UK: Supreme Court Clarifies Test For Setting Aside Judgment For Fraud

The Supreme Court has resolved uncertainty as to the test that must be met when seeking to set aside a judgment on the grounds that it was obtained by fraud. Overturning the Court of Appeal's decision, it confirmed that there is no need to demonstrate that the evidence of fraud could not have been obtained with reasonable diligence at the time of the earlier trial: Takhar v Gracefield Developments Ltd [2019] UKSC 13.

The question of whether there is a "reasonable diligence" requirement in cases involving fraud had been the subject of conflicting authority in the lower courts in recent years. It reflects a tension between, on the one hand, the public policy in favour of the finality of litigation and, on the other, the desire to do justice in individual cases and not permit fraudsters to benefit from their misuse of the court system. The Supreme Court's decision comes down in favour of the latter in this context, and to that extent can be seen as an illustration of the principle that "fraud unravels all".

However, the court expressly left open the question of the approach to be adopted in a case where the fraud had been raised in the original trial, or where a deliberate decision had been taken not to investigate a suspected fraud or rely on a known fraud. While no final view was reached, the judgments indicate a tentative view that, in such situations, a court dealing with the application to set aside the judgment should have a discretion whether or not to grant the application.

The judgments do suggest a narrow view as to when any such qualifications might be triggered. The claimant in this case had sought (and been refused) permission from the trial judge to adduce evidence from a handwriting expert, which might be thought to indicate that she had suspected, and indeed raised, the issue of fraud to that extent. Lord Kerr however observed that, while the claimant suspected there may have been fraud, it was clear she did not make a conscious decision not to investigate it; to the contrary, she sought to do so but her application to adduce expert evidence was refused.

As a practical matter, however, litigants who suspect some element of fraud should not assume that they will necessarily be entitled to re-open the litigation at a later date simply by producing evidence of fraud. Certainly, the decision does not give carte blanche effectively to "park" fraud allegations, either for tactical reasons or in the hope that stronger evidence of the fraud might come to light after judgment. In most cases, parties will still be well advised to investigate their suspicions and raise any allegations within the proceedings if they wish to pursue them.


The factual background to the case is set out in our earlier post, here. Briefly, the underlying proceedings concerned allegations of unconscionable conduct in a property transfer. The claimant was unsuccessful but subsequently commenced fresh proceedings seeking to set aside the judgment on the grounds of new forensic handwriting evidence indicating that her signature on a key agreement relied on by the defendants had been forged (her original evidence had been simply that she did not recall signing the agreement).

The defendants sought to strike out the second proceedings as an abuse of process. In particular, they argued that, in the circumstances, the evidence of forgery (if such could be proved) could and should have been obtained at the time of the trial.

There was no dispute that the following principles govern applications to set aside judgments for fraud (as summarised by the Court of Appeal in Royal Bank of Scotland plc v Highland Financial Partners LP [2013] EWCA Civ 328, and endorsed by the Supreme Court in the present case):

  • There has to be a "conscious and deliberate dishonesty" which is relevant to the judgment sought to be impugned.
  • The relevant dishonest evidence or action must be "material", in that the fresh evidence would have entirely changed the way in which the first court came to its decision.
  • The materiality of the new evidence is to be assessed by reference to its impact on the evidence supporting the original decision, not its likely impact if the claim were to be retried on honest evidence.

The key dispute was whether there is also a further requirement to show that the new evidence could not with reasonable diligence have been obtained at the time of trial. This was dealt with as part of a trial of a preliminary issue.

At first instance, Mr Justice Newey concluded that there was no authority binding on him that confirmed the existence of such a "reasonable diligence requirement" and that, as a matter of principle, he should not apply it.

The Court of Appeal disagreed, concluding that it was bound by House of Lords authority to find that there was such a requirement. The Court of Appeal's conclusion was clearly reached with some reluctance, with Patten LJ (giving the lead judgment) commenting that there is "clearly a powerful argument" that the policy against re-litigation ought to be subject to an exception in cases of fraud, regardless of whether the due diligence condition is satisfied.


The Supreme Court allowed the appeal, holding that where it can be shown that a judgment has been obtained by fraud, a requirement of reasonable diligence should not be imposed on the party seeking to set aside the judgment. Judgments were given by Lord Kerr, Lord Sumption, Lord Briggs and Lady Arden. Lord Hodge, Lord Lloyd-Jones and Lord Kitchin agreed with both Lord Kerr and Lord Sumption.

The court considered that the earlier cases relied on were not in fact authority contrary to their decision but, even if they were, they should not be followed. While recognising the importance of the public policy against re-litigation, the court considered the competing public policy factors in cases of fraud to be compelling. Not only is it contrary to justice that a fraudulent individual should profit because their opponent fails to act with reasonable diligence, a person who obtains a judgment through fraud deceives not only their opponent but also the court and the rule of law.

The court noted that that position is consistent with the approach adopted in several other Commonwealth jurisdictions, including Australia and Canada.

Lord Briggs, while agreeing that the above should be the starting point, suggested that it should not represent a bright-line rule. He would have preferred a more flexible and fact-sensitive approach under which the court could weigh the gravity of the alleged fraud against the seriousness of the lack of due diligence. This suggestion was expressly rejected by Lord Sumption on the basis that it would introduce an unacceptable element of discretion into the enforcement of a substantive right. Once the high standard of proof for fraud is satisfied, there are no degrees of fraud which can affect the right to have a judgment set aside.

The court left open whether a lack of diligence by the innocent party would preclude a judgment being set aside for fraud in two possible scenarios:

  • where fraud has been raised at the original trial and the new evidence relied on to set aside the judgment is in support of that original allegation; or
  • where the innocent party made a deliberate decision in advance of the first trial not to investigate a suspected fraud or not to rely on a known fraud.

Lord Kerr's judgment expresses the tentative view that, in such cases, a court considering an application to set aside the judgment should be able to exercise a discretion whether or not to grant the application, taking the applicant's conduct into account.

However, the court considered that neither scenario applied in the present case. Lord Kerr commented that, although the claimant did suspect that there may have been fraud, it was clear that she did not make a conscious decision not to investigate it. To the contrary, she sought permission to engage an expert but her application was refused.

Lady Arden said there were matters which caused her some concern on the facts, including that the claimant had concerns about the authenticity of her signature but failed to challenge the authenticity of the agreement or appeal the judge's order denying permission to adduce handwriting evidence. However, Lady Arden agreed that there is not, and should not be, a general rule that a lack of diligence by the innocent party precludes a judgment being set aside for fraud.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions