, I will deal with the question.   
24.	CPR Part 3 is headed:  The Court’s Case Management Powers.  It deals with a wide range of powers by which the court can control the process of litigation.  CPR 3.4 is headed: Power to strike out a statement of case.  Rule 3.4(2) provides: 
“The court may strike out a statement of case if it appears to the court -
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim;
(b)  that the statement of case is an abuse of the process of the  court’s process or is otherwise likely to obstruct the just disposal of the proceedings; or
(c) that there has been a failure to comply with a rule, practice direction or court order.”
25.	All three judges who have held that this rule provides a discretionary power to strike out a genuine claim (Walker J, HH Judge Phillips and HH Judge Hawkesworth QC) were strongly influenced by the judgements of this Court in Arrow Nominees.  
26.	In that case the respondents to a petition for relief under s459 of the Companies Act 1985 applied to strike it out before the trial on the basis that the petitioners had forged and disclosed documents so that a fair trial would not be possible.  That application was refused but renewed at trial on the basis that it was now clear that the petitioner had lied about the circumstances of the previously admitted forgeries and there was a danger that other documents had been forged.  The judge again refused to strike out the petition, saying that a fair trial was still possible.  On appeal, the Court of Appeal held that the judge should have struck out the petition at the time of the second application for two reasons. First, once the judge had accepted that documents had been forged and it would no longer be possible to have a fair trial of certain issues, the judge should have struck out the petition because there was no other evidence which was capable of supporting the relief claimed.  However, Chadwick LJ gave a second reason for his conclusion.  At paragraph 54 he said: 
“But for my part, I would allow that appeal on a second and additional ground.  I adopt, as a general principle, the observations of Millett J in Logicrose Ltd v Southend United Football Club Ltd (1988) Times 5 March, that the object of the rules as to discovery is to secure the fair trial of the action in accordance with the due process of the court; and that, accordingly, a party is not to be deprived of his right to a proper  trial as a penalty for disobedience of those rules, even if such disobedience amounts to contempt for or defiance of the court, if that object is ultimately secured, by (for example) the late production of a document which has been withheld.  But where a litigant’s conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the process of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice, the court is entitled, indeed, I would hold bound, to refuse to allow that litigant to take further part in the proceedings and (where appropriate) to determine the proceedings against him. The reason, as it seems to me is that it is no part of the court’s function to proceed to trial if to do so would give rise to substantial risk of injustice. The function of the court is to do justice between the parties; not to allow its process to be used as a means of achieving injustice. A litigant who has demonstrated that he is determined to pursue proceedings with the object of preventing a fair trial has forfeited his right to take part in that trial. His object is inimical to the process which he purports to invoke.
55. Further, in this context, a fair trial is a trial which is conducted without an undue expenditure of time and money; and with a proper regard to the demands of other litigants upon the finite resources of the court. The court does not do justice to the other parties to the proceedings in question if it allows its process to be abused so that the real point in issue becomes subordinated to an investigation into the effect which the admittedly fraudulent conduct of one party in connection with process of litigation has had on the fairness of the trial itself.  That, as it seems to me is what happened in the present case. The trial was ‘hijacked’ by the need to investigate which documents were false and what documents had been destroyed.”
Chadwick LJ then considered the facts of that case and held that the judge, on considering those facts, ought to have held that it was not fair to the respondents or in the interests of justice generally to allow the trial to continue.  He concluded: 
“A decision to stop the trial in those circumstances is not based on the court’s desire (or any perceived need) to punish the party concerned: rather it is a proper and necessary response where a party has shown that his object is not to the fair trial which it is court’s function to conduct, but to have a trial the fairness of which he has attempted (and continues to attempt) to compromise.”
 
27.	Ward LJ agreed with Chadwick LJ but added an additional reason for reaching the same conclusion.  He observed that the court’s powers of case management are to be exercised so as to further the overriding objective.  The overriding objective of the CPR is to enable the court to deal with cases justly. Dealing with a case justly included, so far as practicable, ensuring that the parties were on an equal footing.  Ward LJ was of the view that the attempt to pervert the course of justice which had occurred in this case was the very antithesis of the parties coming to the court on an equal footing.  The judge below had erred in failing to take this additional factor into account.  The petition should have been struck at the second application part way through the hearing. 
28.	In so far as Walker J, Judge Hawkesworth and Judge Phillips regarded Arrow Nominees as support for the proposition that CPR 3.4(2) provides a power to strike out a claim at the end of a hearing where there is no suggestion that it has not been possible to hold a fair hearing, in my respectful view, they are mistaken.  Everything that was said in Arrow Nominees related to the situation which arose in the course of the trial, once it had become apparent that the petitioner’s dishonesty was such that a fair trial had become impossible. The case does not support the proposition that, where, as here, the trial has taken place and the recorder has been able to reach reliable findings, it is open to him to strike a genuine claim out.  In those circumstances, the judge must give effect to his findings.  He can mark his disapproval of the way in which the court’s time and the parties’ money has been wasted by an order for costs.  But he cannot, in my judgment, mark his disapproval by depriving the claimant of that which the claimant has proved to be his entitlement.  
