Destruction, falsification and alteration of evidence: Dishonest conduct in litigation and its consequences

18/11/2009

The falsification, alteration or destruction of evidence are matters not taken lightly by the court. While the court may not always strike off an action where a party has acted dishonestly, this will not prevent them from punishing the dishonest party in a manner that they may think fit. This could include punishment by way of contempt or perjury proceedings.

In order for a matter to be struck off due to dishonest behaviour, the court must believe that such conduct has lead to an unacceptable risk that there will be an unsafe judgement and that it is inappropriate for the courts resources to be expended at trial.

This was held in the case of Arrow Nominees v Blackledge [2000] BCLC 167 in which the first petitioner, as a nominee shareholder for Nigel Tobias, a director of the company, falsified and/or tampered with material evidence prior to disclosure than attempted to pass the evidence off as genuine.

The judge in this matter held that where a party was guilty of conduct that put the fairness of a trial in jeopardy or made the proceedings unsatisfactory, preventing the court from doing justice they must not allow that party to take any further part in the proceedings. If it was found to be appropriate, then court may also determine proceedings against dishonest party. The general principle involved being that if a litigant attempted to prevent a fair trial, then they forfeited their right to take part in the trial.

This does not however mean that a court will strike out a claim purely because they disapproval of a party's actions. Rather, there must be an unacceptable risk that there will be an unsafe judgement and it must be inappropriate for resources to be spent on trial.

Before striking out any matter, the court must also consider a parties right to a fair trial under Article 6 of the European Convention on Human Rights. The Judge in Arrow Nominees concluded that where it is appropriate for a court to strike out an application because a fair trial is not possible, then Article 6 will not be taken into consideration.

If the court does not think it appropriate to strike out the application as a result of dishonest conduct, this will not prevent a dishonest party from being punished for contempt or perjury.

Whilst contempt proceedings could be used to pursue a dishonest party, this would only be successful where there was serious misconduct that was likely interfere with the course of justice. Additionally, permission from the Court or the Attorney General are required in order to pursue contempt proceedings.

The principle in Arrow Nominees was upheld in Zahoor v Masood [2009] EWCA 650. This was a case where both parties had acted dishonestly, but neither applied to strike out the claim. The judge in this matter considered striking out the claim but the Court of Appeal found that a Defendant's misconduct was irrelevant. That is, the court's only consideration under the Arrow Nominees decision was the conduct of the dishonest party and whether, as a result of that conduct, they forfeited their right to the hearing of the claim.

It was also held in Shah v Ul Haq [2009] EWCA Civ 542 that exaggeration of a claim will not automatically give rise to striking out where a fair trial is still possible.

This does not stop the court from using its wide discretion in relation to costs awards. The case of Bank of Tokyo-Mitsubish UFJ Ltd v. Bascan Gida Sanayi Ve Pazarlama A.S.[2009] is an example of where a costs order was imposed against a successful defendant where the court had reason to believe that he acted dishonestly and/or inflated his claim.

While the courts in recent decisions have appeared hesitant to strike out matters where a safe judgement can be delivered, they have, where appropriate, conducted the trials in a way that has maximised the advantage of the party that has not acted dishonestly. This has also applied in instances where a party has forged or destroyed documents.

A court will take a party's dishonest behaviour into account in all circumstances, which might include not giving the dishonest party the benefit of doubt or not exercising its discretion in the dishonest party's favour at trial.

In cases where a party has destroyed, falsified or altered evidence, the court will use its discretionary power to ensure that the dishonest party is not unfairly advantaged. Whilst the court may strike out a matter in order to prevent unsafe judgements, strike out it is not a tool used to punish dishonest conduct. The Courts will however punish dishonest parties by any means within the scope of their powers.

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