29.	I would add that the expression ‘strike out’ has a time-honoured use and is not apt to describe the decision that a judge makes at the end of the trial. At that stage, the judge either upholds the claim or dismisses it.  He does not strike it out.  The rule, as it appears to me, is primarily designed to permit a judge to strike out a claim before or at the beginning of the trial.  The rule focuses on the statement of case - viz the particulars of claim or defence - in other words a pleading.   The main objective seems to be to allow the court to deal summarily with a bad claim or defence before the expense of a trial is incurred.  I can see that, in the kind of circumstances as arose in Arrow Nominees, the power to strike out may be deployed during a hearing where it becomes apparent either that it will not be possible to have a fair trial or because, without some corrupted evidence, which has to be disregarded, the claim cannot succeed.  There again, the objective is to cut matters short so that further costs will not be wasted.  I prefer to offer no view as to whether it would be appropriate for the judge to strike out the claim (as opposed to dismissing it) if, at the end of the evidence he concluded that he had been unable to conduct a fair trial, on account of one of the parties’ conduct. The point is academic anyway because strike out at that stage would have the same effect as dismissal. But in the present case, there was no suggestion of an unfair trial. There was a great deal of wasted time and money, caused by the claimants’ dishonesty but the recorder saw through that dishonesty and reached what are accepted to have been entirely proper findings.  
30.	For the reasons I have given, I would dismiss this appeal. However, my conclusion that the respondents should not be deprived of their modest damages is based on quite different reasoning from that by which the judge below reached the same conclusion.   
Lord Justice Moses
31.	I agree.
Lord Justice Toulson

32.	I also agree.
33.	A person with a valid claim may try to deceive the other party or the court in different ways. Dishonest exaggeration of the amount of the damage suffered; the concoction of lies, or production of false documents, in support of the claim; the destruction or falsification of evidence which might tend to weaken the claim; these are all examples.  So too a defendant who has a valid defence to all or part of a claim may use dishonest means in order to defeat or reduce the amount of the claim, but we are concerned with dishonesty by claimants. 
34.	In this case Mr Ul-Haq and his wife (the first and third claimants) were guilty of dishonesty, but of a more remote kind. It had nothing to do with their own claims, which arose from being respectively the driver of, and a passenger in, a car involved in a minor accident caused by the defendant’s negligence. It had to do with a false claim by Mr Ul-Haq’s mother (the second claimant), supported by the first and third claimants, that she too had been a passenger in Mr Ul-Haq’s car and had suffered injury. For convenience the three claims were brought in a single action, but the alleged causes of action were several and not joint. In the cases of the first and third claimants, only damages were in dispute at the trial. In the case of the second defendant, the principal issue was whether she had been a passenger in the car. Mr Recorder Parkes QC found that she had not.
35.	The question at issue is whether at the end of the trial the judge ought to have “struck out” the claims of the first and third claimants as an abuse of the court because they had conspired to support the second claimant’s false claim in the same proceedings.
36.	As a matter of substantive law, I did not understand it to be suggested that the dishonest behaviour of the first and third claimants affected their separate causes of action. As Smith LJ has explained, such a suggestion would be novel and contrary to well established practice. It would also present conceptual and practical problems.
37.	There is a special rule of insurance law that an insured cannot recover in respect of any part of a claim in a case where the claim has been fraudulently exaggerated or where a genuine claim has been supported by dishonest devices: Manifest Shipping Co Ltd v Ini-Polaris Co Ltd (The Star Sea) [2001] UKHL 1 [2003] AC 469; Agapitos vAgnew [2002] EWCA Civ 247, [2003] QB 556; Axa General Insurance Ltd v Gottlieb [2005] EWCA Civ 112. Different views have been advanced to explain the jurisprudential basis of the rule, but it is unnecessary to consider them because it is clear that the principle (whatever its foundation) is special to fraudulent insurance claims: see Axa para 31, per Mance LJ. Moreover, the operation of the principle is restricted to the period prior to the issue of proceedings: Agapitos v Agnew paras 47 to 53.
38.	The first and third claimants’ causes of action accrued at the time of the accident. There is no legal basis for treating their dishonest support for the second claimant’s bogus claim as extinguishing their own right to damages. To change the law because of the problem of fraudulent claims referred to by Smith LJ in para 13 would be a radical step. Any suggested change would have to be thought through with care and in detail, not only as to its general desirability but as to its form and limits, and would be a matter for Parliament.
39.	With those points in mind I turn to the argument advanced by Mr Ralph Lewis QC under CPR 3.4(2). As Smith LJ has observed, part 3 of the CPR is headed “The Court’s Case Management Powers”. The purpose of the court’s management powers is to assist it to arrive at a determination of the parties’ legal rights and obligations in a way which is just and expeditious: see CPR 1.1 (the overriding objective) and CPR 1.4 (the court’s duty to further the overriding objective by its case management).
40.	With that end in view, CPR 3.4 gives to the court the power to strike out a statement of case or part of a statement of case, thereby avoiding the time and costs of a full trial of the case or part of it, in cases where, in summary, the statement of case is hopeless on its face (ground (a)), or it is an abuse of process or otherwise likely to obstruct the just disposal of the proceedings (ground (b)) or there has been some breach of a rule or order meriting the draconian step of a strike out (ground (c)).
41.	In the present case, the action proceeded to trial and the judge was able on the evidence to determine the parties’ respective rights. At that stage his proper course was to give judgment on the various claims, as he did.
42.	Mr Lewis submitted that he should not have proceeded to give judgment on the claims, but could and should have struck out the entire action as an abuse of the process of the court under CPR 3.4(2)(b). 
43.	I do not accept that argument. 
44.	The term “abuse of the court’s process” in ground (b) is not defined, and the categories of abuse are not closed. Whilst in a sense the making of a fictitious claim is of course an abuse of the court’s process, I am doubtful whether CPR 3.4(2)(b) is intended to cover the situation where the issue is whether the claim is true or false, because CPR 24.2 makes provision for a court to give summary judgment against a claimant on the whole of a claim or a particular issue if it considers that the claimant has no real prospect of succeeding on the claim or issue. If the court were satisfied that a claim was fictitious, without a full hearing, the natural course would be to give judgment against the claimant on the claim. 
45.	However, that is not my reason for rejecting Mr Lewis’ argument, because I recognise that there is a potential overlap between the power of the court under CPR 3.4(2)(a) to strike out a statement of case on the grounds that it discloses no reasonable cause of action and its power under CPR 24.2 to give summary against the claimant on the claim; and I accept that the better view may be that there is a similar potential overlap between CPR 3.4(2)(b) and CPR 24.2. 
46.	Nonetheless, where a statement of case contains a mixture of false and genuine claims (whether by the same claimant or by two or more claimants), I cannot see that the inclusion of a false claim would or could of itself turn a genuine claim (or genuine part of a claim) into being an abuse of the court’s process, so as to warrant the court striking it out under CPR 3.4(2)(b). To hold otherwise would be to deprive a claimant of his substantive rights in respect of an accrued cause of action as a mark of the court’s disapproval of his conduct in advancing, or supporting, a false claim made by himself or another in the same proceedings, which in my judgment the court has no power to do. 
47.	I have said that I cannot see that the inclusion of a false claim would “of itself” turn a genuine claim into being an abuse of the process of the court. I use the words “of itself” because there could be a case, to quote from Chadwick LJ’s judgment in Arrow Nominees Inc v Blackledge [2000] EWCA Civ 200, [2000] 2 BCLC 167, para 54,
“where a litigant’s conduct puts the fairness of the trial in jeopardy, where it is such that any judgment in favour of the litigant would have to be regarded as unsafe, or where it amounts to such an abuse of the court as to render further proceedings unsatisfactory and to prevent the court from doing justice…”
48.	In such a case the proceedings would fall to be struck out, as Chadwick LJ said, for the reason
“…that it is no part of the court’s function to proceed to trial if to do so would give rise to a substantial risk of injustice.”  
49.	However, that is not this case. This was never a case in which it was suggested, or could plausibly have been suggested, that there could not be a fair trial of the first and third claimants’ claims (where the only contested issues concerned damages); or, for that matter, that there could not be a fair trial of the claim by the second claimant, which the judge heard and dismissed. 
50.	That brings me back to a point which I have already made. Where, as in this case, there has been a full trial, the proper course for the judge is to give judgment on the issues which have been tried. To have struck out the claims of the first and third claimants would have been to invoke a case management power not for a legitimate case management purpose (in other words, for the purpose of achieving a just and expeditious determination of the parties’ rights, or avoiding an unjust determination where a party’s conduct had made a safe determination impossible), but for the very different purpose of depriving those parties of their legal right to damages by way of  punishment for their complicity in the second claimant’s fraudulent claim, which in my judgment he had no power to do. It was open to him to impose costs sanctions on the first and third claimants, which he did, but that is a different matter.    
51.	As a postscript, I would add that everyone knows that fraud is a scourge of our time. On the judge’s findings the claimants were guilty of serious criminal offences, including conspiracy to defraud and conspiracy to pervert the course of justice. If, as has been suggested, such fraudulent claims have reached epidemic proportions, it may be that prosecutions are needed as a deterrent to others.